Producers eye overseas opportunities

WITH many of Western Australia’s olive oil producers expecting yields between three and eight times those of previous harvests, brand building and distribution strategies have assumed even greater importance than usual.

In 2008, when WA’s current olive groves reach maturity, the State will be capable of producing at least five million litres of extra virgin olive oil (evoo).

Despite the growth in Australia’s evoo consumption, local consumers will not absorb supply, so the industry has embarked on a major export push.

One of the most active and successful marketers is Olea Australis, the Australian Stock Exchange-listed company behind the Dandaragan Estate label.

It recently launched a supermarket brand, Dandaragan Select, and has secured a distribution deal through Coles Supermarkets plus distribution deals in Hong Kong, Singapore and China.

According to Olea Australis executive chairman Gus Simpson, while the company produces a fraction (about 2,000 tonnes this harvest) of the 2.6 million tonnes of olive oil produced globally, its strength was in its product and brand position.

“The demand for extra virgin olive oil is increasing but there is a global shortage of real evoo,” Mr Simpson said.

“There are a lot of producers selling evoo when it’s really not.

“In time, the consumer will begin to know the difference. Just like people have become knowledgeable with wine, they will become knowledgeable with oil.”

The company has appointed Perth TV celebrity chef Aristos as Danadaragan Select “brand champion” to help build brand awareness and consumer education.

Mr Simpson said WA’s olive oil was well received internationally, even in strong producing nations such as Spain and Italy.

He said winning credible awards had helped.

“For the 2002 and 2003 harvests Dandaragan was Australia’s most awarded olive oil and last month won its second consecutive Diploma of Grand Mention at the Mastri Oleari Golden Lion Awards in Italy,” he said.

Mr Simpson said distributors had been appointed in the US, UK, Hong Kong, Singapore, Japan, Brazil, Germany, and India.

Fellow listed olive oil producer, Piquant Blue, which markets its oil under the Njoi label, is also working at establishing global distribution channels.

The company recently secured a two-year supply contract and capital investment worth $1.75 million from agribusiness Timbercorp.

Piquant Blue managing director Andrew Konowalous said the company would now look beyond the UK for export deals.

“We are now moving towards launching our products into the EU and the US during 2004,” he said.

“We plan to launch a Njoi Boort Estate [Timbercorp’s olive grove is located in Boort, Victoria] blend during 2004 as part of a series of regional blends to augment our current range of national blends.”

Piquant Blue, like Olea Australis and Frankland River Olive Company, will also launch a supermarket label.

Larenta Olives, however, will stick with one domestic brand, selling it through independent supermarkets and other retailers.

Chief executive Trevor Coward said Larenta’s main focus was the export market, for both bulk and branded oil.

Producing premium oil and building a premium brand is also presenting new marketing opportunities for a number of WA olive oil companies.

Both Olea Australis and Frankland River Olive Company will expand their retail offering to include other food products.

Frankland River Olive Oil managing director David Carr said marketing a range of table olives, olive tapanades, red wine vinegars and other food products were on the agenda.

“I’d say we would be doing that in the next 12 to 18 months,” he said.

Mr Simpson said Olea Australis would market table olives later this year and would also develop Dandaragan branded foods.

“Olive oil is a great masthead product. There are a lot of products compatible with that,” he said.

“We’ve acquired dry land olives and this year we will produce table olives. We will do other food products, like balsamic vinegars, tapanades and a variety of things that accompany good olive oils.

“We’re getting a lot of inquiries about high-quality Australian food products.”

Derek Fisher, president of the Moore River Olive Association, is watching this year’s production with keen interest.

“It’s going to be fascinating to see how it goes,” Mr Fisher said. “There is no doubt we can produce quality oil, but the real competition is in the supermarkets with imported oils.”

Like other producers, Mr Fisher emphasises the need to continue educating consumers about the taste and health features of genuine evoo, as opposed to imported products that purport to be of the same quality, but are inferior.

Mr Fisher is also optimistic of increased plantings in future years, following the flurry of spending between 1999 and 2001.

“After this year I think you will see a new phase of investment,” he said.