Why Olive Oil Costs Are Rising
Olive Oil: Price Surge Expected as Global Production Slumps
Extra virgin olive oil, a culinary staple in many kitchens, is set to become even more expensive. Industry experts predict prices could surpass £16 per litre in the coming months. The reason for this lies in dramatically reduced global production, now at its lowest level in over ten years.
This year's decline in output primarily stems from cyclical harvests in Greece, Morocco, and Turkey. Moreover, extreme weather patterns, amplified by the climate crisis, have severely impacted olive groves in Spain and Italy. These two countries previously battled devastating heatwaves and droughts.
Data from the International Olive Council (IOC) reveals that global olive oil production stands at approximately 2.3 million tonnes. This signifies a marked decrease compared to last year's challenging harvest (2.5 million tonnes) and a significant drop from 2022's total of 3.4 million tonnes. Consequently, for the second consecutive year, supply shortages will likely intensify price pressures for consumers.
Market Impact
Industry insiders anticipate that popular extra virgin olive oil brands could soon retail for over £16 per litre. This follows on from earlier price hikes this year that brought costs up to around £14 per litre. Meanwhile, exclusive brands like Odysea and Belazu already surpass £18 per litre. Supermarket staples such as Napolina now sell at nearly £15 per litre, with Filippo Berio retailing slightly above £13.
Walter Zanre, head of the UK division of Filippo Berio, a globally recognized olive oil producer, underscores limited supply as the driving force behind this trend. Zanre anticipates further retail price increases in the coming weeks.
The situation has become so acute that in some British supermarkets, olive oil bottles are now placed in security cases to discourage shoplifting. Furthermore, in Spain, olive oil has even been labeled the most coveted item for theft.
Factors Pushing Up Production Costs
According to official UK data, the average litre of olive oil retailed for just over £8 in March, reflecting a sharp 39% increase year-on-year. Costs have essentially doubled since 2018. The continuous rise can be attributed to multiple factors, with the destabilizing effects of extreme weather events due to the climate crisis playing a significant role.
While it's hoped that more predictable weather patterns will offer some relief in Italian and Spanish olive groves, where the trees are currently in bloom, a drastic reduction in output elsewhere is cause for concern. Harvest volumes could decrease by as much as 60% in Greece and by over half in Turkey as these countries rebound from bountiful harvests in 2023.
The Economic Ripple Effect
Soaring olive oil prices are not occurring in isolation. They directly impact the broader food industry. Restaurants, caterers, and processed food manufacturers are among those who rely heavily on this ingredient and now face rising input costs. This will inevitably affect consumer prices across a wide range of food products.
The Italian trade body, Associazione Granaria di Milano, highlights that bottlers have been replenishing depleted stocks, a factor that has contributed to renewed volatility in wholesale prices. This happened after a brief period of stability following the sharp price increase in January.
"When we get to the other side of the summer it could light the blue touch paper and [wholesalers] will be able to charge whatever they like for what is left," Zanre warns.
Zanre indicates that Filippo Berio has, for the second consecutive year, turned to South America for additional olive oil supplies. However, this year is proving more challenging, with Argentina and Chile imposing tighter supply restrictions.
Climate Change and Future Harvests
The olive tree is traditionally a robust and resilient plant. Nonetheless, the frequency and intensity of climate-related shocks are beginning to overwhelm even this hardy species. Olive harvests are highly weather-dependent, susceptible to fluctuations in temperature and rainfall patterns.
Prolonged drought conditions can severely reduce yields, while sudden frosts or torrential rains during the flowering or fruiting phases can also cause significant damage. Spain, Italy, Greece, Morocco, and Turkey, countries that dominate global olive oil production, are all witnessing the accelerating impacts of climate change.
Unfortunately, experts project that the volatility experienced in olive oil markets in recent years may well become the new norm. This calls for greater focus on adaptive measures and more sustainable olive-growing practices.
