Acronyms and abbreviations Acronym Definition APIA Agence de Promotion des Investissments Agricoles Agricultural Investment Promotion Agency CAGR compound annual growth rate FAO Food an
CONTEXT AND OBJECTIVES OF WORLD BANK GROUP SUPPORT
INTRODUCTION
Tunisia's economic development has been characterized by significant regional imbalances, with coastal regions progressing faster than interior areas The North West and Center West together account for around 47 percent of the poor and exhibit the lowest indicators in education, employment, and health, along with the highest unemployment rates among university graduates.
Agriculture (crops, forestry, and livestock) dominates the economy in the NW and CW regions The two regions account for 50 percent of Tunisia’s agricultural land and
82 percent of forests in these two regions support the rural economy, where agriculture provides the bulk of employment and income opportunities, yet income levels remain low Well-paying jobs and other income opportunities are limited, poverty levels are high, and overall economic prospects are threatened by unsustainable agricultural and natural resource management practices, as well as by climate change Recent analytical work and field engagement emphasize the need for sustainable reforms to improve livelihoods and resilience in these communities.
World Bank teams, during project preparations, identify four broad constraints that hinder access to higher value-added markets and, more broadly, impede the sustainable development of Tunisia's North West and Center West regions These constraints collectively shape investment, productivity, and regional growth trajectories across these areas.
• Limited availability of key common services necessary for the development of competitive businesses, such as advanced logistics, business intelligence services, research and development, and financial services
• National policies that fail to foster the sustainable development of agriculture and competitive agribusiness activities
• Fragmented institutional support and centralized administrative approaches to local development that result in a lack of effectiveness and efficiency
• Limited infrastructure and public services (including transportation, education, health, water supply, and sanitation)
The World Bank Group's strategy for Tunisia targets structural transformation in lagging regions by leveraging value-chain and cluster development to improve market access, raise productivity, and boost employment and competitiveness Its goal is to create more and better jobs in small and medium-sized enterprises that can compete across a diversified range of markets The approach also seeks to ensure fair competition-based opportunities for local actors and smallholders, not only for the largest players.
Creating more and better jobs for all citizens—women and men alike—is essential for sustainable, resilient growth worldwide Expanding opportunities for quality employment reduces poverty, strengthens households, and drives inclusive growth that benefits communities at every level This objective sits at the core of the World Bank Group's twin goals: reducing poverty and boosting shared prosperity for all people.
Source: African Development Bank -Tunisia Country Strategy Paper 2017-2021
Promoting shared prosperity in Tunisia, the approach focuses on (a) orienting public investments to maximize impact on the business environment and job creation in disadvantaged regions; (b) maximizing synergies through market-oriented private-private and public-private dialogues; and (c) improving coordination and building capacity among existing MSME-supporting institutions through an integrated value-chain development offering, enabling replication across other value chains, clusters, and regions of Tunisia.
THE VALUE CHAIN DEVELOPMENT TRAINING PROGRAM
This technical assistance (TA) project, the Value Chain Development for Jobs in Lagging Regions—Let’s Work Program in Tunisia, aims to identify the most binding constraints hindering job creation and productivity within targeted value chains in Tunisia’s lagging regions and to inform World Bank lending projects currently under preparation to address these constraints.
The Value Chain Development Training Program, designed and delivered by a World Bank team, is a central element of the capacity-building component of the technical assistance Its objective is to build strategic capabilities in value chain analysis within the Tunisian public administration to support private sector development, promote job creation, and enhance competitiveness, with a focus on lagging regions.
From April to November 2016, 25 civil servants organized into seven teams participated in a training program that combined five in-class modules with a hands-on, project-based exercise conducted over the training period Trainees, nominated by their government institutions, learned how value-chain relationships connect firms, methods to improve efficiency along the chain, and strategies for business expansion The program began with a focus on market segments with the potential to generate jobs and deliver a high return on investment for firms.
Hands-on training enabled participants to identify actionable recommendations to strengthen the competitiveness of firms within a local economic cluster Over six months, the exercise proposed how to develop several pilot clusters and value chains It combined standard change-management tools from business consulting with group psychology, together with a 10-step process to identify what must be modified to make the studied value chain more competitive and to create better jobs The analyses and recommendations presented here reflect the findings from these exercises.
