Refining moments: sales of olive oil, along with other specialty oils, continue to heat up.
Olive oil manufacturers have secured their space on store shelves with help from the top-end, extra virgin olive oil. According to officials from Pompeian, extra virgin olive oil now makes up 75% of the olive oil category, as opposed to just 41% in 1997.
"People are finally realizing that by using extra virgin olive oil they can add taste and make more delicious foods by adding this unique flavor," says Bill Monroe, marketing director for Baltimore-based Pompeian. "That is what the big trend is and we see this trend continuing into the future."
Manufacturers, consumers and retailers have solidified their preference for extra virgin; however, in a time when consumers want to know everything about their food, industry observers say that olive oil is one of the most mislabeled products in the world and laws surrounding olive oil labeling are loose at best. In 2010 the U.S. created the Olive Oil Foods Act in an attempt to regulate the extra virgin claim, but the law is voluntary--meaning there is no authority actually checking into olive oil labeling.
Third-party certification is not required in the U.S. for a manufacturer to claim extra virgin on its packaging--but many observers feel that it should be. "Third-party certification should be required," says David Neuman, CEO of Hollywood, Fla.-based Gaea. "Third-party testing is the ethical way to assure consumers that they are getting what they pay for."
With the confusion as to what really constitutes extra virgin olive oil, and consumers wondering if what they are buying actually is what the label says it is, shoppers and category managers are seeking out brands they can trust. "Retail managers want to know, are they making the right decision, are they putting the right products on the shelf?" says Neuman. "If they are caught with products that are lying, they are culpable."
Gaea, a manufacturer of Greek olive oil, is currently making a strong push into the U.S. market in an attempt to alter consumers' current notions about olive oil. Company officials say it is a top product in many European markets including the UK, Greece and Germany; and they are ready to bring the product to U.S. consumers.
Gaea is beginning with retailer education on the brand to get the product on shelves. "We are working to enhance the Greek olive oil message: hand picked, high quality, stable prices," says Neuman.
Companies like Gaea that are enforcing high standards have led leading retailers to begin to curate their olive oil sets to earn the trust of shoppers. As a result, more shelf space is being allocated to higher end products that are associated with a positive image. "More and more we are seeing that people will spend for a higher quality product if indeed it is higher quality," says Mark Coleman, vice president of retail division for Catania-Spagna Oils based in Ayer, Mass.
Maria Reyes, director, vendor management, for the oils category of Naperville, Ill.-based KeHE Distributors says more premium options are being presented to her when it comes to olive oil. This can only help retailers, as observers note, olive oil is one of, if not the, highest dollar ring storewide.
Not only is this a smart decision because of the product's high dollar value, but retailers also realize that olive oil fits in perfectly with current food trends, observers add. "Of all of the leading vegetable oils, olive oil is the only one that comes direct from the fruit," says Alexandra Kicenik Devarenne, CEO of the Petaluma, Calif.-based Extra Virgin Alliance (EVA), an international organization dedicated to promoting quality olive oils. "It is not refined in any way, virgin olive oil is just as natural a product as can be, which is why fundamentally it hasn't changed in thousands of years."
Despite premium and natural trending upward, the controversy surrounding olive oils as of late, combined with the consumer passion for variety, has lead to an increased acceptance of alternative cooking oils, a fact that continues to impact category sales, observers add. "I think people are just getting more educated around oils, and the importance of knowing what to look for in an oil," says Elysia Vandenhurk, COO of Saskatoon, SK, Can.-based Three Farmers, manufacturers of camelina oil.
Camelina oil is one such oil experiencing a rise in popularity. It is cold pressed with a high smoke point of 475 [degrees]F, making it ideal for cooking. Even when heated, the product maintains a strong nutritional profile, with omega 3s and vitamin E intact.
