Companies involved in selling branded cooking oils are shying away from building packaged FMCG brands in canola oil due to low consumer awareness, unsteady imports and labelling issues.
Adani Wilmar and Cargill Foods, for example, would rather focus on building brands in the premium olive oil segment in their FMCG business than enter the canola oil category despite its health benefits and lower pricing.
Difficult to brand
Angshu Mallik, COO, Adani Wilmar, said, “Almost 90 per cent of canola oil imports get blended with mustard oil and imports are erratic in the canola oil category due to the labelling issues. As a result it is difficult to build a canola oil brand in India. We would rather import olive oil from Spain or Italy for our FMCG portfolio under our existing brands than enter the canola oil category.”
Last year, the Food Safety and Standards Authority (FSSAI) had stopped the import of vegetable oils under any particular brand name insisting that every container of canola oil should get labelled as “imported rapeseed low erucic” acid oil.
Canola oil is one of the largest exports from Canada and the Canola Council of Canada has been trying to convince the Government that canola is different from the oil extracted from conventional rapeseed. Vegetable oil consumption in the country is increasing by about 400,000 tonnes (3.6 per cent) per year and the Canola Council of Canada wants to tap into this opportunity.
But given the labelling norms controversy, players such as Cargill Foods, is avoiding the canola oil category.
“Even though 2 lakh tonnes of canola oil gets imported, most of it gets adulterated with mustard oil. We would rather focus on growing our olive oil portfolio with Leonardo as an FMCG brand,” says Siraj A Chaudhry, Chairman, Cargill India.
Players who continue to be in the canola oil market, Dalmia Continental for example, have moved the courts to revoke the labelling norms.
“Commodity players do not want to invest behind the development of canola oil and get hassled by the FSSAI norms for this category. Now that we have an interim order from the Bombay High Court, we are using the name of canola oil in our labelling since we do not want to confuse consumers,” said VN Dalmia, Chairman, Dalmia Continental and owner of Hudson Canola oil.
RPS Kohli, Director, Jivo Wellness and President Canola Council of India, said that commodity players do not want to jump into a category which has low volumes and awareness.
Playing on health part
“Sales for canola oil have grown by word of mouth rather than big budget advertising in the olive oil category,” said Kohli.
While the canola oil category is pegged at ₹150 crore, the olive oil segment is a ₹600-crore market. “Olive oil is perceived to be healthier oil than canola and we will enhance presence in the segment with our brands like Leonardo and Gemini as we are growing at 20 per cent which is much ahead of category growth,” said Chaudhry.Olive oil gets preference over canola oil in India,