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French Version

Olive oil can grease wheels of economy (Daily Star)

Olive oil can grease wheels of economy
Demand for natural product is increasing on international markets
Lebanese farmers will be ‘the first to benefit from the project’

Lebanon’s olive oil exports are poised to increase dramatically by adhering to special guidelines that aim to fully exploit the industry’s existing potential.“Demand for olive oil is growing in international markets, especially in recent years,” said James Billings, director of the Stanford Research Institute International (SRII) Lebanon, at a national workshop entitled High Potential Export Markets for Lebanese Olive Oil.

“The effective change in income and employment in the Lebanese olive oil industry will gauge the measure of our success.” According to Billings, Lebanon’s agriculture, tourism, and information and communication technology sectors have the highest potential for economic growth.

SRII is developing the olive oil export plan as part of a US Agency for International Development (USAID) funding of the Expanding Economic Opportunities in Lebanon project.

“The US alone imports around $900 million in food products from Mediterranean countries,” said Raouf Youssef, USAID director in Lebanon. “The US market for olive oil is expanding at an average of 20 percent per annum and it is the leading pourable oil in the US, with about $400 million in yearly sales. Lebanese olive oils have already received positive feedback at the recent New York Fancy Food Show,” he added.

According to him, Lebanese olive oils are of superior quality and have already drawn serious inquiries from potential buyers. Some were even asking when it would be possible to receive the first shipment.“We are concentrating our efforts on the demand side and the establishment of an appropriate supply chain,” said Billings. “The rural Lebanese olive farmers will be first to benefit from the project.”

SRII’s study shows that the two biggest olive oil markets are the US and the EU. Olive producers are adhering to specific quality standards as set by the International Olive Oil Council to cater to an increasingly global customer base.

Increased competition has led to a fall in prices in almost all import categories, although the refined oil prices witnessed the biggest decline. Production is on the rise and EU producers are forming alliances with non-EU countries to cater to growing demands and specific customer preferences.

The EU remains the world’s leading olive oil producer with around 75 percent of global production, and also leads consumption. The US accounts for 35 percent of world imports. SRII has outlined the required approaches for identifying product marketing, pricing, and target markets.

For the EU, olive oil should be promoted as an “ethnic” specialty with focus on high- quality bottling and an emphasis on organic olive oil and its related products. Quality olive oils originating outside the EU are considered “specialty” products and are the latest trend among higher income consumers.

Northern, central and eastern European markets should be targeted with a special emphasis on Lebanese and Middle Eastern communities. Care should be taken to implement the EU Protected Geographic Indication packaging to attract more high-end product consumers.

In the US, the focus should be on virgin and extra virgin oil and the niche markets related to olive oil soaps and skin preparations. Sales should be directed to specialty stores and gourmet restaurants. Attractive packaging with nutritional labeling in line with Food and Drug Administration guidelines is crucial.

SRII recommends that a flexible pricing strategy be adopted in accordance with international price fluctuations of the olive oil industry. Caution must be used to fully assess market penetration and competition to implement an effective promotional campaign. Olive oil products can be priced at the high end of the oil market, as an increasing number of consumers are willing to pay more for special regional products.

Exporters should also keep tabs on EU and US consumer preference trends and adapt their marketing campaigns accordingly. Participation in food and regional trade shows is essential and samples
must be readily available to potential buyers.

Test shipment feedback should be obtained from buyers as well as the introduction of in-store product testing and demonstration. Becoming a member of the North American Olive Oil Association would give access to recommendations on regulatory issues, testing and buyers.“Many factors, some of which are outside our control, are involved in realizing a successful export plan,” concluded Billings. “We have to be realistic in our approach.”the project’

Beirut 15-07-2003
Ara Alain Arzoumanian
The Daily Star

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