The Market Potential of Oleocanthal

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The very interesting speech of Mr Dan Flynn,nbspExecutive Director of UC Davis Olive Center, presented to the international conference ofnbspOleocanthal International Society, held innbspAncient Olympia, June 2-3, 2016
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imageI am here to speak about a cherished American value But Irsquom not going to talk about liberty Irsquom not going to talk about democracy Irsquom going to talk about money Making money

I propose that there is market potential in oleocanthal, and that the United States could be a good market Irsquoll tell you why

First, the US leads the world in the consumption of ldquofunctional foodsrdquo Functional foods are generally defined as foods that go beyond basic nutrition, that have specific properties that can improve health or prevent disease So while the US has a lot of health challenges, our consumers also spend a lot of money on functional foods, which have a higher price and larger profit margins than other foods

Second, the US is the third largest consumer of olive oil in the world, and 95 percent of that olive oil is imported So the US is accustomed to purchasing imported olive oil, and oleocanthal-rich oil offers opportunities to both imported and domestic suppliers

Third, the US consumes just one liter of olive oil per capita In contrast, Greece consumes 18 liters, Italy 15 liters, and Spain 12 liters There is plenty of room for growth among American consumers

In preparing for this presentation, I reviewed academic literature and also spoke with top experts in the field One of the experts I spoke to is John Segale, a public relations consultant who has worked at the highest levels in promoting the agricultural sector John told me ldquoin todayrsquos market, it is not enough to promote lsquopeaches from Californiarsquo Todayrsquos consumers are focused on health issues They spend money on a variety of products that they believe will improve their healthrdquo

So how do we increase consumption of oleocanthal-rich olive oil in the US? There are three critical steps

The first step is to conduct research Research would assess things like physiological effects, bioavailability, and clinical trials This scientific foundation is essential for gaining government approval for a health claim, which will enhance the marketability of the product John Segale told me ldquoThe marketing folks are always looking for points of differentiation They will make the health claim a primary or secondary message in their marketing plansrdquo

The agency that would approve a health claim in the US is the Food and Drug Administration, known as the FDA Currently the FDA allows a health claim related to the possible benefits of the monounsaturated fat in olive oil but does not have a health claim related to the phenolic content of olive oil However the EU does have a health claim stating that olive oilrsquos phenolic content can reduce oxidative stress, and the EU recently approved a second health claim related to the benefits of hydroxytyrosol in olive oil So a good place to start would be to submit the body of research that was the foundation for the EU health claims to the FDA to see if similar health claims can be approved in the US

After completing the research step, the second step is to survey consumers I spoke with Dr Christine Bruhn, a consumer food-marketing specialist, who recently retired from UC Davis after 40 years Christine said that a consumer survey is essential to ensure that a marketing budget is spent effectively She said, ldquoFind out what consumers know, where they get their information, and who they trustrdquo

Fortunately, the International Food Information Council just released their 2016 Food and Health Survey last Thursday This is a survey that is conducted every year and gives us insight into the minds of American consumers Letrsquos look at some of the results

The survey asked Americans how they define a healthy food Thirty-five percent defined a healthy food by what it does not contain, for example sugar or saturated fat Looking at the other responses, you see that olive oil would fit well with the American consumers definition of a healthy food ldquogood for you,rdquo ldquocontains healthy ingredients,rdquo ldquounprocessed,rdquo ldquofresh,rdquo ldquosimple,rdquo and ldquonutritiousrdquo

The survey asked consumers which sources they trust most to provide accurate information about the foods to eat The top two responses were ldquodietitian/nutritionistrdquo and ldquopersonal health care professional,rdquo so a marketing campaign on oleocanthal should consider using these professionals to deliver the message

The survey asked ldquoHow much of an impact do the following have on your decision to buy food and beverages?rdquo and the top responses were ldquotasterdquo 84 percent, ldquopricerdquo 71 percent and ldquohealthfulnessrdquo 64 percent

The survey also asked ldquoWhich of the following motivated you to change your eating habits?rdquo The top responses were ldquoI wanted to lose weight,rdquo ldquoI wanted to protect my long-term health,rdquo and ldquoI wanted to feel better and to have more energyrdquo An effective marketing campaign on olive oil may want to focus on one of these three factors that are important to consumers

While this survey provides us general information about American consumers, it would also be important for survey research to tell us what consumers think specifically about olive oil Christine Bruhn told me that it is best to build upon the consumerrsquos foundation of knowledge, much easier than when starting with no consumer knowledge In 2013 the UC Davis Olive Center conducted a survey of more than 2,000 consumers to find out what they knew about olive oil and why they bought it The survey found that 82 percent agreed or strongly agreed with the statement ldquoI choose to use olive oil over other oils/fats because it is healthierrdquo So a health theme with olive oil marketing seems a good fit

The survey also found that 26 percent of consumers liked an olive oil that was quite bitter and pungent, and this market segment may be a good target for oleocanthal-rich olive oil Thirty percent of consumers liked a wide range of olive oil flavor profiles, from ripe to green flavors Forty-four percent of consumers actually liked an olive oil that was rancid and fusty, which may be attributed to our finding that defective olive oil is a familiar flavor profile to American consumers In 2010 and 2011 the UC Davis Olive Center tested olive oil in supermarkets and found that two-thirds of imported oil was defective

After conducting the research and the survey, the final step is to educate consumers, which is another way of saying ldquomarketingrdquo I spoke to Gwen Young, who is the president of The Tomato Foundation and a longtime leader in the tomato industry Gwen said, ldquoYou cannot afford to do nothing – then you stay a cheap commodityrdquo

