Why is Worldwide Consumption of Olive Oil Declining?

Olive oil prices across all classifications are down and recent International Olive Council data shows that imports into major importing countries such as the USA, China and Australia are down. Even in Spain, the world’s largest producer, there are reports of reduced consumption of olive oil, with the exception of extra virgin olive oil which has shown a slight rise. The data provided generally measures the tonnage of olive oil traded, data of value of oil traded is scarce. It may well be that while tonnage is down, value may be up indicating the higher price and volume of extra virgin olive oil sold.

The downward trend in olive oil trade by tonnage can be for a number of reasons.

Perception

The perception of the value and integrity of olive oil among consumers has been affected by the publicity concerning allegedly fraudulent trade in olive oil publicised across all media. Confused, consumers are turning to other vegetable oils for their household needs.

Polyphenols

The trend towards higher polyphenols in extra virgin olive oil, pushed as a measure of quality and shelf-life by some producer associations, is resulting in a product which tastes too bitter and ‘hot’ for most consumers.

Price

The dual trends of increased production of extra virgin olive oil worldwide and the demand for higher prices from producers is setting prices too high for consumers with diminished disposable income.

Production

All the above is leading to an oversupply of olive oil, especially the higher priced extra virgin olive oil. This in time should lead to a reduction in price to consumers and increased consumption. Producers may not be happy with this and need to adjust production costs – perhaps harvesting a little later to increase yield and produce a greater range of less robust extra virgin olive oil for consumer palates.

Time to Test Olive Oils against Other Vegetable Oils

One must question the logic of the continuous assault on imported olive oils that is taking place in Australia, New Zealand and the United States. While the main reason promulgated for this New World campaign is to increase the quality of olive oil supplied to consumers, many see it as a thinly disguised attempt to increase the sales of locally produced extra virgin olive oils. 

With the global access to local news and commentary, the danger of this approach is that the global brand of olive oil is permanently damaged and it will take more than a few new producing countries to repair the damage. The sales of olive oil are very price sensitive as we are seeing in Greece and Italy.

It is time we as an industry encouraged the comparison of the positive attributes olive oil – refined and extra virgin – with other vegetable oils, and in doing so, boost the global olive oil brand rather than tainting it.

Olive oil imports into Australia back up again.

Imports of olive oil into Australia in January 2012 increased by almost 1200 tonnes
compared with the same month in 2011. This follows substantial dips in imports in November and December.

Overall imports into Australia dropped by 10% in the four months to January 2012. Canada showed an 18% decrease in imports and the USA a 10% increase over the same period.
(Source IOC)