Greek Olive Oil Exporters Seeking a Piece of the Brand-Name Business

KALAMATA, Greece —  For many years, Greek olive oil makers had just one main thing to say about their product: ciao.

About a third of Greece’s annual olive oil production is exported in bulk to Italy, where it is mixed with local and other imported varieties and marketed under Italian brand names. There is no way of knowing which brands mix oils and which do not.

Since the price of bottled oil on store shelves is significantly higher than bulk sales, Greek producers lose out on large amounts of potential profits when their oil is sold under Italian labels.

Now, Greek producers are looking for a little more respect--and possible revenue.

Near the southern city of Kalamata, one of Greece’s most renowned olive-producing regions, Yiannis Kozobolis proudly displays a square glass bottle of extra virgin olive oil bearing the logo of his agriculture cooperative, Avia, featuring the region’s castle.

Avia, comprising 295 olive producers, began efforts to package and market its oil for export two years ago.

It has managed now to find a niche--albeit tiny--in the international market, exporting to Britain, France and Germany. About 19 tons of Avia’s 340-ton production last season was sold to these countries in brand form, Kozobolis said.

Another 80 tons were sold in bulk to Italy, while the rest was sold personally by the cooperative members to friends and other businesses, he added.

The effort by Avia and a few other small Greek olive oil exporters could represent the first steps in raising the product’s profile--and profits--in a country where olives have been revered since antiquity. The coveted prize for winners of the ancient Olympic games was a wreath of wild olives.

It’s an uphill struggle in international markets dominated by giants such as Italy’s Bertolli, Berio and Colavita. The larger companies have marketing expertise, established distribution networks and, above all, a fierce competitiveness that leaves little room for upstarts like new Greek brands.

Dimitris Drakos, prefect of the Messinia region that includes Kalamata, urged the Greeks to try to emulate the Italians.

“We must take care to copy them and to exceed them, and not to accuse them,” he said.

A marketing strategy to increase Greece’s share of the retail olive oil market abroad is gaining momentum through advertising and subsidies for participation in international food fairs.

Yet trying to carve out a market share against powerful Italy is no simple recipe. Italian brands have generations of loyal customers, and Italy, through the phenomenal popularity of its cuisine, carries a reputation as the cradle of Mediterranean olive oil production.

“The Italians have been in the American or Australian markets for roughly 100 years,” said George Economou, general manager of the Greek Assn. of Industries and Processors of Olive Oil, or SEVITEL. “Italian cuisine is much more well-known, and as a result, Italian products accompany these dishes rather than Greek ones.”

Greece each year produces roughly 350,000 tons of olive oil, with about 70 to 75% of this being the very pure variety known as extra virgin.

Annual exports amount to between 100,000 and 120,000 tons, with the majority sold in bulk to Italy, Economou says.

According to the Italian Institute for Foreign Trade, 42% of all imported olive oil in 1996 was bought from Greece, as was 52.2% of all imported extra virgin oil.

Italy, which also imports olive oil from Spain and North Africa, produced 390,000 tons of olive oil in 1996, while its 1997 production was estimated at 570,000 tons.

If the extra olive oil from Greece weren’t exported to Italy, it would be unused.

Although the price for olive oil has fallen recently, popular attention to the Mediterranean diet could give Greek producers a boost. Many nutritionists believe a diet rich in vegetables, fish and olive oil helps combat heart disease.

Economou believes the reason for the excellent quality of most of the country’s olive oil lies in its climate and terrain, as well as in the continued widespread use of small, family-run olive presses.

“There are around 2,500 olive presses scattered around the country,” he said. Many are family businesses making relatively small quantities that are sold immediately and spend little time in storage.

But the drop in olive oil prices--the result of increase in European production coupled with a fall in consumption--has forced many Greek farmers to expand their activities.

“We just can’t survive on olive farming any more,” complained Christos Koutsis, a farmer in the Kallianeika village near Kalamata.

Koutsis now also herds goats to make ends meet.