Olive Oil Franchisers Tapping U.S. Foodies For Growth

Specialty Food Sector
Research shows sales of consumer goods in general have remained flat over the past two years, but the gourmet gift category increased by double digits. Americans' surging interest in cooking shows, identifying with celebrity chefs and the products they use has likely helped this trend as well, Stermer says.

Sales of specialty foods from 2009 to 2011 rose 19.1%, currently topping $75 billion, and compared with all food sales growth of 5.1%, according to The National Association for the Specialty Food Trade .

Specialty foods represent just shy of 14% of all retail food sales. Eight years ago that number was significantly less, says Ron Tanner, vice president of communications at NASFT.

It's not only the expansion of products, but increased visibility of specialty goods at venues like Bed, Bath and Beyond(BBB) , Target(TGT) , and even supermarkets that are trying to upscale their selection of products that makes for greater demand, Tanner says.

"There are a lot of companies that are really seeing great potential in going into the industry. You have companies like Whole Foods(WFM) and Traders Joe's, small specialty food stores that are beginning to open up second and third locations, and you have a lot of creative entrepreneurs who are opening specialty food shops," Tanner says.

Olive oil is the third most purchased category for specialty foods behind chocolate and coffee, he says.

Oil & Vinegar is not the first to come to the U.S. with the idea of selling gourmet oils and vinegars. Indeed, it's an up and coming sub-sector of the gourmet food industry. Names like Oliovera of Los Angeles and Oilerie of Fish Creek, Wisc., have also figured out how to franchise a store that sells olive oil.

And one way to keep the costs down for owners is having them buy product in bulk and not pay for all the added necessities -- like labeling and bottling, Tanner says.

Typically, "the cost of the oil in that bottle is not the main cost of what you're paying for. By buying in bulk, it takes all that added cost away. From the consumer's view, they're getting a better product at a lower price," he says.