This summer in Greece I wanted to explore all the commodities and culinary uprising I’ve heard about here in California from websites like oliveoiltimes.com. Was this really happening? Were Greeks in fact beginning to brand their exports and create a culinary mecca outside of the traditional taverna? We decided to reach out to, what Greece considers, the best of the best. From Greece’s version of Paul Bocuse, chef Athinagoras Kostakos, to a fourth generation olive oil distributor who’s product named Esti, is sold at one of my favorite haute couture food shops–Dean and Deluca.
Once you get to know me better here at the Pappas Post, you’ll know that I study rural diets of the southern Mediterranean in great detail (here’s my feedback on how to select extra virgin olive oil in WebMD). I’ve written here before on how the ancient Greek/Mediterranean Diet has been helping the Greek economy bounce back. It’s not only our young chefs and our cuisine that will help, but also our agricultural products as well.
So we reached out to George and Sotiris over at Greek Land Foods Ltd, a company who’s been in the olive oil business since 1912 (and the proprietors behind Esti), to learn more about the olive oil trade.
We all probably know by now the king of Greek agriculture should be apparent: the olive and its byproduct olive oil. While tomatoes, feta cheese, peaches and saffron are also helping to bolster exports they are less well known—olive oil is already an exceptionally well-established product in the international community.
Remember all the times your Uncle George or Sotiris in the village told us how the Italians come and buy our precious commodity? He was right. Unfortunately, 60% of Grecian olive oil is sold in bulk to Italy sans standardization. According to the McKinsey Management Consulting Firm in Athens, this leads to the creation of a “black hole” in the oil market—Italy gets the lion’s share of the 50% markup of the final product.
If Greece is serious about making an “economic comeback” they should strongly consider reversing the situation and ensuring they gain the full benefits of the sale of their most coveted product. Below I’ll provide background on the sale of Greek Olive Oil and some potential ways it can be better used to benefit the Greek economy.
Greek Oil: Always Poorly Marketed
Grecian Olive Oil is the “variety” that everyone has heard of but no one can actually find (and thus purchase!). This is due to their habit of selling off their oil in bulk to other countries and organizations. Altis Oil is made from Greek olives, but is sold by a Dutch-British conglomerate. Another popular Grecian oil is “Minerva”, but a British company sells that as well.
Currently, Grecian companies remain too small to compete against foreign goliaths. The major cause: small farms have a hard time keeping up. In Greece, olives are still hand picked; in Spain machines produce 2-10 tons of olives per hour.
Spain and Italy and other major producers also have another tactic on their side—they mix cheaper product (like oil from Tunisia and Algeria) in with theirs. Such a process would be considered extremely taboo in Greece (no matter how much it saves on costs, time etc.) as the olive and its oil is still taken very seriously.
Despite these pitfalls Greece has good reason to become the David that slays Goliath. Currently, 60% of the olives they produce are sold to other countries in bulk—but common wisdom states that the lion’s share of food industry profit comes from the distribution of the finished product. To reap the benefits of their crop, they need to branch out; olive style (no pun intended!)—Especially if they want a fair cut of that 50% premium Italy Currently enjoys.
Economic Opportunity: Foodie Style
It’s time to be frank: as the 3rd largest producer of olives worldwide, it’s time Greece cash in on their valuable and high quality exports rather than allowing other countries to do so.
This doesn’t just apply to olive oil: Greece holds 28% of the Greek Feta cheese market and 30% of Greek Style yogurt markets. The potential for growth is clear—who wouldn’t say yes to authentic Greek products?
How to Pull This Off:
McKinsey Management suggests starting by targeting key markets. For Olive Oil: Germany, Austria, Italy, Russia and North America are prime markets waiting to be exported to.
Secondly, standardization and improving brand awareness is a must: official “Greek Certification” can aid in both of these goals and boost exports to big markets like the UK and USA.
Thirdly, creating variations of products will also boost sales. Don’t just sell “Kalamata olives” sell ready-to-cook versus ready-to-eat or convenience packaging options.
Product variations aren’t the only things Greece needs to invest in. Creating major plants (2 for olive oil and 2 for other fruits and veggies) that are close to the raw materials (to avoid transfer costs) will increase export quantities and cut costs.
Finally, McKinsey Management suggests Greece create an “umbrella organization” to represent and promote all of their valuable and authentic agricultural products. Doing so will only strengthen their access to the markets they choose to target.
In the End:
The Greeks once believed that the olive tree was given to them by the goddess Athena to win their loyalty. While they may no longer be loyal to the gods of old, they certainly have never wavered in their love of the olive and it’s oil byproduct.
It is high time then, that they harness their passion and love for all things Grecian and edible and start turning a profit. With such high quality products, they’re certain to be a hit.
Maybe we should court a high profile name like Jennifer Aniston to represent our precious commodity. She did it for Smart Water–why not Greek olives!