Originally Published in the Australian and New Zealand Olive Grower and Processor

Ten brands of Australian Extra Virgin Olive Oil are on our local supermarket shelves in Melbourne this morning. That’s double the number available at the same time last year. There is even an olive oil-canola blend in a box – smart thinking from Cobram Estate.

The prices vary substantially from around $16/litre to $23/litre. Generally prices are higher than imported brands, so we are relying on the customer to spend a little more for the local product which hopefully is fresher and better quality. Although there was an Australian ‘line’ bottled in 2002 with a ‘best before’ date of December 2006.

The doubling of the number of local brands also applies to the boutique olive shops around the country. A variety of labels is filling the shelf-space as new producers jockey for the boutique market segment which accounts for 5% of Australia’s 9,000 tonnes of extra virgin olive oil sales.

Retailers from both the supermarket and boutique segments suggest that there is space on their shelves for up to 5 fast moving brands of Australian Extra Virgin Olive Oil. Shelf-watchers may find this difficult to accept when they see the multitude of brands on the supermarket shelf – but check closely and you will find that well over half are refined olive oils such as ‘pure’ and ‘lite’.

Assuming the retailers are right, and they should know, we can expect that many labels will fall away and producers will need to find other outlets for their product. This can be achieved through merging with the better selling brands, selling in bulk or finding a volume outlet in foodservice, such as a restaurant or two.

Another option I have heard talked about often is the internet. Unlike the retail shelves there is unlimited space and no limit on the number of brands that can be offered for sale. There is also the attraction that one can sell direct and by-pass the pesky wholesalers and distributors who add their ‘outrageous’ margins, driving down the price to the producer!

In this discussion we will talk about selling boutique labels or brands online and leave the internet trading in bulk olive oil for another day.

A Google search for extra virgin olive brings up around 1.7 million hits worldwide and 77,500 for Australia alone. So our first conclusion must be that cyberspace is as crowded as, and no less competitive than, shelf space.

A surf through the various websites selling olive oil reveals three types: the sell everything destinations such as eBay; the dedicated extra virgin olive oil sales sites; and the sites of individual olive oil producers. The last category is very hit and miss if you are searching for a new product – and then when you find it you can’t taste it.

The inability to taste the product is a problem with all internet food sales so the customer generally buys a consistent product they know well from a trusted supplier.

The customers’ behaviour on the internet is little different from their behaviour when street shopping. This is the most important thing to remember when setting up an internet sales operation for your extra virgin olive oil.

Because the customer generally behaves the same way, the basic principles of successful retailing still apply; Place, Product, Price, Promotion and People.

An internet selling website must be about completing the sales transaction, not just advertising the product. Many sites on the internet are like billposters, pictorial advertisements for a product telling a story on a fast moving information superhighway. Billposters are placed in strategic spots with high traffic. Most extra virgin olive oil websites are not – they are lost in cyber suburbia.

The first decision must therefore be ‘where do I place my site?’ The only sensible answer is ‘somewhere where there is already a lot of traffic’. That is, unless you are going to invest a lot of time and money in hosting a sophisticated website.

The options include well-established olive oil oriented websites, or web shopping malls such as eBay. Google and other search engines also have advertising opportunities – at a cost.

Web destinations that feature high on the search engine results are those built to maximize the response from search engine robots that surf the web picking up relevant information on websites. This information includes ‘tagged’ words, links, hits and other indicators of a sites popularity and usefulness.

Using established sites also gets over the problem of having to have your own credit card payment facilities and the consequent risk of credit card fraud. Most hosting platforms offer a secure online selling facility and there are some sites that provide secure internet sales at no charge – believe it or not!

Cyberspace and Shelfspace are Similar when Selling (1)