The Search for Alternatives
Both producers and consumers are naturally exploring alternatives in the face of escalating olive oil prices. Consumers may increasingly opt for substitutes like sunflower oil or rapeseed oil, although these too are experiencing price increases due to factors including the war in Ukraine.
Some producers are experimenting with blending with small quantities of other seed oils in an attempt to manage costs and stretch supplies. Furthermore, there is a growing interest in exploring lesser-known sources of edible oils derived from sources like avocados or even the byproducts of the winemaking industry.
While these alternatives may help cushion the blow of skyrocketing olive oil prices to an extent, it's widely acknowledged that the distinct flavor and culinary properties of extra virgin olive oil cannot be easily replicated. As a result, the demand for this 'liquid gold,' despite its premium price, is unlikely to disappear entirely.
Protecting Quality in a Challenging Market
In a climate of scarcity and rising costs, consumers and producers alike are becoming even more conscious of olive oil quality. Sadly, when prices surge, there is an increased risk of fraudulent practices, such as adulteration or mislabeling.
Adulteration often involves blending high-quality extra virgin olive oil with inferior grade olive oil or even with entirely different oils. Mislabeling could involve incorrect country of origin or deliberately misleading consumers about the harvest year. Such practices not only erode consumer trust but also undermine the fair competition that is essential for a healthy market.
To combat this, governing bodies and reputable producers are emphasizing the importance of traceability and transparency. New technologies, such as blockchain, have the potential to track olive oil throughout the supply chain with unprecedented precision, assuring consumers of its provenance and integrity.
Rigorous testing and certification schemes are also crucial for identifying authentic extra virgin olive oil and protecting its reputation. However, some producers fear that with the industry already under immense pressure, the additional costs involved in such schemes could be difficult to absorb.
The Power of Informed Choices
Consumers can play their part by seeking clear and verifiable information on product labels. Ideally, the harvest year, specific region of origin, and details about production methods should be clearly displayed. Choosing reputable brands with a track record of commitment to quality is also essential.
While the price may seem like the overriding factor for many shoppers, it's important to be wary of extra virgin olive oil offered at suspiciously low prices. These deals could be a warning sign of quality issues or even adulteration.
Additionally, exploring alternative olive oil varieties might prove fruitful. Italy, Spain, and Greece are the best-known producers, but countries like Portugal, Tunisia, and Australia are also producing excellent olive oils that may be more readily available or offer better value at this time.
Consumer awareness about the unique qualities of extra virgin olive oil is also essential. The term "extra virgin" denotes the highest quality olive oil, extracted solely through mechanical means with no heat or chemicals applied. It boasts an exceptional flavor profile, superior nutritional value, and distinctive aromas. Recognizing its value and justifying the premium price is crucial.
What Does the Future Hold?
The outlook for the olive oil industry is a complex mix of challenges and opportunities. Climate change presents a major threat, requiring farmers to adopt more resilient olive-growing practices and explore potential new production areas. Investment in research and innovation will be vital in addressing these issues.
At the same time, the enduring appeal of high-quality olive oil, particularly as part of a healthy Mediterranean-style diet, is likely to fuel continued demand. However, adjustments to pricing, potentially more diversified blends, and enhanced focus on product integrity will all be necessary in this shifting landscape.
Beyond the Bottle: Culinary Uses of Olive Oil
Olive oil's versatility in the kitchen makes it an indispensable ingredient for chefs and home cooks alike. Its vast array of flavor profiles, ranging from mild and buttery to grassy and peppery, allows for a spectrum of culinary uses.
Extra virgin olive oil, with its vibrant flavor and aroma, is ideal for finishing dishes just before serving. It can elevate simple salads, drizzle beautifully over grilled vegetables, or enhance the flavor of freshly baked bread. It's also an excellent base for dips, marinades, and dressings.
