Global Observer

Spanish gourmet goods go global

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MADRID -- If Spain produces the majority of the world's olive oil, why do most bottles read, 'Made in Italy?'

MADRID -- Name a type of Spanish wine. Now, name a type of Spanish olive oil. While the regulations, segmentation and gourmet differentiation is nearly the same, surely, your answers are different. Theirry Scelles and his BuyVirginOliveOil.com are looking to change that.

There are 260 types of Spanish olives and more than 600 types of Spanish grapes. Yet we are able to tell our Tempranillo grapes from our Arien, while we can't tell our Arbequina olives from our Picuares, when probably more meals are accompanied with oil than wine. Scelles says that, in olive oil, there are "many, many, many, many brands, similar to wine, but they are not as recognized as wine in the international market." There are even olive oil tastings, where the golden-green stuff is smelled and then spread on porous bread to be analyzed, savored and judged.

While the market is soaked in different kinds of oil, the consumer isn't buying. There is little to no brand recognition in Spanish olive oil. "You would never imagine these vineyards to put another label on it," Scelles says, pointing to shelves full of wine at a Madrid cafe.

This is, in part, the olive's fault. While wine gets better with age, olive oil only has a shelf life of about two years -- and even less, if it's exposed to light, which oxidizes the oil. "If you don't sell your product (oil,) it has no (other) uses," Scelles says. He pointed out that there are countless oils used in skincare and beauty products, making it not a big olive market. "Once you produce it, you have to sell it, fast." November and December olive harvesting must be followed directly by juicing into large barrels, then bottled and quickly sold.

This is why most oil companies sell to just one distributor, trying to pass it on in the fastest way. "I think that many companies in the oil market, what they want to do is make sure that all the oil they are going to produce is going to be sold," Scelles says. "If you have someone to buy 90 percent" of your annual yield, "you say, 'Take it'." This definitely puts negotiating power into the hands of the distributors, who can name their price.

Forty-five percent of the world's oil is produced in Spain. However, only 30 percent of it is bought on the peninsula, most commonly out of nameless store brand packaging, and almost always on sale.

A large percentage of the rest heads over to Italy. "A lot of Spanish companies will sell in bulk their oil to Italian companies who will bottle and brand it abroad," Scelles says. Spanish oil companies "sell much to Italy, who is going to bottle and put an English or Italian name and sell it as an Italian product," Scelles says, giving the recognition, inaccurately, to Italian olives and raising the price. If Spain sold their EVOO directly to international distributors, they would cut out the Italian middle man, thus cutting the cost.

Scelles repeated the common refrain that "Spain is afraid of risks. Companies don't know what will happen if they have more channels."

Olives are also tricky to grow. Scelles describes them as "quite labor intensive," needing a large growing surface, and the climate is crucial. This year's bone-dry drought has forced olive prices up again. Plus, good olives come from trees that take decades to grow.

With the cost of production up, the desire to take risks goes down even more, which is why Scelles is using his marketing company to appeal to the Spanish pride.

"It doesn't make sense to leave the added value to another country," Scelles says of the delicious oil. He wants to foster label and brand pride, like with wine, and to help oil companies to export their products throughout Europe and then to the U.S. and Asia. "The goal is really to help them (oil producers) to be able to sell under their own brand, not to use a white label." He is doing this through his Buy Virgin Olive Oil website, targeting international distributors and, to a lesser extent, the eager individual customer. Since the olive is such a challenging fruit, he says producers are only left with flexibility and creativity in bottle design and marketing, which he hopes they will pursue with him.

About six months ago, Scelles began planning to sell all the gourmet that Spain has to offer to international markets. "The idea was to sell the best typical Spanish food outside of Spain," he says. His next step is to turn the coveted Spanish jamon into a multinational commodity.

There is no shortage of interest, as China is looking to produce their own pata negras -- succulent legs of cured acorn-fed pork. SP already talked about how especially the Chinese are flocking to Spain to stock up on culture and luxury. A boost in Asian tourists is a major reason why España has become the second-most-visited country in the world. Now, the Chinese are trying to produce Spanish delicacies on their home soil. The controversial attempted copying of Spain's prized pigs has been debated for about a year now. However, the copies thus far failed to meet the Iberian standards of richness. "I think it's going to take some time for them [the Chinese] to produce high quality," Scelles says.

While food regulations, especially with pork products sold to the U.S., are a struggle, there is no shortage of desire for the Mediterranean diet. The Spanish food industry must rush to market itself before imitation turns from the highest form of flattery to another blow to the Spanish economy.

Photos: BuyVirginOliveOil

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Jennifer Riggins

Correspondent (Barcelona)

Jennifer Riggins is the content manager and community builder for two SaaS Quote Roller and PandaDoc, as well as she teaches sales, English, and public speaking for Spanish small business. She holds a degree from William Paterson University. She is based in Spain. Follow her on Twitter. Disclosure