Olive oil players rustle up ways to gain volumes

On their ingredient list is the need to prove olive oil is suited to Indian cooking

India leads the world in cardiac problems. An estimated 10 per cent of the population had been affected in 2012. It is no wonder then that cooking oils, across the board, harp on how good they are for the heart. Olive oil, universally perceived to be beneficial in this regard, is picking up in sales, spurred on by heavy marketing.

However, in a market where olive oil has not been traditionally used, it has been saddled with a premium imagery. "In India, olive oil has traditionally been used for massage or high-end Mediterranean dishes," says VN Dalmia, president, Indian Olive Association. But the category, which ranges from pomace oil to extra virgin olive oil, is attempting to make its way into regular Indian households.

The latest spate of ads across 28 channels, last December, run by the Interprofesional of the Oil of Olive of Spain, in collaboration with the Ministry of Agriculture, Feeding and Environment and the European Commission, asked the audience to 'join the olive oil revolution'.

Players such as Leonardo, Borges and Figaro - which constitute 60 per cent of the market - followed by Farrell, Del Monte, Oleeve and RS, are also spending heavily. Leonardo has been advertising since 2010, whereas Borges has hired a brand endorser - actor Chitrangada Singh - to highlight its positioning of guilt-free indulgence. Borges spends Rs 8.5 crore each year on advertising and plans to increase it by five times over the next three years. "Our target group (SEC A+) is aware that olive oil is good for health but is apprehensive whether Indian food cooked in it will taste the same," says Rajneesh Bhasin, MD, Borges India.

Hence, the real action is below the line. Players are aggressively hosting seminars, conferences, road shows, launching TV shows about olive oil, distributing brochures, and arranging tastings at ladies' clubs to speed up adoption.

Wet sampling is on in modern retail, in which food items - potato chips, deep-fried samosas or pakoras - are being prepared in olive oil and served to highlight how tasty it can be. These also demonstrate how it does not leave a greasy trail, signifying it as more healthy.

Marketing and PR can save olive oil: Sanjeev Kapoor

  Is olive oil healthy and suited for Indian cooking?
No matter what cooking oil you use, you will find nine calories per gram. Oil comprises three fatty acids: bad saturated, monounsaturated and polyunsaturated. Every cooking oil has a mix of these three in varying degrees, but those that have less of saturated fat are better for the heart.

In India, people perceive olive oil as healthy, but getting them to consume it is a different story. The perception also is, one cannot deep fry in olive oil. But if you want to eat healthy, why do you want to deep fry at all?

What is the biggest barrier to olive oil adoption in India?
Undoubtedly, cost. We import olive oil. We have seen intermittent efforts to locally produce olive oil (like an effort
in Rajasthan, recently), but weather conditions are not conducive. So, the marketing challenge is to answer: If olive oil is still expensive, why switch? But for a switch, the oil needs to have a direct benefit or address a direct threat, which is hard to prove. Marketing and PR can save the category to an extent.

Can olive oil eat into the share of other ‘healthy’ edible oils?
We saw Saffola feel ‘threatened’. Olive oil can eat into the pie. Olive oil is growing at over 30 per cent, but the base is small. One must also consider: Olive oil is degrowing internationally. So, India’s large edible oil market is attractive.

Sanjeev Kapoor
Celebrity chef and promoter, Food Food channel

On an average, each brand deploys such sampling in 80-100 stores across top cities. There are joint promotions with restaurants, cancer prevention bodies and hospitals. Chef-meets in malls are also being organised, where miniature food shows help spread word-of-mouth.

What has helped in wider adoption is the increase in pack sizes to induce sampling and regular consumption, from tiny bottles to five-litre packs. Promotional offers ('buy one, get one free') are rampant even in mass-end supermarkets like Big Bazaar. Gourmet food chains such as Future Group's Foodhall, there are olive oil bars, serving dishes on the go.

The olive oil category opened up in 2003. From 700-800 tonne in 2003, consumption has increased to 12,000 tonne in 2013. The pace would pick up in 2014 and accelerate in 2016.

The threat posed by olive oil to existing edible oil brands was evident when one of the leading players, Marico's Saffola, refered to it. In a TVC late last year, a variant of Saffola ran the tagline 'Saffola Total protects better than olive oil'. The Indian Olive Association has taken the matter up with the Advertising Standards Coucil of India, alleging that such a claim lacks scientific evidence. In the past, Fortune rice bran oil also pitched itself as better than olive oil.

These show that the competition is wary of a category that is suddenly fighting tooth and nail for shelf space.

With the olive oil market decelerating globally, India, with its high oil consumption, makes sense for players. Upselling a healthier oil is the next growth trigger. But the sustainability is under a cloud as the category is wholly imported with no local production.