ACTIVITIES IN SUPPORT OF FUTURE WORLD BANK GROUP OPERATIONS
The TA participates in the World Bank Group–led Let’s Work program, dedicated to expanding and improving private-sector jobs in countries such as Bangladesh, Mozambique, and Tunisia Let’s Work is a global partnership that unites organizations committed to addressing the global job crisis by harnessing the private sector’s potential to create more and better jobs, guided by a vision of fairness and inclusiveness.
Value chains selected for analysis are chosen for their readiness and relevance for follow-up operational engagements, their potential to generate strong, positive impacts for targeted social groups, and their clear complementarity with other World Bank activities The selection was identified in consultation with the Government.
In Tunisia, World Bank Group–financed operations under preparation or implementation focus primarily on agribusiness value chains, with medical tourism included to represent a services-sector value chain The pilot lagging regions—North West and Center West—were selected in consultation with the government and in coordination with other World Bank projects and ongoing WBG technical assistance These regions are among the poorest in the country, with some of the lowest development indicators and the highest unemployment rates According to the National Institute of Statistics (INS), regional unemployment is around 20%, rising to about 26% in the governorate of Kasserine.
Across both regions, young men and women are the most affected demographic groups Although the share of people working in agriculture has been steadily declining, farming remains an important source of jobs, particularly in rural areas, where it accounted for 18 percent of the workforce in 2011.
The seven clusters analyzed by participants were the following:
Project 1 Grand Tunis Medical tourism
Project 2 North West (governorates of Jendouba, Béja, Siliana, and Kef) Olive oil
Project 3 Center West (governorates of Sidi-Bouzid and Kairouan) Chili peppers Project 4 Center West (governorates of Sidi-Bouzid and Kairouan) Tomatoes
Project 5 North West (governorates of Jendouba, Béja, Siliana, and Kef) Myrtle
Project 6 North West (governorates of Jendouba, Béja, Siliana, and Kef) Lentisk (mastic)
Project 7 Center West (governorates of Kasserine, Gafsa, Sidi Bouzid, and
In three value chains—olive oil, tomatoes, and rosemary—the training program’s tutors worked closely with product experts to complete and deepen the studies started during the training, ensuring that practical insights and expert validation enriched the research This collaboration bridged theoretical learning with real-world expertise, strengthening the impact of the training on each value chain.
This complementary work presents the anticipated outputs from the analyses and informs the design of potential World Bank lending operations in Tunisia, employing a value-chain and cluster-development approach to accelerate job creation—especially for low-skilled youth—and to reduce inequalities between leading and lagging regions The report documents the outcomes of these three analyses.
METHODOLOGY
The analysis of the three value chains began with a background overview and a contextual deep dive into the global Industry 9 The research focused on industry dynamics and trends related to the global Industry 9.
7 Tunisian National Institute of Statistics
8 In this report, the whole training program’s tutors and product experts will be referred as “the team”
This study's methodology follows the World Bank Group's Global Strategic Segmentation Analysis framework as outlined in their 2017 reports, applying it to four sectors: Horticulture, Beef, Footwear, and Medicinal and Aromatic Plants By adopting this segmentation approach, the analysis identifies distinct market segments, assesses their growth potential, and informs strategic decisions for policymakers, investors, and industry players The framework blends global benchmarks with sector-specific dynamics to deliver actionable insights that support sustainable growth and competitive positioning across these diverse agro-industrial domains.
- global supply (including historical reasons for success in certain countries and regions; and ways in which markets are responding to changes in demand),
- evolution in demand (geography and product/service),
- industry cost structure and margins,
- recent evolution in value chain structure (e.g localization, specialization and integration amongst firms)
The global industry was segmented not only by product but also by the intended market or user group for that product, enabling strategic market segmentation based on structural trends and insights from the global industry deep dive and Porter's Five Forces analysis (see Annex A) Porter's Five Forces was used to assess industry attractiveness by evaluating profitability and identifying the actors within the industry who hold the greatest bargaining power, thereby clarifying which actors capture the bulk of available profits For each market segment, margins were analyzed through the Five Forces framework, and a data-driven collection of segment strengths identifies the most attractive segments for investment and strategy.
