Respondents report being primarily dedicated to the marketing and communication activities of their products, well ahead of activities related to operations and quality control.
The difficulties they face are market related: Excess supply and competition, low prices, pressure from the distribution channel, poor loyalty, ignorance of the nature of the product and confusion about varieties. But also, of an internal nature: Lack of technical and economic resources, bureaucracy, lack of transparency and professionalism. And their commercial objectives are to be achieved by improving communication about the brand identity and product quality and fighting against fraud. The information collected confirms the usefulness of the digital seals registered in Blockchain and developed by BlockTac to respond to the needs of companies in the industry.
This survey, developed in the context of the proposal submitted to the H2020 program of the European Commission, was aimed at identifying the most significant activities of managers in companies of the olive oil industry in Spain, to know the most outstanding difficulties that they face in the development of their work, and the objectives that govern their performance and that they intend to achieve to ensure their viability and consolidation.
The survey was designed with a qualitative character and included the following questions:
The survey was distributed among 967 professionals in the sector. These recipients were identified through social networks and directories of companies in the sector. It was distributed during the months of June, July and August of 2019, and the reception of responses was closed on August 30. 91 valid responses have been received, representing 9.4% of the total.
Next, the responses received to each of the questions are described synthetically and after their classification.
The responses received are grouped into three areas of activity, sorted by frequency order: commercial management, communication and operations. Being open-ended questions, the description of the tasks is formulated in a diverse manner, but they are summarized as follows:
The difficulties they face can be grouped into two main areas: external and internal, with a notable predominance of the former. Those described as “external” correspond to characteristics or circumstances of the market, while the “internal” ones refer to organizational aspects of the company or organization of the industry to which it belongs.
Difficulties of an external nature:
The answers to this question have been grouped into four areas: Increase in sales; improvement of communication about brand identity and product quality; customer loyalty; and fighting fraud.
Loyalty to customers.
Fight against fraud.
C1. In general
Interest in the survey can be considered satisfactory by obtaining a percentage of responses of 9.4%. One might think that responses will be largely biased by the type of professionals most accessible and visible in contact networks. However, the survey was aimed at professionals with all kinds of managerial responsibilities within companies and not managers of a specific function.
Its objective was to obtain concrete and direct information on the main concerns of professionals in the olive oil industry. This should be useful for us to corroborate or rule out the convenience of the initiative presented to the H2020 program in relation to an application of Blockchain technology in that industry.
The technological innovation developed by BlockTac is initially oriented towards the accreditation of the authenticity of the product, although it also incorporates several marketing and communication features. Its relevance and justification to third parties and institutions would be conditioned to a large extent by the answers provided by these professionals.
C2. Discussion of the answers
The answers to the first question help identify the profile of the participants in the survey and show that the vast majority are involved in the promotion and sale of olive oil. Indirectly they are a reflection of the tasks that the industry considers most important. It seems to be accepted that the availability of the offer and the quality of the product are well established. However, the need to make it known for the true value it has and to bring it to the greatest number of customers and markets is something that represents a challenge because it is what occupies the activities of most of the professionals surveyed.
On the one hand, commercial activities are not surprising and are usual in any industry, related to the search for customers in different markets, national and international, in competition with other companies, and having to pay attention to sales prices. This anticipates a probable consideration of the oil as a generic product, at least in the eyes of consumers.
On the other hand, we appreciate the interest and dedication of professionals to educate that same consumers to make them notice the most valuable and unique characteristics of that product, so that they consider it more valuable and justify a higher and more stable demand, with higher prices.
The activities of quality assurance and logistics management are normal companions to make this product reach consumers in appropriate conditions which correspond to the quality image that is intended to be achieved for extra virgin olive oil.
All the aforementioned activities must be carried out in the face of certain difficulties that are described in the answers to the second question. These difficulties are grouped into two areas that we have called external and internal, the former being the most abundant.
All external difficulties correspond to the consideration in the markets that oil is a generic product, at least as regards Spanish olive oil. Regardless of the real consideration that not all olive oils are the same thing and the existence of a highly valuable product such as extra virgin olive oil, the market seems to respond to the generic supply excess with a low-price requirement. And this circumstance is aggravated by the pressure of a distribution channel concentrated in a few chains that wants to offer the product to the largest possible number of points of sale, with a purchasing power that reinforces down the pressure on prices.
The ignorance or confusion on the part of the consumer of the true nature of the product, of the differences in quality between the different varieties and types as a result of their production processes, does not contribute to improve the situation
To all of the above, internal difficulties are added. The lack of technical and economic resources is conditioned by an industry in which the added value is low. This circumstance seems to favor some unprofessional behaviors that seek to take advantage of that consumer confusion to handle the product designation, that is offered unclearly.
The answers to the third question help to understand the specific objectives that the surveyed professionals intend to achieve, which, of course, are fundamentally included in the marketing and communication activities. Among them, we highlight the desire to increase sales and revenues, seeking to reach more customers and new markets through new marketing platforms. This is expected to access a demand that values access to a product that considers the quality and that justifies a higher price.
To ensure that this type of demand growth, communication is sought to improve, providing more information on the characteristics and properties of olive oil in its most qualified version, the extra virgin, and promoting it among prescribers and directly through social networks. This must be accompanied by a reinforcement of the brand identity that is consistent with these new expectations and capable of justifying a higher price.
The concrete way to improve this commercialization focuses on improving customer loyalty, on the one hand, through better management of direct and personal relationships with them, and on the other, on establishing partnerships with the distribution channel that shares the same objectives of the higher valuation of the product offered.
The above objectives must be accompanied by a determined fight against fraud, its existence being veiledly recognized, and partly supported by regulations that do not help clarity and transparency. This is because the product classification is based on some physicochemical criteria that can be manipulated by less responsible producers. Hence the need to request a more important role for the tastings and careful analytics to determine the different categories for olive oil.
Something well known in the olive oil sector is confirmed in this survey: that one of the most important problems is its commercialization. Due to the atomization of production, and the effort of the industry in production and quality, those factors result in a large offer of olive oil and a high-quality product. However, the poor preparation of producers in promotion and marketing results in the product ending up being sold below its cost, and in bulk to other countries such as Italy.
It is evident the difficulty to undertake, in a coordinated way, fundamental objectives for all the agents of the production chain, such as the promotion of consumption, an essential goal given the increase and improvement of production, and to advance positions in foreign markets.
Finally, the consumer ignorance about the different olive oils is damaging for the producers. However, it can be positive for companies with a more established brand identity.
The introduction of a technological innovation such as the one developed by BlockTac through the use of Blockchain records for product information responds effectively and efficiently to the needs expressed by the sector.
Open new markets. ✔
Increase in consumption and prices. ✔
Customer diversification. ✔
New marketing platforms. ✔
More information about the product and its properties to consumers. ✔
Better positioning and brand identity. ✔
Promotion between prescribers and social networks. ✔
Database management. ✔
Alliances with the distribution channel. ✔
Value the tasting and analytical results. ✔
Digital certificates and seals, incorporated into olive oil product units, are a very valuable tool from diverse points of view.
On the one hand, single-use digital seals are an effective way to fight counterfeiting and fraud. By uniquely identifying each unit of product and the uselessness of its copy due to the unique registration in Blockchain, it also generates extraordinary additional functionalities in marketing and communication to consumers. These functionalities respond in a concrete and appropriate way to the needs described by the professionals of the industry in relation to customer information and loyalty.
In this way, Blockchain technology, applied in the form of the products and services developed by BlockTac, can contribute to the improvement of added value in the commercialization of extra virgin olive oil, while providing more information and assurance to the consumers.