Private Label, Price Hikes Drive Sales in Europe

Despite challenging economic conditions and poor harvests, sales of European olive oil continue to rise with the increasing popularity of private label products.

By Mary Hernandez
May. 11, 2017 11:10 UTC
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Despite fac­ing sig­nif­i­cant chal­lenges over the past few years regard­ing pro­duc­tion and prod­uct fraud (and more recently the eco­nomic fall­out from Britain depart­ing the European Union), olive oil sales fig­ures across Europe are still on the rise.

According to research by ana­lyt­ics firm IRI, these fig­ures can be attrib­uted to sales of pri­vate label olive oil brands – as well as gen­eral price increases across the board.

Private label trade has con­tributed sig­nif­i­cantly to the €6.9 mil­lion ($7.49 mil­lion) increase in olive oil sales in Western Europe over the past twelve months.

Private label olive oil is any olive oil that has been man­u­fac­tured by a third party and then sold under a retailer’s brand name, and pri­vate label olive oil sales (and dis­count chan­nel brands) have risen in promi­nence across the major European super­mar­kets and hyper­mar­kets in Spain, Italy, Netherlands, Germany, UK, Greece and France.

IRI esti­mated that the UK expe­ri­enced a 5 per­cent increase in demand and vol­ume sales, while Germany saw a demand increase of 10.8 per­cent. A notable excep­tion occurred in Greece, where retailer Marinopoulos filed for bank­ruptcy, pulling its pop­u­lar pri­vate label range off the mar­ket, forc­ing con­sumers to seek alter­na­tive brands.

Consumer shop­ping data has demon­strated in the past that when the cost of raw mate­ri­als for cer­tain sta­ple prod­ucts increases, shop­pers will choose the best price option.

The increase in pop­u­lar­ity of pri­vate label items comes after last year’s find­ings by the same orga­ni­za­tion that pri­vate label prod­uct sales in Europe were stag­nant or declin­ing across the board.

But the recent resur­gence of pri­vate label brands could indi­cate a change in the land­scape, and IRI pre­dicts that pri­vate label brands will retain their new­found com­pet­i­tive edge through dif­fer­en­ti­a­tion on qual­i­ties other than pric­ing, through prod­uct port­fo­lio exten­sions and addi­tional pro­mo­tional activ­i­ties.

While the growth in pri­vate label has led to greater over­all sales, price increases are also respon­si­ble. Poor weather con­di­tions over the past few har­vests have cre­ated prob­lems for Europe’s biggest olive pro­duc­ers, decreas­ing yields and increas­ing the demand for what lit­tle there is to go around. Spain recently expe­ri­enced its worst olive har­vest in two decades, while Italy has had to cull over a mil­lion olive trees due to the deadly Xylella fas­tidiosa bac­te­r­ial out­breaks.



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