Agri Business

Tier-II cities fuelling olive oil offtake: Borges India chief

Tomojit Basu New Delhi | Updated on November 25, 2014

Rajneesh Bhasin, MD, Borges India

The edible olive oil market has been growing at 45-50 per cent over the last five years, with cities leading the way.

What is significant, however, is that tier-II markets have been growing faster in the same period with affluent consumers exploring healthier cooking options.

“We’re seeing a lot of traction in tier-II towns and cities with growth doubling year-on-year. At the same time, annual expansion in tier-I cities has varied between 20 to 30 per cent,” said Rajneesh Bhasin, Managing Director, Borges India, one of the major olive oil brands in the country.

“This is happening because Borges has been able to set up infrastructure to cater to 55 cities through direct distribution. The tier-I centres are more mature and there’s greater competition between the big players since they all have distributors based there,” added Bhasin.

Borges, commands a 35-50 per cent share at the moment, said Bhasin, who believes competition will intensify with players such as Del Monte and Cargill India (‘Leonardo’ brand) ramping up distribution and marketing to cash in on the growing demand.

“Borges did have an initial advantage of being the only global player to set up shop here. We invested heavily in category building through above-the-line campaigns and consumer interactions. Others are getting serious now, but it will result in more educated users which will help all of us gain,” he told BusinessLine.

The company’s innovations such as the ‘Extra Light’ (EL) olive oil sub-category, a refined variant, introduced in 2010, had helped it win a considerable consumer share.

“It had all the health benefits minus the fruity taste which we pitched as suitable for Indian cooking. Today, every brand has an EL variant, which they didn’t five years back, and the refined olive oil segment is booming as a result,” he added.

Small market

The domestic market has grown from 1,000 tonnes in 2003 to 12,000 tonnes in 2013, according to estimates by the Indian Olive Association.

For a market that consumes about 12 million tonnes of edible oils, olive oil’s share works out to just 0.1 per cent.

The goal, Bhasin said, was to expand consumption to at least 1 per cent over the next decade.

Shrinking imports

Imports shrunk by 10 per cent in 2013-14 for the first time in three years due to higher global prices caused by a poor crop in Spain and a steep depreciation of the rupee.

India imports olive oil mostly from Spain and Italy.

“It’s a temporary blip and we see double-digit growth in the near future, say, at 25 per cent, which in five years will be about 35,000-40,000 tonnes and a ₹1,000 crore market. Prices are an issue and if they rise at 30-40 per cent, passing them on to consumers won’t help us attract the fence-sitters,” said Bhasin, adding that the company was set for a ₹100 crore turnover in 2015.

Published on November 25, 2014

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor