e-Market Services make e-markets easier to use for international businesses

TESTIMONIALS FROM COMPANIES USING FINCALINK

e-Business Issue

By Inés Ramírez

e-Market Services Spain

www.emarketservices.es

May 2014

May 2014

Page 2 of 6 www.emarketservices.es

Summary

Fincalink is an e-market that sells Spanish extra virgin olive oil direct from olive presses to consumers in a number of countries. At present the platform focuses chiefly on the British and Spanish markets.

Aceites Cazorla, Aceitunas Roldán Naturvie, Lozagal and Cooperativa Viver, all olive oil producers that use the Fincalink e-marketplace, spoke to us about how the sales platform has benefited their businesses, while they also offered some tips for other companies considering using electronic markets as a sales platform.

Exports are one of the best channels of growth for businesses and a great means of reaching new markets. With e-marketplaces, companies can scout out new markets without investing huge amounts of money, and can even work in partnership with other companies to establish joint positions in target markets.

This is precisely the strategy adopted by Fincalink, an electronic B2C market operating in extra virgin olive oil and derivative products. The platform brings together a range of Spanish industry operators seeking to promote their products in Spain and the United Kingdom. The idea is to create an ‘Amazon for olive oil’, and, as the saying goes, unity is strength. The e-marketplace helps to raise the profile of this very Spanish product among online British consumers, thus benefiting all companies who sell via the platform.

How the electronic market came about

Fincalink was conceived as an idea in Great Britain in 2012 by Javier Asensio, who at the time was working in the energy industry. Having grown up in Huesa (Jaen), Javier was surrounded by olive groves from a young age, which instilled in him a lifelong devotion to olives and olive oil. Having witnessed high-quality produce routinely used in blends and subsequently labelled as being sourced from other countries, he decided to set up his own website to give Spanish olive oils the treatment they deserve, and allowing consumers the opportunity to buy directly from producers.

Asensio says that 60% of global olive oil production comes from Spain, where more than 200 olive varieties are grown: Aloreña, Cordobesa, Gordal, Manzanilla and many more. “Simple bulk production is gradually falling by the wayside in favour of a focus on quality and variety, all of which is starting to be appreciated both in Spain and overseas. Producers are making every effort to get the best out of their olives, while consumers in turn are demanding better oils".

May 2014

Page 3 of 6 www.emarketservices.es

The idea behind Fincalink was precisely to bring these two parties together "not as an intermediary but as a service provider; giving consumers with the opportunity to order the finest olive oils and have them on their kitchen tables within 3 days".

The companies pay 10 euros per year to be members of the platform, as well as a 5% commission on each sale. In exchange each company gets its own business page on the e-marketplace, while the platform's marketing team takes care of publicising the products en masse. Profile pages can include descriptions of each company, contact details and any designation of origin stamps, which gives consumers every confidence that the products will be of absolute quality when buying directly from either Spain or the United Kingdom.

The British online market represents a major opportunity for food industry operators. It is the world's leading online food buyer according to figures from Forrester Research, accounting for 20% of total e-commerce. Furthermore, gourmet products such as wine and olive oil are much sought after among online UK consumers.

After just two years Fincalink now operates with 15 Spanish producers. We spoke to several of them about their experiences with the e-marketplace. They were all adamant that Fincalink has already been a real boon for their operations. Here's what we were told by Cooperativa Viver, Aceites Cazorla, Naturvie, Lozagal and Aceitunas Roldán.

When and why they made the decision to sell online

It's best to start at the beginning, so we asked them how and when they first came to sell online, and more specifically via electronic markets such as Fincalink. Fernando Marco, Director of Cooperativa Viver (Castellon), said the firm first opened up to e-commerce in 2010. "We saw it as an opportunity to give our products nationwide reach in Spain", he told us, after which they began to investigate opportunities in foreign markets. Cooperativa Viver joined Fincalink in 2012 as a means of giving its products an outlet to the UK market. As well as selling in Spain via its own virtual store, it also operates on specialist EVOO websites such as Cinco Olivas, Oliva Oliva and Original CV, with a resulting turnover of 15,000 euro, "which for a small agricultural cooperative from inland Castellon is not bad at all!”. It now hopes to record similar figures in the rest of Europe.

As for the Jaen-based cooperative Aceites Cazorla, Juan Manuel Martínez, Managing Director of the firm, said the company has been using its website as a sales platform for some ten years. However, this year the company began working via social networks, "currently a growth niche market, as more and more people start using these sites”. But for direct sales to consumers the cooperative currently only uses Fincalink.

The Extremadura-based Naturvie set up its website in 2000 to sell to retailers, as Head of Sales and Exports, Victoria Blanco, told us. As well as operating via Fincalink, the company "uses lots of other platforms that have emerged, such as De Olijfolie Shop and Delinero.de outside of Spain, and Ibercentro Extremadura, Exquisitalia.com, Goormeet and other platforms that are not purely sales platforms, such as True Food Alliance within Spain, and every day we are invited to join more”. Victoria says the company has noticed a plethora of websites emerging lately, all focused on retail sales of gourmet products such as those manufactured by the company: olives, patés, salt flakes, etc.

