Grupo SOS Renames Itself Deoleo and Bets on Olive Oil
SOS Corporación Alimentaria, the Spanish group behind Carbonell, Koipe and Bertolli, is now called Deoleo. The name change was forced by the sale of its rice business, SOS brand included, to Ebro Foods for €205 million, and the group has spent this month rolling out its new corporate identity. Here is what changed, why the world’s biggest olive oil seller needed a new name, and what it means for the bottles on your shelf.
What happened
At the annual shareholders’ meeting on 9 June, chairman Mariano Pérez Claver said the group had come through a “traumatic” period of financial stabilization that forced it to raise fresh capital, simplify its structure and give up activities it would otherwise have kept, rice above all. The rice division went to Ebro Foods for €205 million. Because the deal included the SOS brand itself, a century-old Spanish rice name, the group could no longer trade under it.
The sale is large. According to the Spanish press, SOS is selling its whole rice business except Arroz SOS Sevilla and its companies in French Guiana and Mexico, handing over plants in Valencia, the Netherlands and the United States, and 431 employees are leaving the group with it.
The board chose Deoleo, Pérez Claver explained, because it refers directly to the business the group is keeping, olive oil. It is simple, easy to recognize in the mostly English and Italian speaking markets where the company sells, and meant to suggest tradition. Olive Oil Times reports that the name beat four other proposals and was picked partly because it is easy to pronounce anywhere and sits close to olive oil’s Latin roots.
The company behind the name
| Deoleo at a glance | Detail |
|---|---|
| Olive oil brands | Carbonell, Bertolli, Carapelli, Koipe, Sasso |
| Rice business | Sold to Ebro Foods for €205 million, SOS brand included |
| Debt | Down from about €1 billion to €887 million in March, after last year’s refinancing |
| Workforce | Down 47 percent in two years, to 1,531 employees |
| First quarter of 2011 | Net income of €8.14 million, the first quarterly profit in three years |
| Ebro Foods | Holds 9.33 percent of Deoleo and two board seats |
The numbers explain the new name as much as the rice sale does. Two years ago the group removed its former managers, the brothers Jesús and Jaime Salazar, over an alleged diversion of more than €230 million; that case is still being investigated at Spain’s National Court, where the judge has set bail of €360 million for the Salazars. Since then the company has been selling assets, cutting staff and paying down debt. Its director general since January, Jaime Carbó, came from Ebro. The rename is one of his first big decisions.
What is left is the largest olive oil seller in the world, now built around olive oil first and everything else second. Bertolli, bought from Unilever in 2008 for €630 million, sits next to Spain’s Carbonell and Koipe and Italy’s Carapelli. Olive oil was already doing the heavy lifting in the group’s results back in 2007. Now it is the group.
What it means for buyers
- Nothing changes on the shelf. Carbonell stays Carbonell and Bertolli stays Bertolli. Corporate names rarely appear on the front of a bottle.
- The brand is not the origin. An Italian-sounding name owned by a Spanish group can bottle oil from several countries. The origin line on the back label is the part that tells you where the olives grew.
- More change may follow. Spanish financial press reports that Ebro Foods is waiting to see Deoleo’s new business plan before considering a merger. For the moment that is talk, not a deal.
A big bottler’s real skill is not pressing olives, it is blending. The job is to make a bottle bought in March taste like one bought in October, whatever the harvest did and wherever the cheapest good oil came from that month. That consistency is what the brand name promises. It is a promise about taste, not about place, and a company that now lives or dies on olive oil will guard it closely. If you want a place, buy a single-origin oil and read the grade and origin before the logo.
Sources
- Financial Food: SOS pasa a denominarse Deóleo tras el acuerdo con Ebro Foods, 9 June 2011
- RRHH Digital: Grupo SOS afronta una nueva etapa como Deóleo, 9 June 2011
- Olive Oil Times: Spanish Food Giant Grupo SOS Changes Name to Deoleo, 27 June 2011 (archived copy)