“attractive” market segments for the target beneficiary of the exercise (reference point)
This analysis uses farmers as the reference point for evaluating the relative strength of Porter’s Five Forces, rather than retailers, to reflect the World Bank Group-financed projects’ aim of promoting income growth for the bottom 40 percent of the population By rooting the assessment in the agricultural sector, the framework highlights how farmer-driven market dynamics influence competitive intensity and policy priorities toward inclusive development.
For every strategic segment within each value chain, the approach comprises five interconnected activities: (i) defining Advanced Buyer Purchase Criteria to establish the minimum requirements—such as quality, volume standards, number of units, price, safety, transparency, traceability, and financial viability—that both B2B buyers and consumers will accept; (ii) assessing geographic strategic options to identify the advantages and disadvantages of targeting local versus global markets, including the choice between a single product offering or regionally tailored product and brand strategies; (iii) evaluating product and branding strategies to clarify the differences between niche-market and global-market approaches; (iv) identifying and qualifying Key Success Factors to determine the capabilities a firm must possess to compete effectively; and (v) mapping the ideal value chain for each strategic segment by applying the above steps (i)–(iii) and identifying the optimal configuration and linkages that support the intended competitive position.
- the relative “concentration’ of each of the activities in the value chain
- the relative knowledge, capital, labor as well as energy intensity of each value chain and its reliance on natural resources or factor conditions
Understanding the linkage between value chain activities means evaluating two core dimensions: the frequency of exchanges of goods, services, and information, and the speed at which those exchanges are delivered This perspective reveals how tightly each activity is connected through ongoing interactions and rapid information flow, affecting overall responsiveness, efficiency, and competitiveness across the value chain.
10 Both “business to business” and “business to consumer” customers
HOW TO ENHANCE COMPETITIVENESS AND JOB CREATION FOR OLIVE OIL VALUE CHAINS
MAIN FINDINGS
Global olive oil consumption rose 1.8-fold between 1990 and 2015 Tunisia occupies a prominent place in the olive oil market, accounting for 3.9% of world production in 2017 and ranking seventh with about 100 metric tons, while its olive oil exports represented 5.5% of world exports, making Tunisia the fifth-largest exporter In Tunisia, the North-West region alone produces about 90,000 metric tons per year (41% of national production) of organic, virgin, and extra virgin olive oil The olive oil value chain's strategic market segmentation identifies gourmet olive oil as the most attractive segment, linked to high-quality organic oil and retail targeted at specialty shops and luxury restaurants Gourmet olive oil is highly differentiated, with strong added value, few substitutes, and high entry barriers due to product differentiation The global trend toward gourmet olive oil is driven by the appeal of a healthy diet and a distinctive flavor, with consumers and buyers more demanding than for other olive oils; this high differentiation gives producers strong bargaining power and higher margins, reinforcing the segment's attractiveness.
Market analysis shows strong value-creation potential in the gourmet products market through a differentiation strategy based on product quality and promotion effectiveness The findings indicate that developing the olive oil value chain should be structured around seven strategic axes to maximize competitiveness in premium markets and guide actions across sourcing, production, branding, and distribution.
• Improve the legal and institutional framework to enhance market access
• Implement a market development strategy for gourmet products based on knowledge of customers’ preferences and the creation of a brand image
• Improve the logistics of the value chain, from harvest to oil mills, to ensure the quality of the oil
• Develop agricultural production technologies and improve olive yields per hectare
• Improve promotions of the export through optimization of existing export support and better coordination among organizations
• Introduce more accessible financial products
11 International Olive Council (IOC), www.internationaloliveoil.org/
12 International Trade Centre, Trade Map website, www.trademap.org/
According to the IOC, extra virgin olive oil is the highest quality olive oil, obtained solely from olives by mechanical or physical means under conditions that do not alter the oil, and it must have a free acidity, expressed as oleic acid, of no more than 0.8% and other characteristics set by IOC standards Organic olive oil meets the same extra virgin requirements but is produced only from certified organic olives Organic olive oil is just one sign of quality, and without a clear differentiation strategy—such as premium packaging, detailed descriptions of the olive variety, its crushing method, and origin history—and promotion through fine-deli distribution (épicerie fine), it cannot belong to the gourmet segment, which encompasses the highest quality extra virgin olive oil that is highly differentiated and sold only in specialty shops and luxury restaurants.
