Market Channels and Logistics
Olive oil can be distributed through different market channels, each with specific characteristics, opportunities, and criticalities, depending on the type of product and the target audience. One of the main channels is large-scale distribution (GDO), i.e., supermarkets and hypermarkets. This is the go-to for most consumers, thanks to the convenience of purchase, competitive prices, and wide selection available on the shelves. However, in this context, olive oil is often subject to strong price competition, which can put small producers in difficulty and reduce the profit margin. In some cases, there is also a risk of standardization of the product, to the detriment of perceived quality.
Alongside large-scale distribution, an increasingly important role is played by the specialized channel, which includes gourmet shops, shops selling typical products, and organic stores. Here the consumer is generally more attentive to origin, quality and sustainability, and is willing to pay a higher price in exchange for guarantees and transparency. This channel lends itself particularly well to the enhancement of high-end extra virgin olive oils, often linked to local productions or protected designations of origin.
In recent years, the online channel has also gained great importance, both through specialized e-commerce and through the manufacturers' company websites. This method allows us to reach a wide and geographically distant clientele, offering the opportunity to tell the story of the product, the territory of origin and the production process. In addition, direct online sales allow producers to have a more direct relationship with the end consumer, reducing intermediate steps.
Another strategic channel is the Horeca (Hotellerie-Restaurant-Café) channel, i.e. the catering and hospitality sector. The oil used in cooking or served at the table in restaurants can be an important showcase for companies, especially if they are quality oils. It is also an opportunity to educate the consumer about the taste and culture of extra virgin olive oil.
Finally, there is the direct channel, which includes sales on farms, in farmers' markets or during food and wine fairs and events. This approach allows for authentic contact between producer and consumer, strengthening trust and enhancing the link with the territory.
Challenges in Retail
The retail sale of organic EVO oil comes up against several critical issues. Firstly, international competition is increasingly pressing: countries such as Tunisia and Spain, with large-scale production and lower production costs, are able to place products on the market at very competitive prices. This phenomenon contributes to lowering the perceived price of Italian organic oil, putting small producers in particular who do not benefit from economies of scale.
A further obstacle is represented by climate volatility, which significantly affects both production yield and product quality. Extreme events such as drought, frost or parasitic attacks can compromise entire campaigns, with repercussions also on costs and continuity of supply.
The market price varies significantly depending on the distribution channel. In the industrial supply chain, particularly in the Italian large-scale retail trade, the average price is around 9.8 euros per litre. On the contrary, in direct sales through mills or through the short supply chain, prices of more than 15 euros per liter can be reached, especially for high quality oils or oils with a protected designation of origin (PDO), which meet a more attentive demand and willing to recognize an added value to the product.
Another central problem is that of counterfeiting and misleading practices, such as the sale of oils that are not pure or not really extra virgin, which damage the image of the Italian product and disorient the consumer. These phenomena not only compromise public trust, but devalue the work of olive growers who operate in compliance with regulations and quality.
In this scenario, it is essential to raise consumer awareness of the importance of recognizing authentic and quality olive oil. Through clear labels, traceability of the supply chain, PDO and PGI certifications and food education campaigns, we can help the buyer make informed choices. Buying genuine oil means supporting the territory, protecting health and rewarding the transparency and sustainability of production.
Image : Olive oil poured into a container source: trend.online.com (n.d.)
Sustainability in Logistics
The logistical aspect and environmental sustainability emerge as strategic elements for the future of the entire organic extra virgin olive oil supply chain. Direct sales and the short supply chain, in particular, offer significant advantages in terms of traceability, reduction of emissions related to transport and simplification of intermediate steps. This model allows not only greater transparency for the end consumer, but also a lower overall ecological footprint.
Small organic farms, especially in southern Italy, represent virtuous examples of sustainable agricultural practices: many adopt cultivation techniques with low environmental impact, reduce the use of chemical inputs, enhance local biodiversity and operate in compliance with the natural rhythms of the soil and crops. However, these companies often have to deal with logistical criticalities, due to infrastructural deficiencies and the lack of economies of scale in warehouse and transport management.
An increasingly important aspect concerns the sustainability of the finished product, which extends far beyond the agricultural phase. Several companies are introducing eco-friendly packaging, such as Tetra Pak and Bag-in-Box, which are lighter and more recyclable alternatives to traditional glass bottles. In addition to reducing weight and bulk in transport, these materials ensure good product preservation and a lower environmental impact, especially in terms of logistics-related CO₂ emissions.
Additional virtuous practices include the use of biodegradable labels, plant-based inks, compostable caps and packaging made from recycled or FSC-certified materials. Some companies also adopt production systems powered by renewable sources, invest in emission compensation processes and promote circular economy projects, such as the reuse of olive processing residues to produce energy or agricultural compost.
Looking ahead, the strengthening of local logistics networks, the integration of agriculture, processing and distribution and the adoption of sustainable solutions along all stages of the supply chain could represent fundamental strategic levers to improve the competitiveness of the sector. These actions not only respond to consumers' growing expectations in terms of sustainability, but also strengthen the identity and added value of Italian organic EVO oil on international markets.