Segmentation and Private Branding : A Case in the Global Table Olive Industry

The industry of olive and olive oil has a sizeable weight in Andalusia since the ancient times. In the period of Roman Betica, the industry was the economic base of some very influential families in the arena of high politics. Hadrian, the emperor, was born in a wealthy family with interests in the trade of these products. In 2006 the production of table olives in Andalusia was the 23 percent of the world total. This case study was carried out when the company surveyed joined the PIPE program: a collaborative scheme of the Spanish promotion authorities (ICEX) to encourage SME exports. One of the first issues dealt with was the structure of the Spanish olive export. The survey, carried out with data of Estacom, shows the stagnation in the export of bulk olives and the steady growth in the sales of packaged produce. This phenomenon of industrial shift is actually a pattern of the Spanish olive industry. The company business is the assaisonnement and wholesale of bulk processed table olive. This is a commodity global market with very few possibilities of differentiation and growth. In this context, the firm has created a joint venture for the production of packaged produce with a partner who is to provide marketing expertise (food FMMG). In face of the dominant power of the retailing industry, increasingly more concentrated, and the need to overcome high entrance barriers of branding investment, segmentation appears as the only sensible strategy. Taking into account its financial and human resources, the food service channel in Mitteleuropa, with private branding, seems to be the one with better prospects