OLIVE OIL GLOBAL OVERVIEW AND SECTORAL TRENDS
Olive oil is the main component of the Mediterranean diet, widely recognized for its health benefits and culinary versatility in foods and beverages Spain is the largest producer and exporter, while Italy is the largest importer, making the Mediterranean basin the world’s hub of olive oil production and related businesses.
On the surface, olive oil seems to have limited significance when viewed against global statistics, accounting for roughly 3 percent of the world market for edible vegetable oils Yet its share of world trade by value is significantly larger—about 15 percent—because olive oil commands higher unit prices than other oils, making it a high-value commodity (Aparicio and Harwood 2000).
The olive oil sector makes a notable contribution to the economic activity of several countries In
Spain’s olive sector involves over 500,000 farmers and requires about 46 million working days each year, underscoring its labor-intensive nature In Tunisia, more than 10% of the population earns some or all of their income from olive farming, and the sector accounts for roughly 30% of seasonal agricultural employment in addition to permanent jobs.
World production of olive oil was 2,56 million metric tons in 2017 Nearly all—98 percent—of world production is concentrated in the Mediterranean basin Spain (50.3 percent), Greece (7.6 percent) and
Italy (7.1 percent) are the main olive oil producers 15 Tunisia, with 3.9 percent of world production, ranked seventh The total area of olive groves is over 11 million hectares in 47 countries More than 6,700,000 families worldwide have olive trees, 1.67 hectare per family on average 16
14 In 2015–16 total production of vegetable oils worldwide amounted to about 185.78 million tons Palm oil, soybean oil, rapeseed oil, and sunflower oil accounted for around 87 percent of the production (U.S Department of Agriculture), https://www.usda.gov/
The International Olive Council (IOC) is the world’s only international intergovernmental organization dedicated to olive oil and table olives Its membership comprises leading international producers and exporters of olive oil and table olives, with IOC producer members accounting for about 98 percent of global olive production, concentrated mainly in the Mediterranean region The IOC serves as a central hub for industry standards, trade policies, and market insights within the olive sector For more information, visit the IOC website at http://www.internationaloliveoil.org.
16 IOC website, www.internationaloliveoil.org /
Key figures on the world market for olive oils
(Data adopted at the 108 th session of the IOC, Madrid, November 19-23, 2018)
Note: 0 Nil or under 300 tons a) Of which: Cyprus (6,0), Croatia (5.0), France (3.3), Greece (195.0), Italy (182.3), Portugal (69.4), Slovenia (0.4), Spain (1,290.6) b) Extra Community Trade Only, including inward processing traffic
Main olive oil producing countries, 2016–17
Olive cultivation is expanding beyond the traditional Mediterranean basin into the United States, Afghanistan, India, Pakistan, and other Asian countries, with Argentina and Chile already producing around 25,000 metric tons per year (FAO 2015) As larger production areas develop—often through foreign investment from leading producers such as Spain and Italy—the global olive sector is likely to follow a wine‑like trajectory, with rising quality and productivity and new producer countries eventually competing with the Mediterranean region.
Over the past two decades, global olive oil production has fluctuated between 2.5 and 3.2 million metric tons annually, with climatic hazards such as drought, shifts in olive varieties, and disease driving these variations A clear example occurred in 2014–15 when an epidemic ravaged olive crops in Spain and Italy, bringing world production down to about 2.444 million metric tons In the same season, Tunisia achieved an unprecedented harvest of 340,000 metric tons, eight times its previous season and about 54 percent higher than in 2012–13 (IOC 2015).
Olive oil production costs depend on the production system and technology used, which vary from country to country In Tunisia, olive yields are among the lowest (Figure 1); however, Tunisia has one of the lowest production costs (€2.36 per kilogram) when traditional cultivation systems are employed, not due to high yields but because of low investment in production systems and the low cost of labor compared with Europe (Figure 2).
