Lebanese Olive

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A Guidebook to Marketing Lebanese Olive Oil June
2003
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Marketing Lebanese Olive Oil
Understanding the Market Trends
Developing a Marketing Strategy - Understanding
Competition - Understanding the Four Ps of
Marketing
What to Sell? - Identifying a Product Niche
Where to Sell? - Targeting the Global Market
How to Sell? - Reaching Out to the Target
Market - Pricing and Product Positioning
Strategies
Table of Contents
How to Expand? - Delivering Value Through
Customer Satisfaction
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Understanding the Market Trends Production/
Consumption Trends

• The European Union (EU) is the worlds leading
  olive-producing region, accounting for about 75
  of global production.
• The EU is also the worlds top olive oil
  consumer, accounting for about 70 of global
  consumption.
• There has been steady rise in consumption in
  the EU, especially in the Northern countries,
  over the last decade.
• The US market for olive oil is expanding at an
  average 20 percent per annum.
• Olive oil is the leading pourable oil in the
  US market, with sales increasing to 400 million.

Production/ Consumption Trends
Source USDA/ERS 2003
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Understanding the Global Market Import/ Export
Trends

• The European Union (EU) is the worlds leading
  olive oil exporter.
• Imports represent a small proportion of total
  EU consumption. Much of the imported olive oil is
  intended for re-export in blended products.
• The US is the worlds top olive oil importer,
  accounting for more than 35 percent of world
  imports.
• The growing health concerns in the US, Canada,
  Japan, Australia and other parts of the world
  have presented a market opportunity for olive
  producers.

Import/ Export Trends
Source International Olive Oil Council (IOOC)
December, 2002, estimated
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Developing Strategies for the Lebanese Olive
Producers - Understanding Competition

• The major olive producing countries such as
  Italy, Spain and
• Greece are increasing production acreage.
• The EU producers are forming alliances with
  non-EU country
• producers to cater to growing demands, and
  specific customer
• preferences
• The Italian producers continue to dominate the US
  Import
• market, with shipments totaling over 157,000 MT
  in 2000.
• Although most of this trade was in refined oil
  segment, the
• Italian export saw growth in all import
  categories.
• Increased competition has led to fall in price in
  almost all import
• categories, although the refined oil prices
  witnessed the biggest decline.
• Olive producers are adhering to specific quality
  standards such as those set by the
• International Olive Oil Council to cater to an
  increasingly global customer base.

Understanding Competition
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Developing Strategies for the Lebanese Olive
Producers - Understanding the Four Ps of
Marketing
Product Product Features, Positioning,
Differentiation, Packaging,
Quality Place Geographic Location of
Market, Distribution Channels,
Logistics Price Market Penetration
Pricing, Price Flexibility Promotion
Market Segmentation, Sales Promotion,
Advertisement
Product
Target
Place
Promotion
Price
The Four Ps of Marketing
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Identifying a Product Niche Strategies for the
Lebanese Olive Producers
Product
Differentiation

• Focus on bottled, high-quality, specialty
  olive oil, rather than sales of bulk product for
  blending and re-export. The blending and
  re-export segment remains a lower value market
  with wide annual fluctuations and prices
  depending on EU production levels.
• Promote olive oil as an Ethnic specialty
  food. Promoting Lebanese oils as ethnic foods
  and new tastes is likely to draw high-end
  consumers increasingly away from purchases of
  oils from the EUs traditional countries of
  origin of Italy, Spain and Greece.
• Market more organic olive oil. The EU market
  for organic products is growing faster than in
  the U.S. given the emphasis on environmental and
  non-GM concerns in Europe boosting prospects
  for organic oils. Focus on Germany, the EUs
  largest organic market, as well as the UK and
  Scandinavia. Stress organic oils uses both as
  ready cooking oil and as food ingredients, in
  baked goods, etc.
• Promote related olive products. Consider
  products with olive ingredients such as olive
  oil soaps, particularly handmade products.
  Emphasize health and beauty benefits, and the
  lack of animal ingredients, preservatives or
  artificial coloring

What to Sell?
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Identifying a Product Niche Strategies for the
Lebanese Olive Producers
Product
Differentiation

• Focus on the virgin and extra virgin oil
  export segments. The US market is already
  dominated by Italian olive oil suppliers. The
  high-value segment of the expanding US and
  Canadian market provides the best opportunity for
  Lebanese exporters.
• Explore the niche market related to olive oil
  soaps and skin preparations (shampoos, bath oils,
  moisturizers, etc), which are becoming more and
  more popular in the United States because of
  their purported beneficial qualities. Olive oil
  is rich in Vitamin E and A that can help protect
  the skin and prevent dry skin.
• Emphasize sales to specialty stores and
  gourmet restaurants that typically set higher
  prices for their products, as do the natural
  product stores that focus on organically-certified
  products.

