The Oleaginous World Order Olive oil production = 100k metric tons
Greece
Production bounced back after a dry year
Italy
Bad weather, a fruit fly, and a disease known as “olive ebola” hurt output
2013-14 2014-15
U.S. imports from Spain and Italy are down more than 50 percent
Spain
Drought ravaged the most recent harvest
2014-15 FIGURES ARE ESTIMATES. DATA: INTERNATIONAL OLIVE COUNCIL
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it’s labeled as such. (A 2011 study by the University of California at Davis Olive Center found that nearly threequarters of top-selling imported brands failed to meet international standards for the extra-virgin designation.) “Italy makes some beautiful olive oils. But they have been riding on the coattails of the Greeks, buying olives from all over the Mediterranean and passing it off as Italian olive oil,” says David Neuman, who heads the North American subsidiary of Athens-based Gaea Products. “This is the moment when Greece can recapture some of that market.” Gaea aims to do just that. Its chief executive officer, Aris Kefalogiannis, the son of a conservative political family y from Crete, started a shipping logisstics company before switching to olive products in the mid-1990s. He says Gaea logs about $14 million in sales annually and expects that to rise to $16 million this year. The company has already made inroads in Germany and is pushing to boost sales in the U.S. In February it hired Neuman, who previously ran Lucini Italia, a Miami-based purveyor of Italian olive oils, vinegars, and pasta sauces. Gaea’s packaging and branding have been revamped, with an emphasis on telling the story of Greece’s traditional methods of making olive oil. The company is also adding more organic oils and packaged olives to its lineup. “Greece has the potential to be the organic grove of Europe,” says Kefalogiannis. In July, Whole Foods Market began
selling Gaea’s oils and olives at many of its stores in the Northeast. “Customers are more interested than ever in tasting new varietals and experimenting with new flavors,” says Dwight Richmond, the company’s global grocery purchasing coordinator. He and others compare olive oils to wines, suggesting that U.S. consumers could create a boom across all price ranges. Gaea is a prime example of the “small-sized but dynamic” companies that Gregory Antoniadis, president of the Greek Olive Oil Packers Association, says are helping elevate the profile of what the poet Homer called “liquid gold.” Other companies include Eleia, Minerva Edible Oils Enterprises, and Agrovim. Antoniadis’s organization saw exports double from 2005 to 2012, and he expects them to double again by 2017. “Greek producers can make some modest gains this year,” says Dan Flynn, executive director of the UC Davis Olive Center. However, to make sustained progress, Greece’s olive oil industry will have to overcome the lingering effects of droughts in 2012 and 2013 that stunted production, fend off the diseases devastating the Italian olive groves, and weather the financial crisis that is making credit scarce. Says Flynn: “One question is whether Greek olive oil can achieve the status of Kalamata olives and Greek yogurt among consumers.” —Paul Glader The bottom line Soaring prices for Italian and Spanish olive oil led to this year’s 28 percent increase in U.S. imports of Greek oil.
E-Commerce E -Co
Going Up Against Big Carnation BloomNation gives florists artistic free rein and lets them set prices “We can tell them that yellow tulips are trending in Southern California”
“This is a slow time of year, but still we’ve been busy anyway,” says Ray Le Du, standing in his Manhattan flower wer shop, Blue Water Flowers, trimming a shipment of tulips just in from the Netherlands. A glass-door cooler by the entrance is filled with velvety red charm peonies—a best-seller even at $12 12
a stem, says the florist, who almost lost his business during the recession when law firms, hotels, and other big clients stopped calling. Le Du credits the uptick in orders to BloomNation, an online marketplace where customers can order arrangements from a network of independent florists. Shops such as Blue Water pay BloomNation a 10 percent fee for every sale. In exchange, BloomNation builds a store within its own website for each florist, dispatching a photographer to florist take pictures of sample arrangeta ments. It also gives businesses tools to collect and analyze their sales data, including contact and sa order information for past customers. BloomNation’s 10 percent cut is less than half what 1-800-Flowers.com, Teleflora, and FTD charge florists to process orders through their websites and call centers. These so-called wire services dominate the cut flower business, which has annual sales in the $7 billion to $8 billion range, according to the U.S. Bureau of Economic Analysis. Like fast-food franchises, Teleflora and 1-800Flowers.com offer a standard menu of arrangements and require florists to sign contracts ts that commit them to buy certain types of flowers and vases and use design templates to build bouquets. BloomNation’s founders, Farbod Shoraka, David Daneshgar, and Gregg Weisstein, set out to create a different kind of e-commerce platform when they started the business in 2011—“an Etsy for flowers,” in Shoraka’s words. A University of California at Berkeley grad with an undergraduate degree in economics, Shoraka watched his aunt struggle to keep her flower shop open during the downturn. With a growing number of phone apps that allowed people to get just about anything delivered to their home direct from the source, he was surprised there wasn’t already an equivalent service for the floral industry. “I could see there was something there to be optimized,” he says. Daneshgar, a 2008 World Series of champion, put up $30,000 of Poker cham his take plus plu some seed money he won for startups at the in a competition compe University of Chicago Booth School of Business, Busine where he was getting his MBA. MBA To test their concept, the trio set s up a Facebook page and asked prospective vendors to ask upload photos of their floral u
BLOOMNATION: JAN LIM; FLOWERS: ALAMY (14)
Focus On/Small Business