International benchmarking of olive yields, tons per hectar
Cost of obtaining one kilogram of olive oil in traditional olive cultivation systems without irrigation (euros) Plantation density 36% young trees
• 56,900 metric tons of olives per year; 90% of planted olive trees are of Chétoui variety
• Less than 4% of the area is irrigated
• Low level of control of cultivation techniques
• Jobs created are 15 to 20 days per hectare per person; 1 work day (6 hours) earns between TD 10 and TD 20
•Amount of olives at harvest is estimated at 80 kilograms to 100 kilograms per TD per person
•No control over collection (a very high waiting period)
•Two-thirds of production is processed outside the region
•Oil mills are below their capacity (20–30%)
•Poor mastery of technical processing and extraction
•Jobs created are 5 permanent posts per mill
•High need of mobilization of large capital (purchase of olives, picking, collecting, trituration, storage, packaging)
•10 permanent jobs created per unit
•90% of the production is marketed in bulk
STRATEGIC MARKET SEGMENTATION
Strategic market segmentation identifies the most attractive markets and divides them for deeper exploration and precise targeting of the chosen segments, enabling efficient go-to-market planning and resource allocation As a result, the product can be clearly positioned within the target market, with messaging and value propositions tailored to the needs of the key segments.
The team identified three products—Virgin Olive Oil, Extra Virgin Olive Oil, and Olive Oil Gourmet—and two markets, Seasoning and Cooking The product–market combinations yielded three distinct segments, guiding strategic positioning and messaging for olive oil across everyday seasoning, premium cooking, and gourmet applications.
Margin analysis was conducted for each segment, revealing the margin dynamics and the competitive strengths that drive profitability The resulting data highlight the strengths of each segment and identify the most attractive market segments for North West olive producers seeking growth and optimal returns.
Synthesis of main olive oil markets based on consumption trends
Source: Value Chain Development Training Program
A Virgin olive oil for cooking is an unrefined oil for which no chemicals or heat is used when extracting oil from the fruit It maintains the purity and taste of the olive, though production standards are not as rigid as for other oils It is considered a “commodity” that satisfies the basic needs of buyers Rivalry is strong and availability is wide, with several substitutes (vegetable oils) available and low entry barriers The buyers’ bargaining power is very high because immense volumes are available that satisfy the quality of the segment and that are relatively easy to attain Worldwide, 71 percent of production comes from Italy, Spain, and Greece Competitiveness depends mainly on ultra-high productivity and low price, less on differentiation The segment attractiveness is weak for the exercise’s targeted beneficiaries (bottom 40% and small producers in NW)
B Extra virgin olive oil (seasoning) is a higher-quality oil Olive oil must meet specific standards to receive the label “extra virgin.” Because of the way the oil is made, it retains more authentic olive taste and has a lower level of oleic acid (no more than 0.8 percent) than other olive oil varieties It also contains more of the natural vitamins and minerals found in olives It is considered an unrefined oil because it is not treated with chemicals or altered by temperature Availability is wide and competition is very high The main purchase criterion is price A current trend is the increasing sophistication of buyers who are interested in more information about organoleptic characteristics and the origin of the product Intermediaries and distributors hold market information and can buy the product from many suppliers They have strong bargaining power and good margins, and they
26 The segmentation exercise is illustrated in annex A (“Methodology Used the Segmentation Exercise”)
35 put pressure on suppliers The segment is not attractive because most of the margin goes to intermediaries
C Gourmet Olive Oil (seasoning) is associated with the concept of the highest quality and is on sale in specialty shops and at luxury restaurants 27 “Gourmet” olive oil is a highly-differentiated product, with strong value added, few surrogates, and high entry barriers Consumers and buyers of this product are more demanding than for the other olive oils Production is more complex because attention is paid on quality control 28 Marketing strategies are focused on consumer loyalty Producers have more bargaining power and, consequently, a higher margin The segment attractiveness is high Xerfi Research 2015 estimated that revenues of the studied companies would increase by an average of 3 percent per year by 2018 (Figure 12)
Evolution of revenues of companies that sell gourmet olive oil
Note: The study examined revenues of a panel of companies in the sector
While olive oil consumption grows steadily in multiple market segments, “gourmet olive oil” is the market segment through which producers of the North West of Tunisia are most likely to develop a durable competitive advantage In this segment, the North West could also generate large positive externalities and spillovers The following section will focus on constraints that would prevent local
27 Organic olive oil can be in all three segments as a sign of quality, but if it is not accompanied by a strategy of differentiation (in high quality packaging, characteristics specific to the variety of olives, its mode of crushing, and its history) and promotion through deli distribution (épicerie fine) it cannot be sold in the gourmet segment According to the report of the Carnets of the BIO Agency in 2016, organic olive groves represent 6.1 percent of the world's olive groves In 2014, 627,748 hectares of olive groves were certified organic and in conversion (a 2.4 percent increase over 2013) Of these organic olive groves, 78 percent were located in Europe and 20 percent in Africa (mainly in North Africa) Main producers of organic olives are Spain (172,391 hectares), Italy (170,067 hectares), and Tunisia (124,123 hectares) In Italy, 14.8 percent of olive groves were organic in 2014, in Spain 6.9 percent were organic, and in Tunisia, 6.8 percent were organic France has the largest share of organic olive groves, with 27 percent in 2014 and 28 percent in 2015 Olive oil accounts for about 80 percent of organic exports of Tunisian products in value
API estimates (2016) that Tunisia’s olive oil sector includes 1,679 oil mills with a theoretical capacity of 43,053 metric tons per day, 40 packaging units with a combined capacity exceeding 165,000 metric tons per year, and about 100 SMEs registered with API that operate in olive oil packaging and export In the North West, there are 30 processing units across Beja, Siliana, Kef, Jendouba, and Bizerte, representing roughly 23% of the national crushing capacity, along with a project to extend olive plantations.
