Breaking News

Samsung Electronics Reports $6.03 Billion Second-Quarter Profit, Missing Estimates
Tweet TWEET

Olive Oil, Honey Could Help Lift Greece Out of Recession

Greek Orthodox Priest Dimitris Vlasopoulos collects olives from a canvas tarp in Kalo Pedi village, about 335 kilometers (210 miles) west of Athens, Greece. (AP Photo/Petros Giannakouris) Close

Greek Orthodox Priest Dimitris Vlasopoulos collects olives from a canvas tarp in Kalo... Read More

Close
Open

Greek Orthodox Priest Dimitris Vlasopoulos collects olives from a canvas tarp in Kalo Pedi village, about 335 kilometers (210 miles) west of Athens, Greece. (AP Photo/Petros Giannakouris)

Greek Prime Minister Antonis Samaras is calling on manufacturers of traditional foods and beverages, from fish-roe producers to honey makers, to play a bigger role in transforming the country into an export economy.

Greece, which saw exports fall 0.2 percent to 27.3 billion euros ($37.5 billion) in 2013, needs food and beverage companies to catch up with export-oriented industries like fuels and do more to help pull the country out of a six-year recession, Samaras told industry representatives on the island of Lesvos May 13.

More Greek food companies, some of whom were forced to look for sales outside their traditional home market as the crisis shrank the economy, should focus “on processing agricultural produce in order to bring Greek products to international markets,” Samaras said. “Today, 200 large companies account for 85 percent of production while 17,000 small and medium-sized companies have huge potential.”

Greek exports of agricultural products including food, beverages and vegetable oils rose 3.5 percent by value in 2013 to 4.75 billion euros, according to the Panhellenic Exporters Association. At around 17 percent of the total value of Greek exports, the food and beverage industry trails fuels and industrial goods like machinery and chemical products as the country’s top export category.

Photographer: Kostas Tsironis/Bloomberg

Antonis Samaras, Greece's prime minister. Close

Antonis Samaras, Greece's prime minister.

Close
Open
Photographer: Kostas Tsironis/Bloomberg

Antonis Samaras, Greece's prime minister.

Greece’s economy contracted at its slowest pace in four years in the first quarter, the Hellenic Statistical Authority said May 15. The European Commission forecasts that Greek GDP will grow 0.6 percent this year, its first annual expansion since 2007.

Export Shift

Some food producers like olive-oil and flame-roasted red pepper maker Gaea Products SA started business by only focusing abroad while others have used exports to offset the shortfall in Greek sales. “Survival depends on successfully exporting the best products of Greek Mother Earth,” Chief Executive Officer Aris Kefalogiannis said in an interview. Gaea, whose first customer was U.K. supermarket chain Waitrose, gets 82 percent of its sales outside Greece.

Gaea’s international sales grow on average 18 percent a year and the company sells to 26 countries, including Germany and the U.S., where its Gaea Kalamata product last month won a gold medal at the New York International Olive Oil Competition.

While Christos Papadimitriou, CEO of Papadimitriou CC SA, a southern Greek maker of products from balsamic vinegar to mustard, says domestic sales have returned to “pre-crisis levels,” the company plans to stay focused on foreign markets, where sales now outpace revenue from Greece.

“All our products are developed with a primary focus on our foreign markets’ needs,” Papadimitriou said.

Targeting Share

About 75 percent of Papadimitriou’s revenue comes from exports to markets including the U.K., Finland and Russia, and the company’s business plan calls for reaching “significant, if not leading market shares” in some branded-product categories in countries including Australia and the Czech Republic, Papadimitriou said in an interview.

Carpo Hellas founder Kostas Kontopoulos made headlines when he opened his first retail store in Greece at the peak of the crisis in December 2011, a time when other businesses were closing down. With rents plummeting in the upmarket central Athens neighborhood of Kolonaki, Kontopoulos gambled that he could make a profit selling luxury foods, including dried fruit and nuts, sourced from independent suppliers.

“Everyone was frightened and told me I was crazy to launch a store in the middle of such an unstable period,” he said. The success of his formula, where customers are encouraged to taste before buying, led to a new store in London’s Piccadilly neighborhood last year and plans for openings in Rome, Paris, Milan and the Middle East. “Eventually, our foreign outlets will be more important than our Greek ones,” Kontopoulos said in an interview.

Retail Presence

A retail presence abroad rather than just exporting is important because of “the brand awareness we are gaining,” said Thomas Douzis, CEO of Thessaloniki-based Ergon, which opened its first combined grocery and restaurant store in Greece in 2012 and its first foreign outlet in London last year.

The company, which plans an opening in Brussels in the near future, focuses on products with protected designation of origin or geographical indication, including honey, fish and olives from independent producers. Future shops will be “combined delis and restaurants,” Douzis said in an interview. “The more products customers taste, the more they want to buy.”

To contact the reporter on this story: Paul Tugwell in Athens at ptugwell1@bloomberg.net

To contact the editors responsible for this story: Jerrold Colten at jcolten@bloomberg.net Marco Bertacche

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.