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Olive Oil: The industry, opportunities and challenges

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The imported olive oils category has not only seen handsome growth in the metros but has also traversed the boundaries of tier II cities with an equally impressive growth. This points to the fact that today the Indian consumer has become health-conscious and is not shying away from splurging on relevant products.

Olive Oil: The industry, opportunities and challenges
Despite the category having a minuscule share of less than 0.1 per cent in the overall edible oil market in India, there are about 90 olive brands currently competing against each other

Despite the category having a minuscule share of less than 0.1 per cent in the overall edible oil market in India, there are about 90 olive brands currently competing against each other.

Players like , , , and form the premium category of olive oils in India. With new entrants surfacing in the market, the category has become highly competitive and even more price sensitive.

Today, the overall olive oil imports in India stand at 11,106.75 MTS, a degrowth of 12 per cent over last year. But the import scenario seems to be getting better as the trend seen this year has been uplifting. The imports between January to June 2016 stood at 3062 tonnes, which marked a growth of about 19 per cent over last year.

So, the olive oil category seems to on an upward curve with a growth rate of around 15-20 per cent. However, there remains lots of challenges that are hampering further growth of a premium category product. The olive oil crop last year was very suboptimal. Hence, cost of the product at source went up by about 50 per cent in the year 2014-15.

Other factors are also in the play. The Rupee has constantly been depreciating against the Euro. In fact, it has depreciated over 15 – 20 per cent in the past two years. In addition to that, the frequent import duty hikes have also caused the category to take a hit.

With four import duty hikes in just two years, on both the extra virgin and refined variants of olive oil, the import duties are 12.5 per cent and 20 per cent respectively for the two variants. The compounded impact on the category as a result of the above factors has been that the price paid by the consumer for olive oil has practically doubled.

The rise in consumer price of the product is an issue of concern for all stakeholders in the olive oil industry – from consumers to retailers. Also, misleading communications by other brands tend to haze the customer’s point of view when buying products from the category.

Productwise, olive oil is a far superior product as far as its nutritional content is considered. But there have been times when the nutritional benefits of olive oils have been compared to other cooking oils. Many such advertisements have come out in through TV advertisements, digital marketing mediums, etc.

That is when the Indian Olive Association, with the help of ASCI, has repudiated such false comparisons and communications. Such false communications only mislead the consumers about olive oil and benefits.

Health-rich oil

Olive oil is the cornerstone of a Mediterranean diet. It is not only a taste enhancer but is also packed with magnifi cent health benefits. Studies have shown that a Mediterranean style diet rich in olive oil reduced the risk of type II diabetes by almost 50 per cent compared to a low fat diet.

These facts are indicators of the several benefits of olive oil. The inculcation of a few elements from the Mediterranean diet can help prevent many diseases and increase life expectancy. When olive oil started to penetrate the Indian households, the prime usage was not for edible but for external uses.

Indian kitchens were introduced to the Pomace variety of olive oil, which even made this variety command a 55 per cent share in the olive oil category (in terms of imports & consumption). But today, with consumers becoming more aware of the category, its different variants and options are specifically available to suit the Indian palate.

So the trend has shifted to the refined range of olive oil (extra light & pure olive oil) whereas the consumption of pomace has come down to 40 per cent currently. The extra light variant became the game changer in the category with its best suitability for Indian households.

The extra light olive oil, which has the maximum goodness of olive oil, has helped the category evolve and there is paradigm shift that can be noticed in the category with the consumers switching from pomace to extra light olive oil. With the pomace category de-growing and the extra light category witnessing growth, the other olive oil brands have also shifted their focus towards the extra light variant.

All the facts indicate that the consumer has become more informed about the category and even more vigilant towards what they eat. There will soon be a time when the extra virgin variant of olive oil will have prominence in Indian Kitchens, resulting in its higher category share.

Why olive oil is more suitable for Indian kitchens

Indians have always been fond of elaborate meals and never shy away from trying out a new cuisine, which makes the way for a category like olive oil to penetrate Indian kitchens more easily. But in terms of health, a lot of precautions need to be taken as annually millions of Indians lose their lives due to poor heart health conditions.

Heart health accounts for a shocking 40 per cent of all deaths in India. India is also the diabetic capital of the world. Other prevailing health conditions like obesity and hypertension have been reported as major causes responsible for the increase in heart-related cases in India.

With about 50.8 million Indians suffering from diabetes, it is time that a change in food habits and balanced lifestyle measures should be promoted. As globalised Indians, we are aucourant today with the latest technologies and international culinary trends.

There exists a great interest and willingness on the part of Indians to bring home a diverse range of product from across the globe. Today, with Indian consumers being well travelled, there is a far more awareness about international cuisine and healthier lifestyle as compared to yesteryears.

With growing health concerns and an eagerness to switch to a healthier lifestyle, people across the world are incorporating the use of olive oil in their everyday life. The most appealing factor from an Indian standpoint is the fact that price-wise olive oil seems a bit expensive but with only 1/3rd the amount of oil being used in a single go, olive oil price is just a notch higher than the other cooking oils.

At the same time, it is also a hard reality that many Indian households still use unhealthy seed oils due to the high-heat cooking employed for the traditional Indian cuisine. But olive oil, by its sheer nutrient composition, is known to counter bad cholesterol and helps produce good cholesterol, thus helping in building a healthy heart.

Olive Oil is rich in highest amount of MUFA (Best Fat) amongst all edible oils i.e. 75-80 g per 100 g. It is because of the presence of 75-80 per cent best fat, that olive oil is known to be excellent for heart as higher the MUFA Content, the more it helps reduce the Bad cholesterol and also, enhance the good cholesterol. Th e goodness of olive oil does not end here as the oil is rich in Vitamin E & K & loaded with Anti-Oxidants & poly phenols.

While MUFA is known to reduce LDL & increase HDL, polyphenols reduce the risk of metabolic syndrome and heart disease. Olive oil is the ‘Gold Standard’ and it by no means can be compared with other cooking oils. The category is focused to deliver health into the life of every Indian consumer and, with the same intent, aspires to reach maximum Indian households.