36 producers from targeting this segment and what actions should be taken to capture the opportunities this segment offers for Tunisia in general and for the North-West in particular
OPPORTUNITIES IN THE GOURMET OLIVE OIL MARKET AND MISSING LINKS
The global trend toward gourmet olive oil is driven by the pursuit of a healthy diet and a growing appreciation for distinctive flavor and taste In France, the gourmet olive oil market is valued at around €5 billion (Les Echos Études, 2018) and continues to grow, fueled by expanding interest from French and other European consumers in good eating and in homemade, locally produced products rooted in regional gastronomy.
More and more consumers seek transparency about how products are ethically produced and environmentally managed before they buy, which in turn elevates the role of packaging and positioning in communicating value Brands respond with elegant bottle design and compelling storytelling that highlights ethical practices and the emotional value of the product In olive oil, this dynamic is especially powerful: the gourmet high-end segment can set standards for the entire production and help build the country’s reputation as a producer of high-quality, responsibly sourced oil.
To compete in a demanding market, gourmet olive oil from Tunisia’s North West cluster must be highly differentiated and meet the sophistication level expected by discerning consumers, with a strong emphasis on product quality and strategic positioning through packaging and marketing to attract buyers As a permanent member of the International Olive Council, Tunisia applies rigorous national and international quality standards and respects certification labels, ensuring credibility across markets All exported Tunisian olive oils are systematically analyzed to verify their conformity with international standards, reinforcing trust in the product and supporting effective SEO-driven visibility.
A study being finalized by Echos Etudes shows that the market for delicatessen and luxury food products is on a positive growth trajectory despite a tense economic environment and low purchasing power The market is difficult to interpret due to the absence of specific statistical codes, yet it was valued at €5.3 billion in 2011, and panel-company revenues are expected to grow about 3% per year (Les Echos Etudes, 2018).
BOX 5: BEST CHEFS IN EUROPE CHOOSE TUNISIAN OLIVE OIL
European chefs increasingly rely on Tunisian olive oil to add character to their menus, a trend highlighted during Paris’s Olio Nuovo Days, where blind tastings introduced Parisian kitchens to top Tunisian oils Akrame Benallal selected the Chétoui oil from Domaine de Segermès, while other chefs favored oils such as Chemlali from central Tunisia and a northern Chétoui oil from Moulins Mahjoub, with Fendri also among the favorites These extra-virgin oils are organically produced on family farms using traditional methods According to Emmanuelle Dechelette, founder of Olio Nuovo Days, Tunisian oils are inspiring chefs to start dishes with oil and seek oils with more character; Chétoui oils are praised for their intense, green profile, while Chemlali offers fruity nuances, a development French chefs are beginning to recognize.
Targeting the gourmet olive oil segment represents a prime opportunity for Tunisian producers to boost margins by elevating oil quality and adopting sustainable agricultural practices By investing in quality improvements across harvest, milling, and bottling, Tunisian olive oil can stand out in premium markets and command higher prices Adopting sustainable farming techniques helps protect the environment, ensure long-term yields, and meet growing consumer demand for responsibly produced products Implementing inclusive labor practices strengthens the social sustainability of the value chain, improves worker welfare, and enhances brand integrity Together, these strategies position Tunisian olive oil for sustainable growth in the global gourmet market.
