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“Olive oil market in India competitive & price-sensitive,” says Bhasin
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Monday, 06 November, 2017, 08 : 00 AM [IST]
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 The olive oil category has a minuscule share of the overall edible oil market, which is only about 0.1 per cent in India.
There are about 90 olive brands currently competing against each other. Players like Borges, Leonardo, Del Monte and RS 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,” Rajneesh Bhasin, managing director, Borges India, told Nandita Vijay in an e-mail. Excerpts:
How do you see the growth of olive oil use and consumption in India?
The category, which started at 3,000 tonne about 5-6 years ago, stands at 12,730 tonne today. With a growth rate between 15-20 per cent annually, the category is surely catching onto the Indian masses.
The increase in the imports is an indicator of the increased consumption and penetration of this category in India.
The current Indian scenario is supportive for the category to grow owing to the growing health awareness and the increased adaption of the healthy lifestyle.
In fact, there is an increase in the base of explorers who are willing to try and invest in products which offer healthy benefits, rather than sticking to the existing bucket of everyday products.
Could you give a peek into the olive oil industry in India and the existing players?
The olive industry in India today is far more evolved from what it was 8-10 years ago. Back then, olive or jaitoon oil was just another higher-grade oil used for skin and baby massage.
Its usage as a cooking or edible oil was known to only those who were well-travelled and aware of continental and Mediterranean food.
Today, the olive industry is far more developed, with olive oil entering the masses as an edible oil rather than a massage oil.
Indians are aware of its benefits and are ready to cook their regular meals in olive oil. But there is still a long way to go.
Today, the olive oil category has a minuscule share of the overall edible oil market, which is only about 0.1 per cent in India.
There are about 90 olive brands currently competing against each other. Players like Borges, Leonardo, Del Monte, and RS 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.
Do you see this oil replacing Indian domestic cooking oil mediums?
Indian domestic cooking requires high-heat cooking like frying, sautéing and use of Indian spices. Olive oil, which has the essence of olives and a low smoking point, does not fit in.
So, we, at Borges, introduced an Extra Light olive oil, which has a neutral taste and a high smoking point, which makes it an ideal fit for everyday Indian cooking.
Since then, we have been known to be the pioneers of olive oil in India, and till today, command 70-80 per cent share in the Extra Light category.
What are the visible trends emerging in the use and consumption pattern of olive oil in India?
Well, when the product came to India it was used majorly only for external use as a massage oil.
Lately, the Indian consumers started accepting the product as an edible oil, owing to its health benefits.
Olive oil is the gold standard among all the edible oils, and not bringing it to use is a big miss.
When Borges came to India, it was more a pomace-dominated market. Then, we introduced Extra Light olive oil for everyday Indian cooking, and it was a hit among the masses.
The shift from pomace to Extra Light wasn’t easy owing to the higher prices, but the consumer, being more equipped with education, was wise to take a call.
The answer to their query of having an olive oil for everyday Indian cooking was answered by Borges Extra Light.
Today, we see an increased movement towards Extra Virgin olive oil, which is used for salads and as a healthier substitute to butter.
It is uplifting to see this shift from various variants of olive oil, this is a clear indicator of the fact that the Indian consumer is evolving owing to increased awareness from platforms like digital, brand activations, advertisements and articles and the travel across the globe.
How is the pricing for olive oil arrived at?
It is just like the pricing for any other edible oil, with only a few other components added since it is imported.
These include the shipping charges, excise duties and other custom clearance-related charges.
Like every other commodity, the rates for the olive oil depend on multiple factors like crop production and the quality of the crop, which is impacted due to environmental factors like drought, rains, etc. in its producing nations, the major one being Spain.
The exchange rate also has a role to play. Due to the depreciation of the rupee in the last year, and the poor production last year, the consumer prices of olive oil shot up, but the current scenario is much better.
When it is imported oil, how would companies be able to rationalise the prices?
Well, being imported the prices are bound to go up, and there cannot be much rationalisation.
After all the companies incur the additional costs to import the product to India and are a cost to the company as well.
But then, it is A far more superior product owing to its quality and health benefits it brings due to the presence of 75-80 per cent monounsaturated fatty acids (MUFA), antioxidants and Vitamins E and K.