COO COO FOR COCONUT
Camelina oil may be on the rise, but last year's most popular craze--coconut oil--is still a very hot commodity. According to Chicago-based market research firm IRI, sales of Carrington Farms and BetterBody Foods cooking and salad oils, both purveyors of various types of coconut oil, were up an impressive 487% and 218% in dollar share respectively in the 52 weeks ended January 25.
"People are just starting to explore coconut oil, it is something new," says Debbie Shandel, executive vice president/CMO for Closter, N.J.-based Carrington Farms. "People are getting away from frying, but it is good for higher heat cooking like sauteing, it has a nice taste and is easy to use."
Practicality aside, coconut oil also provides consumers with important health benefits. "You are getting MCTs (medium-chain triglycerides) from coconut oil, which produce the two essential fatty acids that the body can't produce on its own. Coconut oil does that for you," says Bryan Morin, food marketing specialist for Bloomingdale, Ill.-based NOW Foods. "I think that is why more people are leaning towards it for a cooking oil and other types of applications."
KeHE's Reyes agrees. "Coconut oil has changed the category because of all of these healthy attributes that studies have shown. The triglycerides, antioxidants, the benefits linked to helping the symptoms of Alzheimer's; it is not a one dimensional product."
Adding further versatility to the product, various brands are beginning introduce infused coconut oils for cooking. Carrington Farms makes liquid coconut oils in garlic, rosemary and just-launched sriracha, designed for infusing flavor into cooking. NOW Foods' Ellyndale brand also released a line of coconut infusions at Expo West.
"The great thing about coconut oil is that people are putting one in their bathroom and one in their kitchen pantry," Shandel adds. "You can use it for a million different things."
Avocado oil is another buzz worthy product in the marketplace as of late. In the past couple of years avocados have garnered somewhat of a cult following; thus it is no surprise that an oil associated with the healthy fruit piques consumer interest. "We are seeing the American consumer really start to watch what foods they eat and are looking for oils that are in the 'better-for-you' category," says Catania-Spagna's Coleman. "Avocado oil would be a good example of that."
Since NOW Foods launched its Ellyndale Foods branch in November 2014, company officials say that avocado oil has been its most popular offering. Boasting a very high smoke point of 520 [degrees]F, avocado oil is versatile and able to maintain its nutritional value when frying, sauteing or baking.
Pompeian is one of the few olive oil companies to grow beyond the olive branch--by introducing other oil varieties including both avocado and coconut, which have both done exceptionally well for the company, officials add.
"Avocado is very healthy. I think the oil itself is going to become more and more popular," says KeHE's Reyes. "I think that is going to be the next trend."
ALTHOUGH MOST CONSUMERS associate high-quality olive oil with Italy or Spain, another trusted producer is starting to make waves in the industry. "The big trend in the last year was California," says David Neuman, CEO of Hollywood, Fla.-based Gaea. "California is becoming a serious producer of extra virgin olive oil that the consumer could theoretically rely on. Many consumers believe that products that are from the U.S. are less likely to be tampered with."
Consumer trust in California is shown through stats from Chicago-based IRI, which state that dollar sales for Chino, Calif.-based manufacturer California Olive Ranch were up 45% for the 52 weeks ended January 25, the largest gain in the olive oil category.
Consumer desire to eat local may also have something to do with it. "California is as local as it gets," says Kirsten Wanket, marketing and customer service manager for California Olive Ranch. However, that does not mean shoppers should put blind faith into products solely because they are manufactured stateside. "Consumers need to read labels and understand where the product comes from, and look for certifications by a respected organization," Wanket adds.
Aside from the local factor, consumers have good reason to place their trust in California; the state does have stricter standards than other parts of the country. "The new California standard also has third-party certification, covering olive oil producers making 5,000 gallons a year or more," says Alexandra Kicenik Devarenne, CEO of the Petaluma, Calif.-based Extra Virgin Alliance. "The whole idea behind that standard is to help build trust among consumers that they really are getting what they think they are getting."
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|Title Annotation:||CENTER STORE: Cooking Oils|
|Date:||Apr 1, 2015|
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