Flavoured and infused oils account for a mere few per cent of the market, but even this small number of sales can be extremely profitable for retailers.
Terra Rossa's new infused oils range is a good example, because each 250ml bottle retails at about £5.50. They put a lot more cash through the till than 250ml bottles of water or Coca-Cola and, although retailers won't be selling the same volume as soft drinks, such is the popularity of good-quality food that sales are predicted to continue to grow.
Remmelt Jongkind, marketing director at Napolina, says: "In recent years consumers have been returning to the kitchen. Flavoured and infused oils, used as a salad dressing or as a marinade, are popular because they allow people to feel like they are creating something, but they are still quick and easy to use."
Simon Bell, retail director at Merchant Gourmet, echoes this opinion, saying consumers are using quality ingredients to assemble rather than cook a meal. "In the past it was only the real foodies who were interested in speciality oils, but everyone is a lot more into food nowadays - it's more like a hobby or leisure activity."
Bell adds that the company is helping to encourage more people to try its oils and be more adventurous than just reaching for the extra virgin olive oil. "Through the use of our web site, advertising and PR, we're encouraging people to use more exotic ingredients in a simple way, so they're not really cooking, but assembling premium ingredients to make a quality meal."
He claims that Merchant Gourmet was one of the earliest players in the speciality oil sector, with the launch of a basil-infused olive oil back in 1995. Today, his company's infused olive oil range comprises basil, lemon, garlic and truffle.
This year the company has introduced a new brand identity, which positions Merchant Gourmet as a range that delivers premium ingredients for everyday use. The new design will appear on all Merchant Gourmet foods, including its oils.
Gaea also has a number of flavoured oils in its portfolio, including products containing rosemary and oregano plants. Set up in 1995, it is already one of the largest suppliers of Greek olive oil to the UK.
Meanwhile, the new Terra Rossa range comprises lemon, chilli and basil oils. All three are made from the company's premium Evoo range of first cold-pressed extra virgin olive oils, using hand-picked and half-green olives, crushed with traditional granite stone and extracted using natural cold processes to preserve the aromatic properties, antioxidants and nutrients. The lemon oil is infused with freshly picked lemons that are stone-crushed along with the olives for an all-natural blend. The chilli oil is infused by using chilli flake and whole chilli peppers that are put into the oil and left until the oil goes red. Finally, the basil oil is infused with Jordanian basil.
Yet the taste of standard olive oil can be too much for some people, which is why Filippo Berio has launched a mild extra virgin olive oil that has been developed especially for the UK palate.
Says brand manager Diana Anderson: "Although the British public is keen to take advantage of extra virgin olive oil's health and culinary benefits, many prefer a flavour that is milder and gentler than the traditional robust, extra virgin olive flavour. n
Speciality Rice bran oil shows potential
When considering the oil market, innovation is not a word that immediately springs to mind. Yet there's still quite a bit going on in the speciality side of the category.
The oil to watch is rice bran, which is extracted from a layer between the husk and the kernel of rice, and which has all the right health credentials.
New technology means rice bran oil can be extracted from the rice bran layer and refined using an extra-cold filtration process. High levels of vitamin E (tocopherols and trienols) are retained in the extraction process, along with gamma oryzanol, a plant sterol found only in rice. Plant sterols help protect against oxidation of cholesterol and are thought to be a major dietary factor in the prevention of heart disease. Rice bran oil also has a nutritionally well-balanced essential fatty acid profile, an ideal balance of mono and polyunsaturated fatty acids with a moderate level of saturated fatty acids to provide stability.
It's little wonder, therefore, that Ross MacKenzie, food technologist at Old Fashioned Foods, which distributes Alfa One's rice bran oil, describes it as "the most balanced and versatile oil on the market".
He explains: "Rice bran oil is a superior salad, cooking and frying oil that leaves no lingering after taste. The high smoke point prevents fatty acid breakdown at high temperatures. Its light viscosity allows less oil to be absorbed in cooking, reducing overall calories. It mixes better in salad dressings and improves the taste of baked goods, providing cholesterol reduction, nutritional and antioxidant value."