In educating consumers, Christine Bruhn says that the message needs to be ldquounderstandable and actionablerdquo This advice was echoed by two studies I came across One said to ldquoavoid specialist terminology and medical detailsrdquo and the other said ldquoconsumers need to understand the benefits, not the science behind the productrdquo

A 2015 survey from Food Integrity found that half of consumers look to the product label to find health information Twenty-five percent get this information from a third-party website, 17 percent look to the company website, and 8 percent get the information from a QR code Given the importance of the label for the consumer in accessing health information, letrsquos look at a few labels that were on the supermarket shelf just last week in California

This first label shows Carbonell extra virgin olive oil There is a heart-shaped illustration with ldquoHeart Healthyrdquo prominently on the front of the label However, this was the only olive oil that I saw that mentioned health, and this brand is not that commonly found in US supermarkets

Then there is Mazola canola oil, which also says that it is ldquoheart healthyrdquo And a label from Mazola corn oil, and it says that it is ldquoheart healthyrdquo too Both of these oils are much less expensive than olive oil

Here is ldquoNutrioli,rdquo pure soy oil The label at the top states ldquoPure Soy, Pure Healthrdquo in English and Spanish

Finally here is a brand called ldquoOleíco,rdquo which is high-oleic safflower oil Safflower seed is now bred to be high in oleic acid, which is the main fatty acid in olive oil The label has a neck tag stating that the oil is recommended by this very attractive certified nutritionist Remember what we just learned from the survey ndash consumers trust nutritionists the most Maybe olive oil can learn from these other oils on how to market olive oil as healthy and sexy

Olive oil does not market itself as healthy, but the seed oils strongly emphasize health It could be that olive oil already has a reputation for being healthy, and the seed oils are trying to compete by claiming that they are just as healthy

Yet, not all producers want to market olive oil as healthy I spoke to Liz Tagami, who is the general manager at Lucero Olive Oil, a high-quality brand Liz told me, ldquoAs a producer, we donrsquot want to market to health We want to look and sound delicious and graciousrdquo That is a legitimate perspective ndash some producers want to be recognized for their great flavor and quality, not because olive oil is good for their customers

There are other industry considerations to consider As I mentioned, only 26 percent of consumers liked a bitter and pungent oil, which is a likely flavor profile for oils that are high in oleocanthal And some producers many not want to make the operational changes necessary to produce oleocanthal-rich oil, such as harvesting earlier If the producer does not get paid a premium for early-harvest olive oil, there is little incentive for the producer to accept a lower yield that comes with an early harvest

Based on these considerations, producers may want to consider additional methods of delivering oleocanthal to consumers For example, in the US there is a product called Olivenol, which is a capsule filled with a powder that is high in hydroxytyrosol The power is freeze-dried from olive mill wastewater ndash there are actually far more phenolic compounds in the wastewater than in the oil, because most of the compounds are water-soluble

Another idea would be to market oleocanthal in the same manner as a product called ldquo5-Hour Energyrdquo This product is usually sold near the cash register in gas stations and convenience stores A bottle is about 20 ml and costs about $250 The main active ingredient is caffeine The product also contains vitamins, which studies have not shown to increase energy In 2012 5-Hour Energy had sales of $1 billion, which is more than the total value of olive oil sold in the United States

As for funding a marketing campaign, I have a couple of models to share One approach is through a non-profit, non-governmental organization such as The Tomato Foundation This non-commercial foundation seeks to increase demand for tomatoes by educating consumers with simple, truthful nutrition information and by promoting cooking skills The foundation is funded by growers, distributors, seed companies, equipment manufacturers, processors, and others, and engages in a number of educational efforts, particularly with new media such as food bloggers and health websites such as WebMD

Another funding approach is through a commodity commission California has many such commissions for specific crops such as walnuts and strawberries The commissions are set up based on state legislative guidelines and are funded by producers who pay based on production volume The commissions often fund research and marketing

One highly successful example is the Almond Board of California, which has increased demand for California almonds ndash California now grows 85 percent of the global supply The olive oil sector can learn from such a success story Look at the Almond Boardrsquos home page ldquoPower Up with Plant-Based Recipes and Tips with Culinary Nutritionist Mikaela Reubenrdquo This headline suggests that the Almond Board follows or funds consumer surveys, and market to the consumer desire to increase energy and trust nutritionists

Gwen Young of The Tomato Foundation told me ldquocollaboration is keyrdquo These organizations donrsquot always have huge amounts of money to spend on marketing, so it makes sense for them to align with other organizations that reinforce the health message For example, healthy lycopene in tomatoes can be absorbed more easily when tomatoes are consumed with olive oil, so The Tomato Foundation works with the International Olive Council on joint marketing projects Like Greek salad, the Mediterranean Diet has many components, and they all work symbiotically to promote health, and the marketing efforts can do the same

In summary, oleocanthal helps make olive oil a functional food, which can command higher prices and larger profit margins Research is essential to establish a health claim that can be a powerful marketing focus Once the research is established, consumers should be surveyed to find out what they know, whom they trust and to identify promising market segments Once the survey is completed, an education campaign can use trusted sources such as nutritionists, and labels are a good place for health information There are various models for funding the education effort, but collaboration can leverage a marketing budget for greater impact

How do you measure success? As Gwen Young from The Tomato Foundation told me, success sometimes is difficult to quantify, but as she also said, ldquoYou cannot do nothing – then you stay a cheap commodityrdquo

In marketing oleocanthal, I propose three criteria for measuring success higher quality, better health, and more money in the producerrsquos pocket
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