Oils 2024: soaring price of oil scares off shoppers

Once an affordable staple, cooking oil is now a hefty purchase. Prices have rocketed as the result of tightened supplies across Europe in the past year.

Olive oil has endured a particularly torrid time. “Climate change has been a major influence in the price of olive oils, with the largest oil-producing nations – Spain, Italy and Greece – all seeing olive groves dry up, which is creating a shortage in supply,” explains NIQ analyst Natasha Suttner.

As such, an average litre of edible oil is 38.8% costlier in grocery. That’s driven a £114.7m gain but also scared away shoppers. Volumes are down 13.2%, or 29.7 million litres.

Branded oils have taken the biggest hit. Their volumes are down 25.4%. “The brands that are seeing the biggest volume decline arguably all have higher price points, thus showing the effect price has had on the key players within this category,” says Suttner.

Given that price sensitivity, it’s little surprise that the five brands in the top 10 to suffer double-digit declines are all olive oil.

The worst hit is category leader Filippo Berio. It’s shed volumes the fastest at 28.8%. That’s 1.9 million fewer litres through tills, while average price is up 56.2%.

Walter Zanre, CEO of Filippo Berio UK, acknowledges “recent market trends have presented challenges to this category. This has resulted in a decline in household penetration as shoppers seek alternative, more affordable options.”

The brand is hoping to revitalise shopper interest with a multichannel campaign that kicked off in December to “support not only the brand but also the broader category”.

Less in need of support are cheaper vegetable oil brands. In the wake of olive oil’s woes, they have “seen big increases in both value and volume”, says Suttner. “This could be due to consumers getting more product for their money with their larger pack sizes.”

Certainly, KTC, Crisp ‘n Dry and Flora – all of which come in bottles of one litre and bigger – are in great shape. They’ve shifted an extra 11.4 million litres between them, and added a total of £8.3m.

“The past year has been positive for Crisp ‘n Dry, with significant growth in sales and market penetration, and marketing efforts were well received by consumers,” according to Jeremy Gibson, MD for owner Princes. There was “an increasing demand for versatile cooking oils that can be incorporated into a wide variety of dishes”.

Still, those brands don’t have it all their own way. They have one big challenge of their own: private label. Its volume decline of 5.6% is way behind the market average. No doubt its cheaper lines played a key role in this relative success.

Read more: Oils 2023: Brands ride out massive price rises