It might sound too good to be true, but Tesco obviously believes in it because the oil is exclusively available through the supermarket chain, where it sells for £2.49 for a 500ml bottle. It has been on offer at £1.49, which has led to a 700% uplift in sales, according to the company. Alfa One and Old Fashioned Foods are not the only companies to have cottoned on to the potential of rice bran oil.
Bespoke Foods has just added Thai Taste rice bran oil to its range and reports that the product is used widely throughout Thailand for stir-frying because of its high smoke point and the fact that it does not transfer flavour into other foods.
Walnut oil is another that has found favour with consumers, most likely because it is an excellent source of Omega-3. Walnut oil experienced the biggest percentage growth of any sector, up 86.4% [TNS 52 w/e 23 April 2006], although it remains the smallest category, worth only £655m.
Another speciality oil purported to offer health benefits is The Food Doctor's Essential Seed Omega oil.
Made from pumpkin, sunflower, sesame, hulled hemp and linseed, along with evening primrose oil, it is said to provide a balance of the essential fats and vitamin E required by the body for hormonal, cardiovascular and skin health.
It comes in 250ml bottles and retails at £8.95. It is designed to be drizzled over salad, stirred into yoghurts or smoothies or simply eaten by the spoonful.
However, consumer demand for more interesting oils does not mean that all categories are experiencing growth, according to TNS.
Its data shows that while rapeseed oil and grapeseed oil are in growth, up 8.4% and 4.2% in value respectively, groundnut and peanut oil fell 9.9% and corn oil dropped 7%. As consumers trade up in oil, so packaging is becoming more and more important.
Remmelt Jongkind, marketing director at Napolina, says: "Plastic bottles are used extensively in foodservice and are now starting to appear more in the retail sector, mainly in own label.
"And where traditional seed oil brands would always be hidden in a cupboard, people now take pride in displaying their olive oil in the kitchen.
"Glass and embossed bottles denote quality and can help reinforce key brand values. Napolina olive oil bottles, for example, are embossed with the Napolina 'N', which is modelled on Mount Vesuvius and helps reinforce the brand's Italian heritage to consumers."
Simon Bell, retail director at Merchant Gourmet, adds that it is important that the packaging reflects what's inside the bottle.
"Bottles need to communicate their contents more," he says. "Consumers are paying a decent amount of money for high quality oil so they need to know a bit about it. They need to understand whether an oil is fruity or spicy or peppery - they're still a bit confused.
"I think simplifying the labelling, like they've done with New World wines, is the answer. It would lead to further category growth and development."Research Notes
The oils market is valued at £185m, and has grown by 2.6% in the latest year, despite standard cooking oils declining by 13% in value terms.
Speciality oils continue to grow, although from a much smaller base, accounting for only 8.4% of the market.
Olive oil has more than a 50% share of the market this year, in value terms, and is continuing to grow considerably at 12.4%, ensuring the value growth of the overall oils market.
Filippo Berio has maintained its place this year as the number one range within the market. Frylight and Napolina continue to grow, sitting in third and fourth place respectively.
Tesco remains the driving force behind the market. The UK's largest retailer is overtrading in oils compared to total grocery, as are Sainsbury and Asda.
Sainsbury is growing sales by 7.6% this year, while Asda's sales remain reasonably flat at 1.3%.
With olive oil value at £98m, optimism surrounding the market remains.
Sales are continuing to grow considerably at 12.4%, with Tesco and Sainsbury leading the field, their year-on-year growth standing at 23.4% and 20.2% respectively. Asda is also making a strong contribution to the market, with 16.5% growth.
Sainsbury and Waitrose grew their sales substantially in the olive oil and speciality oil sectors because of their more niche product offerings and higher prices.
The average price per litre of olive oil in Waitrose stands at £5.55, which is a 12.4% increase on last year and £1.22 more expensive than the total market average price.
In terms of speciality oils, Sainsbury maintains an own label bias, with more than 85% of choice coming from its own label range. Its olive oil selection, on the other hand, comprises more than 60% own label.
Jenny Hall, TNS Worldpanel
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