What are the imminent challenges faced by the olive oil sector?
Pricing will remain a major challenge to the olive oil category growth. The increased import duty and the rising product costs have further increased the cost of the product and made it more expensive for the consumers.
Being a premium product, it is yet to become affordable for the masses, which is a major hindrance in its growth.
While many have shifted from other edible oils to olive oil owing to its health benefits, there are many who are yet to make a shift.
I think the trend is changing, though it will take a long time, as we all know these are eating habits that change overtime.
What has been the growth strategy of Borges India to garner the 30 per cent market share across retail chains and be the number one olive oil brand in India?
Borges India was set up as a 100 per cent subsidiary in 2009 and commenced commercial operations in 2010.
When we kickstarted our business in India, our aim wasn’t just to only become the number one olive oil brand in India, but also pull it off by firstly understanding the Indian consumer’s needs and demands and then bringing a product which serves their demands to the best with the highest quality.
Basis this consumer focus, we discovered that the Indian consumer was on outlook for an olive oil which could be used for everyday usage without any compromise in the taste and flavour of Indian cuisine, and hence, we introduced our Extra Light In Taste olive oil, which has earned us a 30 per cent market share across modern trade chains and the tag of number one olive oil brand in India.
Based on successful category-building initiatives over the years, Borges Extra Light was voted product of the year in the olive oil category in an independent study conducted by Nielsen, where over 7,000 consumers took the survey.
Apart from just olive oil, it is a Mediterranean food group, and the three pillars for the company’s growth are heart-healthy oils (which comprises olive oil and seed oils, which are high in MUFA), dry pasta and pasta sauces and vinegars and an imported California nut range.
The heart-healthy oil range has been expanded from olive oil to seed oils like Canola and high-MUFA sunflower, where the company is already getting very good traction.
The dry pasta range has again been expanded from a basic range of durum wheat pasta to a more premium range, which is whole-wheat pasta and high in fibre and protein, making it healthier and more nutritious.
The company has launched a premium range of Italian sauces, which come loaded with the goodness of extra-virgin olive oil.
Besides, Borges is one among the very few branded players with a pan-India presence for a range of California nuts, including walnuts, pistachios and almonds.
Now Borges is a premium-priced oil. So how does the company manage to garner the market share?
Olive oil as a category itself is premium, and yes, we aren’t the cheapest in the category landscape.
Our market share has more to do with the brand equity and our investments in the consumer awareness than the pricing.
Borges, as a brand, has always invested in consumer empowering and education initiatives, which have helped us build a loyal base of consumers, who value the brand credibility and our quality quotient.
In fact, we were the first olive oil brand in India to have undertaken a 360-degree marketing campaign for olive oil focused on health and wellness.
It is this base of our loyal consumers and our focussed approach at building the olive oil category which have made us command a good 30-35% market share in the olive oil category.
How does Borges compete with Indian olive oil brands like that of Marico, among others?
Firstly, the question needs to be reframed, because Marico is into blends made with olive oil and is not in the olive oil category.
We compete with the other olive oil brands present in India on the basis of our expertise in this category and our commitment towards empowering the consumers with a great deal of information concerning olive oil usage and its benefits.
In addition to that, being a 100 per cent subsidiary of Borges International Group, a globally-acclaimed olive oil brand which has over 100 years of expertise in the olive oil segment and a presence in over 100 nations itself makes us the expert in this space in India.
What are the future efforts of the company in India? Can you also tell us about the facility details to package this imported oil and label the same?
In the next four to six years, we plan to triple our turnover from 10 million euro to about 30 million euro, backed by new launches like apple cider vinegar, Italian sauces, California nuts (almonds, pistachios and walnuts) and others, which are currently in the planning process.
Olive oils, seed oils, pastas, pasta sauces and apple cider vinegar are processed and packaged in Spain, while the nuts are from California. Our pastas and pasta sauces are processed and packaged in Italy.
Borges is a 100% subsidiary of Borges International Group means that we manufacture, pack, distribute and market our products ourselves.
Plus, with that comes the end-to-end involvement and adherence to stringent international quality standards.
This is an assurance for the consumers that they get the best quality product with international standards being met for each of them.
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