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Stable growth of Olive Oil Consumption in Panama

Stable growth of Olive Oil Consumption in Panama

2018/27/11 - The consumption of olive oil in Panama shows a stable growth perspective in the period 2018/2019 and is also aligned with its GDP, favored by the increase in wages, the growing concentration of the population in Panama City and the takeoff of tourism. However, the strengthening of the euro forecast between 2019 and 2022 may make EU exports less competitive and affect Panamanian imports of olive oil, according to a study by ICEX Spain Export and Investment.
The Panamanian olive oil market is characterized by its small size (population of 4 million inhabitants) and geographic concentration in Panama City (1.6 million). Sustained economic growth, the strength of private consumption -supported by substantial biannual increases in the minimum wage- and the appreciation of the US dollar, especially between 2015 and 2017, have been the main drivers of the consumption of olive oil.

According to the ICEX study, in Panama, olive oil is used exclusively as a culinary ingredient, mostly as a salad dressing. Due to its high price, it is not usually used for frying nor does it have much use in confectionery, sauces, marinated or marinated masses. The oil used for frying is usually of vegetable origin and economic price, highlighting the soybean (Argentine origin) and followed by sunflower oil (North American origin).

In general, there is a wide ignorance about the category of olive oil product, its organoleptic and nutritional properties, possible gastronomic uses, method of elaboration and countries of origin of the product, etc. The deciding factor for the purchase of olive oil is the price, constituting a relevant barrier to increase its level of consumption, since, according to this report, it is an imported product and expensive for the average consumer.

The brand, to a lesser extent, also plays an important role in the purchase decision, the best known being those that have been on the market the longest and have built a differentiated image.

As for the promotion of olive oil, it is carried out mainly through tastings at point of sale (supermarkets), discounts on PVP or promotional packs with another product (for example, olives or vinegar).

Being an expensive product, elitist and aimed at the segment of population with greater purchasing power, its offer is concentrated in products of the virgin and extra virgin category.

According to ICEX, although the origin of the product is not relevant when making the purchasing decision, 74% of the virgin olive oil and 77% of the refined oil imported by Panama come from Spain.

In their opinion, the change in trend towards healthier consumption habits linked to promotional campaigns by some brands leads to a slight increase in consumption in the coming years.

At the same time, the concentration of food distribution in the hands of a few companies will continue to present enormous barriers to entering the market for new olive oil producers and brands.
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