The improvements needed to compete with advanced global players in this market remain a big challenge for
Figure 13 highlights Tunisian entrepreneurs and the information gap surrounding these markets, including their specifications and the players who operate within them Addressing this lack of market intelligence is a key starting point for value chain development, enabling the identification of missing services, investments, or regulatory reforms needed to strengthen competitive advantage across these segments.
In the case of gourmet olive oil, team identified the following weak points in the chain: Source: Value Chain Development Training Program
Olive production today is largely based on handpicking with very limited irrigation (less than 4 percent of the area) and suffers from insufficient control of cultivation practices such as olive maturity, yield, and irrigation management Consequently, the supply chain has low productivity, worsened by poor sequencing of olive processing stages that causes long waiting periods and by a lack of transport logistics.
• Post-harvest is characterized by two-thirds of production transferred out of production zone
Oil mills are operating well below capacity at only 20–30%, while the supply chain suffers from weak quality control and a lack of a certificate of analysis, undermining food safety standards In the post-harvest phase, weak storage conditions and inaccurate conditioning are the main issues identified, underscoring the need for improved handling from harvest to processing to ensure safe, high-quality oil products.
Distribution relies on a traditional distribution network and logistics, with little focus on sophisticated buyers such as luxury restaurants and delicatessens The oil is mainly sold in bulk directly to clients, leaving little room for product differentiation Marketing is underdeveloped, and consumers are not adequately informed about the oil's quality and features.
BOX 6: THE OLIVE OIL DIFFERENTIATION STRATEGY
An olive oil differentiation strategy aims to position the product as unique in a chosen market segment that values its distinctive features and has the purchasing power to pay a premium Differentiation relies on attributes highly valued by consumers—quality, health benefits, geographical origin, brand, and production method—to secure and exploit competitive advantages Understanding exact consumer preferences is the first step in defining marketing strategies and policy choices for product design, price, messaging, and distribution, and producers should know where they stand competitively to guide strategy and investment decisions.
Due to logistical and resource constraints, the training exercise could not accommodate extended stakeholder consultations or deeper strategy formulation Follow-up work will involve interviewing advanced buyers in destination markets to accurately capture market demands The resulting technical requirements and contacts with these buyers will then be shared with firms participating in the value chain development exercise to align capabilities and accelerate implementation.
Figure 13 The price advantage of specialized olive oil segments
WHAT IT WOULD TAKE TO SEIZE THIS OPPORTUNITY
Entrepreneurs in the North West region require targeted support and a bundle of services to compete effectively in the gourmet olive oil market Establishing a dedicated managing unit for olive oil could coordinate all actors along the chain and align the various support structures, while pushing for a revision of the legal framework to streamline operations from production to export The recently created Value Chain and Cluster Development Taskforce is a concrete step in that direction, signaling progress toward better coordination among producers, processors, regulators, and exporters (see annex B).
The options at the different stages of the value chain can be split into three broad categories: Production, Post-harvest, and Marketing
Production Gourmet olive oil requires sophisticated control of cultivation and of the technology used
To raise production efficiency and align with international standards for planting, irrigation, sizing, and harvest, all actors in the supply chain must be informed and educated, receiving hands-on knowledge and practical know-how This includes reinforcing producer and workforce capacity, with particular emphasis on rural women A six-month action plan could include targeted training programs, on-site coaching, adoption of best practices, and the establishment of monitoring mechanisms to track improvements, ensuring scalable impact across farming operations and value-chain stakeholders.
Action 1 Define and realize a training program adapted to the local context, to sensitize and professionalize local growers
Action 2 Develop and master agricultural production technologies that enable upgrades to agricultural holdings and improvement of olive yields per hectare The development of production technologies and the establishment of sustainable production systems can be accomplished through the “Olive Tree Institute.” 31 The dissemination of research findings to all players in the value chain should enable them to harness the findings and improve their products
Action 3 Establish a team of coaches (guides) to assist in the change of habits in the field Establish a program of visits to the field
Post-harvest processing of olives into oil must meet the highest hygiene and quality standards—from the transport of the olives to the conditioning of the olive oil—to ensure the product retains its properties without alteration These quality standards should be controlled by a specialized institution at every stage of the process The main actions involve hygienic handling and transport of olives, proper processing, and continuous quality verification throughout the production chain.
