NEAR EAST OLIVE PRODUCTS

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SYRIAN CONSUMER BEHAVIORSYRIAN CONSUMER BEHAVIOR

IMPORTANCE OF OLIVES & OLIVE OIL IN THE SYRIAN DIETIntro

• 3’000 years of cultural significance

U d b 100% f th l ti• Used by 100% of the population

• Estimated consumption per capita is per year:

5 5k f li• 5.5kg of olives per person

• 5kg of olive oil per person

NEAR EAST OLIVE PRODUCTS COMPANY PRESENTATION

IMPORTANCE OF OLIVES & OLIVE OIL IN THE SYRIAN DIETIntro

• Olive consumption habit:

• Especially at breakfast

I h• In mezzeh

• As topping (pizza, savory pastries, etc.)

Oli il i h bi• Olive oil consumption habit:

• Mainly used upon mezzeh or breakfast spread

• Preservation of food

• Cooking

OLIVE OIL VS. EDIBLE OILSIntro

Type of oil Qty per year Main usageType of oil Qty per year Main usage

Soybean oil ~ 110’000 MT Frying

Palm oil ~ 70’000 MT Ghee

Cotton oil ~ 70’000 MT Frying

Sunflower oil ~ 90’000 Frying, Cooking, saladsalad

OLIVE OIL ~ 110’000 MT Mezzah, Preservation,

kicooking

OLIVE OIL VS. EDIBLE OILSIntro

Consumption

24%24%

Soybean oilSoybean oil

Cottlon oil

Sunflower oil

16%16%

Palm oil

Olive oil

SEGMENTATIONThe Consumer

Rural UrbanPopulation Population

+50 years old 30 to 49 ld50 years old years old

RURAL POPULATIONThe Consumer

• Most of rural population produces own olive oil

• Production self sufficient for their consumption

• Any excess production sold in market

• Price defined according to acidity

• Taste not a criteria of quality

URBAN POPULATIONThe Consumer

• Study segmentation:

• + 50 years old vs. younger generation

M i diff i th d f h• Main difference is method of purchase

• Older generation still accustomed to annual storage. Choose to buy whole year consumption during the season in 16kg tinsconsumption during the season in 16kg tins.

• Purchase habit changing with younger generation:

Li it d h i• Limited purchasing power

• New houses smaller hence a lack of storage space

• Impractical usage of 16kg tins (prefer smaller packaging)

• Nevertheless, expectations and usage of product remains the same among whole Syrian population

QUALITYBehavior

• Three main types available in the market:

• Extra virgin olive oil

• Virgin olive oilg

• Ordinary olive oil (still permitted in Syria)

• No market for pure or pomace olive oilp p

• Consumer not concerned with the type

• Prefer sweet tasting olive oil

• Consumer misconception that good olive oil is greenConsumer misconception that good olive oil is green

PACKAGINGBehavior

• Rural population:

• More than 95% sold in 16kg tins

• Urban population:

• Consumers above 50 mainly buy 16kg tins

Y i d b ll k i• Younger generation tends to buy smaller packaging.

• Most popular size after 16kg is 5lt and 4lt.

• 5lt and 4lt are mainly sold in PET rather than tins

• Consumers prefer seeing product

• Cheaper than tins

• In volume, sales of glass bottles are marginal

RECURRING OLIVE OIL PURCHASES (PER CAPITA)Behavior

• Rural population:

• Acquired once a year during the season

• Urban population:

• 63% purchase annually

16% h bi ll• 16% purchase bi‐annually

• 10% purchase quarterly

• 9% purchase monthly

WHO IS THE DECISION MAKER?Behavior

• Rural population decision maker:

• Male of the household

• Urban population decision maker:

• 62% of purchases done by male of the household

22% f h d b h if• 22% of purchases done by housewife

• 16% is done by other family members

PRICE EFFECTBehavior

Press Selling Price

Price to consumer

3.00 USD / kg

Price to professional

2.76 USD / kg

Selling Price Wholesale

3.24 USD/kg

Factory

3.50 to 5.22 USD / kg

Retail Selling Price

Distributor

4.10 to 6.14 USD / kg

Consumer Selling Price

USD / kg

Retail

4.60 to 7.00

Selling Price USD / kg

PRICE EFFECTBehavior

• Syrian market extremely price sensitive

A• As a consequence:

• 84% of sales still done in 16kg tins

• 84% sold outside of retail sector

P l f b bi i h h b l d S i i d• People prefer to buy big sizes rather than bottles due to Syrian mindset getting more value for their money

MARKET SHARE PER SEGMENTSales

Channels

24%16%

Wholesale

Retail

OtherOther

DIRECTLY FROM THE PRESSSales

Channels

• Consumers purchase annually at the press

All l i 16k ti• All sales in 16kg tins

• Three main motivators:

M ff i h d f i i d• Most cost effective method of acquiring product

• Guaranteed no mixing of oils

• Annual storage habit

WHOLESALESales

Channels

• Wholesale includes direct delivery to consumer

Wh l l ll d t ith i i i l f k it d b d• Wholesaler resells product either in original form, or repacks it under own brand (in 16kg tins or 5lt PET)

• Consumer motivators:• Consumer motivators:

• Better prices than retail market

• Trustworthy link due to personal relationship developed over the years to acquire productacquire product

RETAILSales

Channels

• Smallest segment due to:

• High availability to anyone outside retail market

St i diff i i t th h l• Steep price difference in comparison to other channels

• Offers all sizes ranging from 250ml to 16kg tins. Nevertheless, most outlets will carry 2 brands and 2 3 sizes per brand (excluding key accounts which have morecarry 2 brands and 2 ‐ 3 sizes per brand (excluding key accounts which have more selection)

• Consumer motivators:• Consumer motivators:

• Easy access

• Cleanliness

DEVELOPMENT OF SALES CHANNELSSales

Channels

• Drastic change in method of purchase expected in upcoming 10 years:

St t d t d ll k i• Strong trend towards smaller packaging

• More practical

• Purchase power problem

• Purchasing power will continue to decrease

• Cost of living always more expensive

• Increase in salary not enough

• Unemployment problem

• New regulations will make it harder for wholesalers to sell own olive oil

• Not allowed to sell white tins in the market

• New regulations for customer protection will be issued.

DEVELOPMENT OF SALES CHANNELSSales

Channels

• Development of the retail sector

Still t th b i i f th d• Still at the beginning of the road…

• Modern trade will take over on wholesale

• Decrease in small shops

C j h h i i• Consumer enjoy the shopping experience

Thank You.

NEAR EAST OLIVE PRODUCTS

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