The initial event in the development of a Nelson olive oil brand was a series of BIZ sponsored meetings in 2000. The programme offered free advice to people setting up in business, and for a group of local olive growers the time was used collectively. As a result of the seminars it quickly became apparent that processing and marketing would become critical issues. The ultimate result was the formation of the marketing company Nelson Olives Limited (NOL).
NOL later applied to MAF for a Sustainable Farming Grant to help launch a brand and label for its oil, subsequently a $10,000 grant was awarded. Growers met to discuss future plans and eventually three growers took the lead developing a business plan, with seventeen growers making a small financial commitment to cover the cost of forming a company and working through specific objectives and evaluating issues raised.
Two companies were formed in March 2001, a processing company with significant assets, and a separate marketing company to negate issues of liability. Olive Services Nelson Limited (OSNL) is the services company with a press and bottling plant open to all growers but with a preference for shareholders. The marketing company, NOL is essentially a trading entity responsible for purchasing oil, developing a brand and then marketing the oil to domestic and international markets. NOL's shareholder growers own 75% of the olive trees in Nelson- about 35,000 trees.
NOL has made good progress with market research in NZ, Singapore, New York and London, undertaken in close co-operation with Trade NZ. A potential for growth exists in the UK where per capita consumption is only a quarter of a litre a year. The first label 'Mahana' has been reserved for shareholders only, with a new second label covering other oils developed recently.
Surveys carried out in 2000 determined the size and varieties planted in all known groves, and what concerns growers had. Analysis showed a total then of 37,000, with a further 5,000 planted in 2001 and just over 2,000 so far this year. Two varieties showing a strong preference are the Italian Frantoio and Leccino. By 2003 most groves will be 4 years or older with an expected rapid increase in oil production.
A distribution network is being put together to explore export opportunities. From the outset it was clear that high domestic prices could not be sustained and the bulk would need to be exported. As increased production comes on stream, domestic prices will fall to a level that may match returns from export markets.
For the NZ market the focus is on sales to consumer groups who recognise the different types of oil & will use extra virgin for dressings, with flavour, health issues and price determining factors. With a few key established distributors for the up-market high priced retail sector where extra virgin olive oil compliments their existing range. BIZ Nelson recently provided NOL with some further consulting time recommending the following strategy. " Gather basic data on the New Zealand market, develop a database of product information, develop a product positioning strategy, undertake market research and spend time on market development."
Thanks to John Taylor of NOL for information provided in this article.