May 2014

Page 4 of 6 www.emarketservices.es

Since the day it was founded in Jaen in the year 2010, Lozagal was acutely aware of just how important the Internet could be to its success. Director of Business and Exports, Francisco J. Lozano, says the company set up its website immediately; "we know how vital it is to have a web presence and to get your products out there". Lozagal uses Fincalink to give it a foothold in the United Kingdom, while in Spain it sells via brick and mortar shops as well as online stores, such as El Corte Inglés, Deliteca, La despensa de Valdés, Aceitera Jaenera and Gegarri, with online sales representing 20% of its total production.

Jose Manuel Puyó, Director at the Malaga-based Aceitunas Roldán, says the company started operating online and via e-marketplaces about 2 years ago, as it saw how new technologies were altering the way in which users and customers behaved. “Our customers change and we need to change with them", says Puyó. The company therefore uses its own online store for sales chiefly in Spain and the Fincalink platform to sell in the British market.

Experience in the exports market

The majority of the companies already exported their products prior to joining Fincalink. Lozagal says it now exports between 25% and 35% of production to Europe, America and Asia, selling 10% of the total via the Fincalink e-market.

43% of revenue at Aceites Cazorla is generated by wholesale sales abroad to third party companies, while via Fincalink it records some €5,000 in retail trade, selling 2.5 and 5 litre cans.

At Aceitunas Roldán, 20% of turnover is accounted for by exports. “We operate in highly demanding markets such as Canada, Japan, Colombia, Germany and Poland", says the company manager. In fact, its operations in Canada began when an online distributor happened to buy products while on holiday in Spain, "a twist of fate that gave us a foothold in the important Canadian market". The company records 10% of its total sales via Fincalink.

Naturvie had also been an exporter prior to joining the platform. While it currently only sells to the UK via Fincalink, its products are also available in countries such as the United States, Canada, Brazil, Mexico, Japan and the Philippines, as well as the rest of Europe. Exports represent between 75% and 80% of total sales, although Fincalink currently accounts for between 3% and 5% of turnover.

Cooperativa Viver makes physical sales via distributors in Belgium, Germany, Holland and the United States, but it only sells online overseas via Fincalink, with exports representing just 1% of sales. “Limited production restricts how much we can sell abroad", says Fernando Marco from Cooperativa Viver.

May 2014

Page 5 of 6 www.emarketservices.es

The benefits of e-markets

All the companies we spoke to agreed that electronic markets have been a real boon for their businesses. Manuel Puyó from Aceitunas Roldán said "these platforms mean we can extend our products to markets and regions that would be practically out of our reach via conventional distribution chains”.

Director of Business and Exports at Naturvie, Victoria Blanco, says online market places are an important sales tool, being "very fast, simple and largely free of middlemen”.

According to Cooperativa Viver, such platforms leave manufacturers free to focus on production and unlocking the value of their products. “We can leave sales processes to experts in the field", says the company's Director. He added that the firm's online presence has seen its range of products grow, "in fact, our line of extra virgin olive oil cosmetics, Olea Nature-Esencia del Palancia, emerged as a direct response to demand from customers".

Aceites Cazorla told us that such platforms have helped them to diversify their markets "subsequently driving sales, while reining in costs", says Juan Manuel Martínez.

“The biggest benefit has been to raise the profile of our product overseas, while buyers on Fincalink have confidence in products they find on the site”, said Francisco Lozano from Lozagal. Indeed, the company has had particular success selling products to the events and weddings market.

Advice for other companies

When asked what advice they would give to other businesses interested in using electronic markets, Victoria Blanco was emphatic that they should take the plunge, mainly because they represent a further tool that companies need to capitalise on, but warning "you need to rely on well-established and secure platforms such as Fincalink".

Aceites Cazorla agreed, encouraging other companies to join Fincalink, "it's very easy to use and very cheap. It basically operates as our own online store. And the more of us there are, the more of a benchmark it will become in the market. So I encourage as many producers as possible to join up ", says Juan Manuel Martínez.

Cooperativa Viver recommended that companies be very clear and honest when using e-marketplaces, with Fernando Marco encouraging others "to choose the platforms you partner with very carefully" to achieve optimal results.

The idea, says Lozagal's Head of Sales, is to achieve the best possible web presence for the company, getting your website among the top placed pages or operating via well-respected and authorised e-markets. “Such positioning can bring plenty of benefits for a company, and at the very least generate the ideal product image", says Francisco Lozano.

May 2014

Page 6 of 6 www.emarketservices.es

Juan Manuel Puyó, Director of Aceitunas Roldán, warned that there are no magic formulas for success in online markets. However, he recommends patience, transparency and perseverance. “Online platforms open larger markets than conventional distribution chains, but you don't get the same immediate visibility". This means perseverance is required to position your products via blogs, working actively on networks, etc. "At the end of the day, you want to boost your brand image in new markets, even if they are virtual markets!"