World Olive Oil Exhibition Focuses on Doing Business in the U.S.

Summary

The World Olive Oil Exhibition in Madrid will focus on doing busi­ness in the United States, address­ing issues such as qual­ity expec­ta­tions and trade bar­ri­ers. Industry experts will dis­cuss the chal­lenges of enter­ing the American mar­ket, the poten­tial for growth, and the impor­tance of edu­cat­ing con­sumers on olive oil qual­ity.

More than 200 olive oil pro­duc­ers will gather in Madrid next month to check out com­peti­tors, do some busi­ness and dis­cuss preva­lent issues for the indus­try.

One of the over­ar­ch­ing themes of the two-day World Olive Oil Exhibition (WOOE) will be how to do busi­ness in the United States, the world’s num­ber one importer of olive oil.

“The WOOE is an event mainly devoted to busi­ness and inter­na­tional stim­u­la­tion of com­mer­cial con­tacts,” said Cristina Villar, a spokes­woman for the event. ​“What is most impor­tant about the fair are the sub­stan­tial trans­ac­tions of olive oil buy­ing and sell­ing car­ried out at a global scale.”

Maria Reyes, the direc­tor of cat­e­gory man­age­ment at KeHE Distributors, will dis­cuss the trade bar­ri­ers, qual­ity expec­ta­tions and costs of import­ing to the U.S. She sees a lot of poten­tial for exporters as long as they are ready to meet the chal­lenges of the bur­geon­ing mar­ket.

“In my opin­ion, the two biggest issues are that the mar­ket is flooded with cheap, poor qual­ity bad tast­ing oil and that the con­sumer is still very con­fused as to what type of oil they should be buy­ing,” she said.

Reyes said it is up to exporters and the olive oil indus­try as a whole to edu­cate American retail­ers and con­sumers, so they make the best deci­sions about what prod­ucts they are plac­ing on their shelves.

Demand for high-qual­ity oil is there, with pre­mium olive oil sales increas­ing in the U.S. over the past half decade. However, the com­pe­ti­tion is steep with coconut oil, avo­cado oil and ghee also com­pet­ing for a sim­i­lar mar­ket niche.

“The right ques­tions should be asked and there should be a ver­i­fi­ca­tion process to ensure that what is being placed on the shelf is what the label says it is,” Reyes said. ​“The con­sumers play a large role in this and have demon­strated that they are will­ing to pay more for a qual­ity prod­uct.”

Dave Neuman, CEO of Gaea North America, will fol­low Reyes and dis­cuss how to nav­i­gate the com­pli­cated American bureau­cracy once a com­pany becomes a dis­trib­u­tor in the States. In other coun­tries, such as Argentina, olive oil pro­duc­ers can sell directly to retail­ers. However, for for­eign com­pa­nies branch­ing out into the American mar­ket, this is not always pos­si­ble.

“You don’t have that here in the U.S.,” Neuman said. ​“You have to have an importer or you have to have an office in the U.S. Then you have to sell to a dis­trib­u­tor and then the dis­trib­u­tor sells to the retailer and the retailer sells to the con­sumer. That is a lot of chang­ing hands. It’s a lot of added cost.”

Neuman said it is impor­tant for for­eign com­pa­nies to under­stand these hur­dles, so they can con­tinue to com­pete in the United States’ grow­ing mar­ket. He also will be assuag­ing the fears of Spanish com­pa­nies with regards to the cur­rent admin­is­tra­tion’s trade poli­cies.

President Donald Trump ran on an ​“America First” for­eign pol­icy with the goal of low­er­ing the trade deficit. His admin­is­tra­tion has already imposed tar­iffs on Spanish table olives but has said it will not do the same with olive oil. Neuman believes that imported olive oil will remain tar­iff-free in spite of the administration’s ten­dency to change course on its orig­i­nal pol­icy plans.

“California is such a small pro­ducer, pro­vid­ing less than eight per­cent of our US demand of olive oil, that it does­n’t really make sense to make a tar­iff on some­thing that we have to have,” Neuman said.

“I haven’t heard any­thing to that effect because it’s not really pro­tect­ing any­one. Olive oil is already expen­sive and I don’t think any­one is going to want to see an addi­tional tar­iff to make the prod­uct even harder to use con­sid­er­ing the health ben­e­fits and attrib­utes of it.”

Other than dis­cussing the American mar­ket at the WOOE, Neuman said he is look­ing for­ward to see­ing how the olive oil sec­tor can become more tech­no­log­i­cally advanced. He said that he would like to see the use of drones and drone spray­ing to com­bat the olive fruit fly as well as more automa­tion in har­vest­ing.

“I’d like to see there be a lit­tle bit more effort on auto­mated har­vest­ing for coun­tries such as Greece and Italy that don’t really have the ter­rain to do it,” he said. ​“So I’m hop­ing we’ll see some robot­ics, some­thing to help alle­vi­ate some of the stress of har­vest­ing and also pro­tect­ing the crop from olive flies.”

However, busi­ness will be at the fore­front of many atten­dees’ minds as they crowd the Feria de Madrid on March 21 and 22. About 3,000 peo­ple attended the exhi­bi­tion last year and Villar said she expects that num­ber to be higher this time. Many of the atten­dees will be look­ing to make some deals as well as gain insight into the ever-chang­ing world of global trade.

Santiago Botas, the gen­eral man­ager of the WOOE, said the exhi­bi­tion presents an oppor­tu­nity for every­one to take stock of what is going on in the olive oil world and pre­pare for the numer­ous chal­lenges fac­ing the indus­try.

“The seri­ous sit­u­a­tion fac­ing the olive oil indus­try, together with a sig­nif­i­cant imbal­ance between sup­ply and demand, low prices and decreas­ing sub­si­dies requires the imple­men­ta­tion of new mech­a­nisms to pro­mote a change in trends and a new trade order that is more open and trans­par­ent,” he said.

Neuman sees the exhi­bi­tion as an oppor­tu­nity to facil­i­tate trade and find solu­tions to some of the indus­tries prob­lems.

“I think the expo is going to be excit­ing this year,” he said. ​“WOOE or not, the con­ver­sa­tion about bring­ing qual­ity oil to America has to con­tinue.”

• World Olive Oil Exhibition