Ricardo Migueláñez. Agricultural Engineer
Wiki Spanish Food- The current economic situation is leaving its mark on all productive sectors. How is it affecting DO Estepa?
José Mª Loring- Our product, extra virgin olive oil, is quite stable in terms of sales. We've seen a notable upswing, especially from the foreign market, where we are working to introduce and position our DO brands.
It's also very important to note the slide in olive oil prices in the last four years. This is a crucial factor, together with the global economic crisis, insofar as it affects our sector, which has deteriorated tremendously. Moreover, as a result of distribution not adequately valuing our product and the still-high lack of awareness among consumers, we, like much of the agricultural sector, are suffering from not only a very adverse economic situation, but also from a series of long-lasting structural problems caused by the sector's lack of profitability which must be addressed.
W.S.F.- What are companies in DO Estepa doing to enhance their competitiveness and enter new markets?
J.M.L.- We are proud to say that our PDO Estepa companies have already done most of their homework. They are pioneers in concentration, marketing, and in implementing quality control and traceability systems, working with the most modern laboratories and qualified staff. Our olive oil producers are well trained, to the extent that we could say, as of this year, 100% of production uses quality control systems. All of our olives groves are under the DO and involved in Integrated Production. It's also worth noting that PDO Estepa is the most demanding designation in the European Union when it comes to classifying an extra virgin olive oil as DO.
Moreover, our protected brands, primarily Oleoestepa, are investing heavily to strengthen international sales departments, and assigning skilled personnel to undertake this important matter.
W.S.F.- What do you believe are the issues that Spanish agro-industries, and your sector in particular, have to address?
J.M.L.- Firstly, the olive sector needs to modernize. It must shift from the predominantly traditional olive growing system to one that is environmentally-friendly but economically efficient, specifically, intensive farming models under the Integrated Production system.
Secondly, and although our territory did its homework back in the day through concentration that adapted to our needs and to those of our product, concentration of production is important, as is the creation of more groups that can professionalize it in some way.
Thirdly, it's very important to promote and raise awareness about the exceptional qualities of our extra virgin olive oil, which, as we often say in Estepa, is as familiar as it is unfamiliar.
W.S.F.- What is the current state of the olive oil market and what will be the medium- and long-term trends?
J.M.L.- The industry's main problem is poor market regulation, which is driving the current trend: a strong boost in oil prices due to the shortfall of oil. Moreover, according to the experts, the next harvest will also be small, with the result that the price increase is very important.
This volatility, which trends upward when the harvest is small and downward when it is abundant, is sinking the productive sector economy. We need to consider measures in connection with strategic storage.
As for the short- and long-term, it's very hard to predict. The sector has multiple variables and elements which distort normal functioning. There are significant new plantations, new contributions in connection with the tariff contingent approved by the EU for Morocco that could determine oil prices, a new CAP being negotiated, a brutal crisis affecting consumer spending—in short, there are many destabilizing factors.
However, at the same time we have incipient foreign demand for the best fat in the world, extra virgin olive oil. Moreover, we account for such a small portion (3%) of global vegetable fat consumption that any action which leads to an increase could enhance the sector's viability.
W.S.F.- How would you describe consumer trends in your industry?
J.M.L.- Fortunately, extra virgin olive oil with a Designation of Origin label has a very loyal following. On the one hand we have the productive sector, our greatest ambassador, which continuously connects us with new consumers. And on the other we have the market. Despite the current lack of awareness, the market knows the quality and security offered by brands under PDO Estepa and, therefore, consumers are quite loyal.
W.S.F.- As regards the promotion of oil mills under PDO Estepa, what types of actions are planned for the rest of 2013?
J.M.L.- We are going to be on gastronomic TV shows, and we will continue developing our Oil School, with innumerable tastings and conferences scheduled. In view of the importance of social media, we will be rolling out merchandising campaigns. We also recently launched training sessions as part of the 1st Chair of Olive Growing.
W.S.F.- What portion of total sales from DO Estepa companies do exports account for? What actions have been, and will be, implemented in this regard?
J.M.L.- In total, 45% of sales are exports. The main objective is to increase that figure by diversifying customers and markets, especially for bottled olive oil.
W.S.F.- What are you doing to address emerging markets such as China and India, where oil imports are expanding notably?
J.M.L.- We are joining forces with distributors to help them understand PDO products and extra virgin olive oil, registering the brand to avoid falsifications and creating synergies with various distributors to strengthen the new market.