Oils 2022: Supply issues disrupt oil brand sales

The war in Ukraine took a heavy toll on edible oil brands this year, with a consequent shortage of sunflower oil leading to supply issues in UK supermarkets in the spring.

With the cost of the oil rising – peaking in March at over $3k (£2.5k) a tonne – and suppliers struggling to meet demand, many brands increased prices and put the brakes on promotional activity, driving a 14.9% rise in average price per litre for brands, and prompting consumers to switch to own label alternatives (which have grown volume sales by 8%).

Dwindling stocks also saw retailers limit number of packs per purchase, notes NielsenIQ client manager Jason Wootton.

This contributed to a 13.6% dive in volumes for oil brands, and similarly large declines for several of the category’s big names.

None more so than second-placed KTC, of course, which sold 6.8 million fewer litres year on year, as supply was temporarily halted due to the war.

Crisp ‘n Dry in the number three slot also suffered. Volumes are down 27%. In a bid to reverse that decline, owner Edible Oils is now focusing on value-led promotions and has been supporting Crisp ‘n Dry with a TV campaign in the run-up to Christmas.

Beyond supply and price difficulties, oil suppliers have other issues to address. One is the post-pandemic landscape. Brands have seen a drop in demand since the end of restrictions meant fewer meals prepared at home. Still, some are sanguine about it.

Filippo Berio MD Walter Zanre, for instance, admits olive oil sales are “still coming down from the Covid highs” – as illustrated by the brand’s 13.1% decline in volumes.

“But despite the reductions, we’re still much higher than in 2019 and we think that, when it all settles down, the olive oil category will be 10% bigger than pre-Covid,” he adds.

Napolina brand marketing director Jeremy Gibson is equally bullish. That’s despite the Princes Foods brand losing almost a third of volumes in the period covered by this report, after being delisted in May 2021 by Asda.

“This decision proved detrimental to the retailer’s category, with all Napolina olive oil SKUs recently relisted across most of the estate in August 2022,” he says.

Napolina’s sister brand Pura has experienced no such problems this past year. In fact, it’s gone well and truly against the category grain, after securing new listings in Tesco, Morrisons and Asda. It’s worth an extra £11.3m as a result of shifting 7.9 million more litres.

“Pura over-indexes with a younger cooking oil shopper,” says Princes commercial director for oils Kim Matthews. Plus, the brand “works well in conjunction with own label as part of a portfolio approach to broaden category access and appeal”.