Interview with Pedro Barato, President of the Interprofessional Organization of Spanish Olive Oil

Pedro Barato: 'We have the capacity to place more than two million tons in the market and we must be prepared for this situation when our production soars'

Pedro Barato: "We have the capacity to place more than two million tons in the market and we must be prepared for this situation when our production soars"

2018/17/05 - At the end of 2018, 10 years have passed since the start of the extension of the regulation by the Interprofessional of Spanish Olive Oil. Today, the model that represents the Organization is applauded, admired and envied in the rest of Europe, having become the best tool for promotion and dissemination of the Olive Oils of Spain, the place where the oil is born. For all these reasons, we wanted to speak with its president, Pedro Barato Triguero (Calzada de Calatrava, Ciudad Real, 1959), head of the Interprofessional since its foundation in 2003 and possessor -among other distinctions of the Grand Cross of the Order to Agrarian, Fishing and Food Merit. Here is an extract from the interview published in Mercacei Magazine 94.

Almost a decade ago took place the implementation of the first extension of the Interprofessional Standard of Spanish Olive Oil. Since then, the Organization has been developing an important task of promoting Made in Spain olive oil, without forgetting the different R&D lines. What is your assessment of this intense period?
You just said it, they have been very intense years, but also exciting. At the time of heading a balance of the achievements of these years I remain, without hesitation, with the most lasting of them, which is having been able to create an organization in which the entire sector feels recognized. For the first time in our history we have achieved what seemed impossible: sitting around a table with olive oil producers, cooperatives, industrial mills, packing companies and exporters, and adopting clear and firm decisions in common that benefit the sector.

The most veteran, will still remember the wars and disagreements that periodically broke out in this sector, mainly between producers and industrials. Today we can say that this time has passed and I am convinced that the work of the Interprofessional has been decisive to achieve the unity of the sector, to reach the conviction that only from that point will we be able to guarantee our future. Of course, that does not mean that each agent in the sector has renounced their legitimate interests, but the degree of interlocution between the parties has never been better. This achievement is what really explains our success.

As for the balance of the work done during these years in the field of promotion, it is difficult to quantify the achievements of the Organization. It is true that sales abroad continue to grow since 2009 with an unusual force. Just remember that two decades ago Spain exceeded for the first time the million tons of olive oil produced. Twenty years later that is precisely the amount we are exporting each year. And what is much more important, the demand of export markets continues to grow strongly despite working at higher prices. I give you an example: in 2009, the average value of exported olive oils was 2.3 euros per kilo; in 2017 we have approached 3.9 euros. Obviously it is not an exclusive achievement of the Interprofessional, also our companies have moved up a gear in these years, but we are convinced that our contribution has been important when positioning the olive oils of Spain around the world. Moreover, it indicates that we have fulfilled the mandate that the sector made us at the beginning of this century when it prompted the birth of the Organization: to sell more but also sel better our olive oil.

At the beginning of its activity different groups of producers and packers understood that the action of the Interprofessional was directed mainly to the defense and promotion of olive oils in general, to the detriment of extra virgin. Do you think that in these 10 years the sector has changed this perception and internalized the role played by the Organization?
First of all, I want to leave one thing clear. We represent the entire olive grove and the national industry of olive oils. See that I'm talking about olive oils. The nuance is important. Our olive groves produce the best extra virgins in the world, but also the most competitive olive oils on the market. And we have to sell every one of them, with the highest possible profitability. I'm going to give you a piece of information that you may not know. In the mid-70s, extra virgin olive oil accounted for 6% of total production in Spain. Now, virgin oils are approaching 50%. And we hope that this figure will continue to increase in the future, which will be a demonstration of the commitment we have made to quality.

That been said, we have organized many actions within our campaigns that have been focused on promoting knowledge and consumption of all commercial categories. While it is true that some of the actions focused more specifically on extra virgin olive oil, for example, the sponsorship of the MasterChef program in France and the United Kingdom back in 2010 or the Beyond Extra Virgin Congress in 2011; the promotion of our flagship, the extra virgin, has an obvious drag effect on the other categories. In the Spanish case, one only has to review the history of consumption statistics to verify that consumption of extra virgin continues to grow, even now that the market for olive oils is weaker in our country. I can say that the entire sector has understood that this strategy is what maximizes the profitability of our olive grove.

We have seen how in recent years olive oils lose strength in the Spanish market in the face the rise of other fats. What is failing in Spain?
In Spain we are paying our laziness. I can not be more clear. For many years we did little or nothing to elevate the culture of olive oils among Spaniards at a time of lifestyle change. Now we are suffering the consequences. A few decades ago, the tradition of the consumption of olive oils passed from parents to children. That, now, does not necessarily have to happen. In addition, we are still teaching consumers to value in a fair measure all that is behind a bottle of olive oil, in terms of health, gastronomic enjoyment, versatility in cooking, even culture. We are seeing that a person who does not value a product in its fair measure is not willing to pay more, when at his side he finds other cheaper oils. It is devastating to see how a part of consumers is only guided by the price. That is the reason why the Interprofessional has not stopped making promotional campaigns in Spain for a single moment since it started. But it is clear that there is still a long way to go.

Beyond the promotion, to what extent has the Interprofessional's work helped to change the structures and know-how of the sector?
If we can boast of something in the Interprofessional is the speed at with which all the information we generate circulates among the sector, which is huge. Everyone knows what we are doing and how. I am convinced, for example, that many companies have decided to take the step to internationalization on horseback of our campaigns. They know that, when they arrive in China or India, they don't start from scratch. We have planted the seed among consumers. I take this opportunity to return to the example I mentioned before about the last European campaign launched in our country. Three years teaching consumers to appreciate monovarietals has surely encouraged many companies to explore this path that has helped us to value the diversity of our offer.

Finally, what challenges or challenges do you consider that are still pending and what are the next objectives of the Organization?
The truth is that our objectives have not changed a bit in these years. Only now we know how to do it much better. We hope that olive oils continue to gain market share in the world. Going from that little more than 1.5% in the global balance of vegetable fats to 3% in the medium term. It is true that we come from very tight campaigns in recent years, but let's not be fooled. We have the capacity to place more than two million tons on the market and we must be prepared for it when our production soars. We must end the abundant campaigns at low prices, boosting the demand, which is the one that undoubtedly commands the markets. We want consumers to value what we are offering them and are willing to pay a fair price. And that applies to India, China or the United States as well as to Spain.

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