What to Sell?
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Identifying a Product Niche Strategies for the
Lebanese Olive Producers
Product
Product
Packaging

• Develop packaging and nutritional labeling
  that is attractive, provides a story on the
  origin of the oil in Lebanon, and is within the
  US FDA requirements
• Exporters to Europe need to be aware that the
  EU system of Protected Geographic Indications is
  being used increasingly as a marketing tool and
  that products with these designations are
  becoming more attractive to consumers of high-end
  products.

Product Positioning

• Stress Specialty and Regional characteristics
  Specialty olive oils, from new countries of
  origin with little or no competition from EU
  production, have good sales potential. Quality
  olive oils originating outside the EU are
  increasingly considered to be specialty
  products or luxury items among higher income
  consumers.
• Position products to address changing customer
  preference.

What to Sell?
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Identifying the Market Place Strategies for
the Lebanese Olive Producers
Place

• Target northern and central/eastern European
  markets, more than southern European oil
  producing countries, as retail sales in southern
  producer countries are dominated by local
  production.
• Aim at markets with the best opportunities
  including Germany, UK, France, the Netherlands,
  Scandinavia, and the higher-income central and
  eastern European and other EU Candidate States
  due to become EU members in 20004.
• Target Lebanese and Middle Eastern
  Communities The diaspora of Lebanese
  overseas, particularly in France, the U.K. and
  northern Europe is a strong, if limited, market
  in size. Focus on regional oil origins within
  Lebanon. Supplement marketing to Lebanese
  communities with promotions to other Middle
  Eastern and H Halal communities in the EU.

• Aggressively pursue the expanding US and
  Canadian market. The US and Canadian markets
  present enormous export opportunities to olive
  producers due to their limited local supplies.
• Target Lebanese and Middle Eastern
  Communities in the US in addition to mainstream
  retailers.

Where to Sell?
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Pricing a Product Strategies for the Lebanese
Olive Producers
Price

• Stay informed of the international price
  fluctuations in the olive oil industry.
• Adopt a flexible pricing strategy while
  negotiating with the international brokers.
• Do not be afraid to price products at the
  high-end, as a substantial consumer segment is
  willing to pay relatively high prices for
  specialty or regional products including olive
  oils.
• Aggressive market penetration pricing,
  referring to pricing at the time of product
  introduction, in conjunction with a forceful
  promotional campaign may help Lebanese producers
  capture a share of the established markets.
  However, caution must be used to fully assess the
  market potential and competition on a
  product-by-product basis.

Pricing
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Reaching Out to the Target Market Strategies
for the Lebanese Olive Producers
Promotion

• Keep up-to-date on key trends in EU and US
  consumer preferences and adapt marketing
  campaigns to address those trends. Product
  promotions should be ongoing and should
  emphasize
• Health and nutritional benefits of olive oils and
  olive products.
• The specialty food characteristics of non-EU
  olive oils, offering geographic origins with
  novelty appeal.
• Promoting organic oils, as sales are likely to
  increase in the EU even more than in the US,
  given high EU concerns over GM foods.
• Cost savings to consumers wherever applicable.
  Recent declines in retail prices in many markets
  have led to increased consumer demand in all
  product segments.
• Introduce Lebanese olive oils at food shows and
  regional trade shows such as the Fancy Food show
  in New York in June, 2003
• Provide samples of olive oil provided to
  potential buyers. Already, one important New
  York gourmet supermarket, Fairway, sampled
  Lebanese olive oils and judged all of them to be
  excellent.

Promotions
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Reaching Out to the Target Market Strategies
for the Lebanese Olive Producers
Promotion

• Obtain feedback from buyers and arrange for test
  shipments. Test Shipments may range from a few
  cases to a container depending on the
  capabilities of the Lebanese exporter. In the
  case of Fairway, they have agreed to purchase
  10-12 cases of 1 liter bottles.
• In-store product tasting and demonstrations help
  reach the end customer directly. Work with the
  brokers/ willing supermarkets to promote your
  product in store.
• Become a member of the North American Olive Oil
  Association in order to gain access to
  recommendations on regulatory issues, testing,
  and buyers.

Promotions
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Expanding Opportunities Strategies for the
Lebanese Olive Producers
Market Access Through Alliances

• Build strategic alliances with EU olive oil
  producer companies that are becoming increasingly
  interested in expanding their production outside
  the EU. The trend to internationalize has
  accelerated as a result of intensifying domestic
  competition, and is leading to more corporate
  alliances whether through mergers, acquisitions,
  or production or export agreements.
• Companies that are beginning to externalize their
  production, i.e. to set up manufacturing plants
  abroad include in particular Spanish olive oil
  producers.
• Target countries include several in Latin America
  such as Argentina, as well as in Mediterranean
  North African countries such as Tunisia and
  Morocco.
• Lebanese companies in other sectors, including
  banking, finance, and insurance and ICT are
  increasingly forming strategic alliances or
  partnerships. Many are expanding their economies
  of scale through local mergers, to obtain greater
  benefits.
• Consider similar opportunities for alliances,
  particularly with EU producers in Italy and
  Spain.

How to Expand in an Existing Market?