Action 1 Improve the transport modalities of olives to meet the higher standards and to guarantee transport of the olives in time for the trituration of olives within 24 hours (mechanization, sorting, and crating) and to provide a modern supply chain of olives from producers to oil mills Realize alternative solutions and investments, as needed, to improve the rural road network
Action 2 Improve processing operations (quality control, packaging) to focus on upgrades to oil processing plants for hygiene and food safety and train the relevant cluster agents to obtain gourmet olive oil (for all stages: washing, decanting, centrifuging, and filtering) and establish quality control and tests performed by specialized organizations
To unlock the international market for gourmet olive oil, producers in North West Tunisia must scale production and choose packaging that meets consumer expectations across different regions Market-ready supply should be aligned with demand, ensuring volumes can be delivered consistently and packaging preserves quality while appealing to buyers with clear origin, certifications, and sustainable messaging The potential for North West Tunisia's gourmet olive oil is high, driven by growing global interest in high-quality, artisanal products, making it essential to emphasize provenance, flavor profile, and compliance with international packaging and labeling standards to capture premium prices in export markets.
31 The Olive Tree Institute is the Tunisian research and development center on olive trees
40 but marketing is needed to increase the visibility of Tunisian olive oil, and North West olive oil in particular, 32 with a focus on these activities:
Action 1 Support first-class packaging design at the cluster level to create a perception of
Tunisian gourmet olive oil is exceptional, reflecting the rich terroir and time-honored techniques that define the region’s premium products Embracing local talent and resources—such as students and alumni from the Higher Institute of Arts and Crafts in Siliana—can elevate the brand by delivering fresh, authentic packaging design that resonates with consumers This collaboration not only enhances the product’s market appeal but also strengthens community involvement and regional pride in Siliana and beyond.
Action 2 Implement a market development strategy for gourmet (high-end) products that uses knowledge of customer preferences in high-value markets to create a brand image for olive oil of Tunisian origin An analysis of market trends shows strong potential for value creation in the gourmet market through a strategy of differentiation based on a product (organoleptic characteristics, packaging design, flavors, and so on) and a promotion policy (as health products, for wellness, luxury gastronomy, Mediterranean diet, fair trade) based on innovative and attractive labels
The core of the strategy is identifying producer-controlled distribution networks that target advanced buyers abroad—such as specialized boutiques, delicatessens, luxury hotels and restaurants This initiative will be reinforced by product presentations at international conventions and fairs, including the Sousse International Olive Fair, drawing hundreds of participants from Europe and the Middle East Additional promotional activities, such as school visits and gourmet tastings, will be organized to boost local knowledge and appreciation of gourmet olive oil.
Action 3 Introduce financial products adapted for and accessible to the various actors in the sector, through the preparation and development of a specific financing action plan for the olive oil value chain in the North West, in collaboration with financial institutions, with specific attention to young entrepreneurs
During the June 2016 New York International Olive Oil Competition, no olive oil originating from Tunisia was awarded, despite Tunisia being the world’s fifth-largest producer and a major exporter To meet the international demand for high-quality olive oil, Tunisia must develop and promote a distinctive origin story for its olives, helping the product reach consumers in markets where olive oil is just starting to be adopted and where demand is growing rapidly.
Public-private dialogue (PPD), analytically supported and market-oriented, will be a central instrument of the adopted approach to map optimal value chains and identify gaps in common services These PPDs will particularly help with diagnosing market inefficiencies, aligning public and private stakeholders, prioritizing investments, and accelerating the development and delivery of missing shared services across sectors.
Barriers are identified through documentation and analysis of existing data, and interviews with selected value-chain actors gather insights about the local cluster, determine who is involved, and identify innovators and champions; local actors are registered and potential beneficiaries identified, with baseline information collected (name, telephone number, annual income) to support targeting and monitoring.
Strategic orientation is advanced through targeted travel and visits to engage leading buyers in the most attractive segments of the value chain and to capture their criteria Strategic group meetings with selected agents validate the new value chain strategy, while thematic working groups are formed around identified action lines to strengthen the value chain—focusing on improving production, gaining access to markets, and securing financing—and to confirm ownership of the actions required for the cluster.
• Definition and preparation of the activities through the elaboration of a Value Chain Improvement and