Filippo Berio USA’s new CEO sets aggressive growth strategy for olive oil focused on westward expansion, diversified consumers

For the past year, Kaljevic worked closely as the deputy CEO of Marco de Ceglie, who led Filippo Berio USA as CEO for the past seven years, to ensure a “seamless transition” of the business and set the foundation for what he hopes will be an explosive year of growth for the US subsidiary of Lucca, Italy-based Salov Group.

“Salov Group is the biggest Italian bottler of olive oil and the fifth largest in the world, and the American business ​[is the largest for the group, representing] about 25% of our global turnover,”​ and while it has expanded its portfolio, market share and sales under de Ceglie it sill has significant room to grow, Kaljevic told FoodNavigator-USA.

He explained that he plans to seize this potential, despite significant headwinds including inflation, by expanding the company’s distribution beyond its stronghold in the Northeast across the US, increasing household penetration through retailer and consumer education and innovation and broadening its consumer base by appealing to more diverse shoppers.

‘Expanding … in the West is our key priority’​

Even though Filippo Berio USA was registered more than a century ago in 1896 – just three years after The Coca-Cola Co – its business is primarily concentrated in the Northeast, where Kaljevic notes it has captured 30% of market share.

“Because of our strong attachment to the Northeast, let’s say we ignored a little bit the rest of the continent. That’s why when you go to the West Coast, the value is fairly underrepresented. We have just 2% market share,”​ which the company wants to change, he explained.

“Expanding that distribution in the West is our key priority for the upcoming next three years. Of course, we want to consolidate our presence in the South where we have a solid distribution, and accelerate the growth in the Midwest, which is a smaller market in terms of volume and consumption, but still very interesting for us,”​ he added.

To support Filippo Berio’s “coast to coast strategy,”​ Kaljevic said the company has earmarked more than $20m to invest in slotting fees at new retailers to help bolster the brand’s presence on shelf and drive higher velocities through promotions, digital activations and market communication.

With this investment, Kaljevic said he hopes to unlock a significant portion of the American market, which he said is the largest olive oil market worldwide, accounting for 35% of total worldwide export or 380,000-400,000 metric tons.

“It is a big piece of the cake,”​ he said. But it could be bigger.

“Looking at the per capita consumption, the US is very low because the average per capita consumption in the United States is slightly higher than 1 liters per capita, which is about 33 ounces,” ​whereas European consumption, especially in the Mediterranean, is sometimes 10 times higher, he said.

‘This brand has always been recognized … as one of real value’​

Kaljevic acknowledged successfully expanding the brand will require overcoming significant headwinds – most notably inflation and global supply challenges.

“Typically brands don’t go into an expansion when you have high inflation and you have high costs, but this brand has been always recognized among the competition as one with real value,”​ that delivers quality but also is accessible, he said.

‘We have never failed in supplying the product’​

He also is confident that Filippo Berio can meet growing demand for its product as it expands despite a poor harvest last fall due to heat waves in the summer that reduced yields about 30% to 40% and increased prices about 50%.

He explained that one of the advantages of being part of a large company with a long history is Filippo Berio has long-standing relationships with more than 200 different farmers and suppliers. 

“We have never failed in supplying the product,”​ which is why Filippo Berio is a favorite at companies like Walmart and Costco, Kaljevic reflected.

He added the company’s strong supply also positions it well to fill in shelf gaps when competitors struggling with availability are unable to meet their orders.

Building household penetration through increased education​

The second pillar of Filippo Berio’s US expansion strategy is to increase household penetration by educating retailers and consumers about the value proposition of olive oil.

Currently, the household penetration for olive oil in the US is about 45%, but Kaljevic believes Filippo Berio can increase this if it can both increase the shelf space for its brand and olive oil more broadly and if it can secure better store positioning.

He explained that most US retailers currently stock olive oil alongside other oils in the baking aisle, which most consumers shop only occasionally. Kaljevic said he would rather olive oil be stocked alongside pasta, dressings and other sauces because consumers shop these segments more frequently.

But to secure a more premium location, Kaljevic said Filippo Berio and other olive oil brands need to work together to show retailers that they can help drive basket size and sales.

To do that, he said, the company needs to better educate consumers about the health benefits of olive oil, including how it offers more monosaturated fats than some alternatives and can help lower cholesterol levels.

He also wants to play up olive oil as a more natural alternative to many of the more common and less expensive but also more highly processed vegetable oils in the US market. He said he is hopeful this message will help olive oil overcome the price gap between it and other vegetable oils because many consumers still are willing to spend more on products they perceive as healthier for themselves and the planet.

On that note, Kaljevic said, Filippo Berio already has adopted a 360-degree approach to sustainability​, including the US launch this summer of the first olive oil bottle made with 50% recycled PET. The bottle featured a neck tag that gave the company extra space to tell its sustainability story, which includes how its headquarters is in the center of a nature preserve and it is advancing sustainability at the farm level as well as through new packaging and products.

Courting a more diverse shopper base​

A fundamental component of Filippo Berio’s strategy for driving retail sales and increasing household penetration is going after a more diverse consumer base.

Currently, olive oil in the US is primarily concentrated in white households, according to Kaljevic, but he said he hopes to expand its appeal to more Asian-American, Latino and Black consumers in the US by showcasing how different types of olive oil can be used in their cultural cuisine – for example drizzled on top of raw fish, used for frying and used for baking.

Filippo Berio further is reinforcing this by innovating new products beyond olive oil but which complement its use, such as sauces, vinegars and glazes.

Finally, the company is expanding access to its olive oils and other products through price-pack architecture. Given inflation and the high price olive oil currently, Kaljevic said the company is focused on offering smaller packages at a lower price point.

Ultimately, Kaljevic said his goal with each of these strategic focus areas is to increase retailer and consumer trust in the brand so that they feel comfortable coming to Filippo Berio with questions but also understand the brand as synonymous with high quality and artfully blended but affordable products that are better for people and the planet.