- market grows on the back of olive oil - standard cooking oil declines - infusions spark enthusiasm - fixtures need simplification analysis by Sheila Eggleston Olive oil is showing dynamic growth in the oils market thanks to a re-evaluation of retail pricing, which has led to more affordable olive oils, a rise in new products and brands, and a rush of promotional activity. The market is dominated by own label brands, which account for almost 60% of the volume, and by the two brand leaders Filippo Berio and Carapelli. Tesco continues to lead the retailers with 24.7% share of oils, while others who have made strong gains include Asda and Morrisons. Asda's Il Frantoio brand, according to supplier Euro Food Brands which also distributes Carapelli, is responsible for its volume growth. The proliferation of brands however has not helped consumers to understand the fixture, nor has it made them brand loyal and this has been the catalyst in suppliers' marketing strategies. Filippo Berio says a massive price reduction will see people switch brands, and that a lot of volume increases have come from sales of larger pack sizes as consumers buy into the deals such as 750ml with 33% extra free and 500ml with 50% extra free. By dropping the price of mild and light varieties by almost half that of extra virgin olive oil, volumes rose as consumers chose the cheaper version. Filippo Berio's research shows that only 30% of UK households buy olive oil therefore the growth potential is phenomenal. But to succeed, fixtures and ranges need to be simplified to incorporate lines that add value. Country manager Walter Zanre says: "Some of the fixtures have become too confused and the UK market isn't ready for that. Over the next few months there will be some casualties because retailers cannot carry all the brands and there's no point in having lots of 500ml bottles. Retailers with more focused ranges are getting a better return." Smaller sizes are also under threat according to Euro Food Brands' Mike Adams. "500ml is the most popular size for olive oil while 250ml is more for trialling. But as the market gets more mature and established here, there won't be a relevance for the smaller size." Anglia Oils commercial director Alan Preston says: "Pricing has altered dramatically. The price difference between olive oil and extra virgin olive oil has narrowed to just 35p a litre." The company says it has gone from strength to strength since it decided to sell direct to the retail market. In two years it has increased its business to £10m and predicts a 30% increase in turnover for 2001. It handles the Spanish Borgas brand and recently took on Pietro Coricelli from Italy. A year ago it acquired Chalice Foods from Whitworths. Preston says it isn't huge but gives the company a speciality positioning. Investment for stage one of a three year business plan is just over £1m. Bertolli is new to the UK but it's one of Italy's oldest brands and has been owned by Unilever since 1995. "Bertolli is to be our power brand in the Mediterranean food area, but it's going to be much more than an olive oil," says culinary category manager Mike Miller. "We want to build the brand in Europe because, looking at the food trends, eating Mediterranean food with its health benefits is on the increase." Unilever Bestfoods is spending £8m on the brand this year, £3m of which will be on oils. The rest will support a new range of Italian pasta sauces made with Bertolli oil. Heavyweight activity includes TV ads from October. UK brand leader Filippo Berio is prepared to meet the challenge head on with a £1.8m spend on TV and press ads and on pack promotions which coincide with Bertolli's TV ads. New lines such as Originari regional oils and a gutsy extra virgin olive oil called Gusto Fruttato have also added a spark to the agenda. An unknown quantity is Napolina, now in the hands of Princes Foods. Princes acquired Napolina from newly merged Unilever Bestfoods in May and marketing manager Sally Molyneaux says: "Plans are in place for investment in the olive and extra virgin olive oils in the range. Consumers regard Napolina as an authentic and trusted brand and, as such, these key attributes will be at the centre of a relaunch later this year." One objective all the suppliers share is to provide more clarity on oil types and usages. Major education programmes are being undertaken involving instore activity, neck collars on bottles explaining the different oils and recipe leaflets. Trustin Unimerchants handles the Greek Gaia brand, an extra virgin olive oil which carries the PDO certification and also comes in natural rosemary and oregano variants. It says there is a niche in the market for premium certified oils and that's where it wants to be ­ making the fixture interesting for the consumer and making sure the consumer gets an authentic product of origin. Nico Fine Foods, formerly known as Theseus UK, imports Xenia branded oil from Greece and is about to launch La Pedriza from Spain. MD Kiriakos Miniotis says: "Extra virgin olive oil is still in the growth stage as only 38%-40% of the British market uses it. But it has come a long way since the 80s and the perception of the buyer has changed since then with olive oil seen as a necessary ingredient in dishes for a healthy lifestyle." However none of the Mediterranean producers can afford to rest on their laurels. Wet weather affected some Mediterranean harvests last year but, despite this, these oils satisfied demand. According to Carbonell, the Spanish crop yielded more than one million tonnes for packers and the 2001 harvest looks promising. However, with Australian, New Zealand and Californian variants gathering up shelf space, the fear is that like wine, more New World oils will appear on the scene. The standard cooking oil category may be declining but it still accounts for 52.2% of the oils market. Euro Food Brands says most of the multiples encourage consumers to trade up to olive oils, but there is still a demand for cooking oils as for as little as 39p a litre, they represent real value for money. UB's Crisp n Dry leads the brand stakes. It now has a foothold in olive oil with Bertolli, vegetable with Crisp n Dry and Flora, blended with Olivio and now corn oil with the acquisition of Bestfoods Mazola. Innovation and added value is the key to any growth in this sector. Anglia Oils says its success is due to identifying individual needs. Again and Again is a cholesterol free long life oil aimed at health conscious consumers, while its latest invention is Chip Shop vegetable oil with beef flavouring. This started life as a prototype for a fast food chain and has turned into a winner for the company. Traditionally northern chip shops used beef tallow but recent food scares such as FMD has affected this market. This product fills the gap and has now been rolled out to Safeway, Asda and Morrisons at £1.69 for two litres. Belgium based Associated Oil Packers is a joint venture between Cargill and Vandemoortele, supplying 55 million litres of oils to all of the multiples. The company has invested in state of the art facilities to develop new products and blends and to performance test existing oils. UK sales manager Dan Oakley says that edible oils isn't the most glamorous market sector and so it has to try harder to stimulate sales. "The basic understanding of consumers is low. People use the same oil to fry everything in and you shouldn't. You should be using different oils. "We've already focused on spray cans and now we are focusing on the application of oils where we have seen a shift in the market. Instead of calling it vegetable oil, we will develop oils more for different uses," he says. {{FOCUS SPECIALS }}