Lighter grades of oil, with their higher smoke point, are suitable for cooking and sautéing. These are preferable for recipes that involve high heat, and they lend themselves well to stir-fries, pan-frying, or even roasting. It's important to remember that prolonged exposure to very high heat can degrade olive oil's nutritional value and flavor.
While olive oil may not be the most prevalent ingredient in baked goods, it can add a unique richness and depth of flavor to cakes, cookies, and quick breads. In certain recipes, it offers a healthier alternative to butter.
Health Benefits of Olive Oil
Research consistently highlights olive oil's role as a cornerstone of a healthy, balanced diet. As a key component of the acclaimed Mediterranean diet, extra virgin olive oil is rich in monounsaturated fats, which play a role in lowering LDL ("bad") cholesterol and raising HDL ("good") cholesterol. This can benefit cardiovascular health.
Furthermore, olive oil is a potent source of antioxidants and anti-inflammatory compounds. These protective substances may help reduce the risk of chronic diseases, including heart disease, type 2 diabetes, and some forms of cancer.
It's important to note that not all olive oils are equal in terms of health benefits. Extra virgin olive oil, obtained through the first pressing and without the use of chemicals or heat, contains the highest concentration of polyphenols and antioxidants.
Storing Olive Oil for Optimal Quality
Like wine, It is a perishable product. Proper storage is vital to preserve its flavor, freshness, and nutritional value. Here are some key tips:
Light: Exposure to light degrades olive oil, so keep bottles in a cool, dark cupboard. Opt for dark-tinted glass or opaque containers for added protection.
Heat: Aim for a storage temperature between 14°C and 18°C (57°F and 64°F). Avoid extremes, including prolonged storage above the stove or near a refrigerator.
Air: Keep containers tightly sealed to prevent oxidation. Once opened, olive oil is best consumed within a few months.
A Word of Caution
While olive oil boasts numerous health benefits, it's still a calorie-dense fat. Moderation is key, and the recommended serving size per day is around two tablespoons.
The Cultural Significance of Olive Oil
Beyond its culinary and economic value, olive oil holds deep cultural and symbolic meaning, especially in Mediterranean regions. The olive tree, a symbol of peace, longevity, and resilience, has been intertwined with human civilization for millennia.
In ancient Greece, olive oil was not only a staple food but also used for medicinal purposes, beauty rituals, and even as fuel for lamps. Victorious athletes were crowned with wreaths of olive leaves, and olive oil was a prized offering to the gods.
The significance of olive oil is reflected in art, literature, and religious traditions. It remains a central element in many cultural celebrations and a symbol of hospitality across the Mediterranean.
Embracing Smaller Producers
While large-scale production dominates the global market, there's a growing appreciation for smaller, artisanal producers who focus on craftsmanship and quality. These producers often champion traditional olive-growing practices, cultivating unique, regional olive varieties and prioritizing sustainable methods.
Exploring olive oils from boutique producers offers a richer and more diverse taste experience. It also supports local communities, helping preserve traditional knowledge and ensuring a future for small-scale olive farming.
Savoring the Experience
Appreciating fine olive oil involves engaging all your senses. Before tasting, take a moment to smell the oil, noting its aromas, which could range from fruity and floral to herbaceous and grassy.
When tasting, pay attention to its texture, flavor profile, and level of pungency or pepperiness. Quality extra virgin olive oil should offer a complex interplay of flavors, with hints of bitterness, sweetness, and a lingering peppery finish.
Experiment with different olive oils to discover flavor profiles that resonate with your palate. Don't be afraid to drizzle generously, as a true olive oil enthusiast enjoys the robust flavor front and center.
A Culinary Investment
As olive oil prices continue their upward trend, it's easy to perceive them as a luxury item. However, considering the dedication that goes into producing a premium bottle, the value proposition starts to become clear.
From the careful tending of olive groves to the meticulous harvesting and extraction process, high-quality extra virgin olive oil embodies a true labor of love. It transforms everyday meals, elevates simple ingredients, and provides a generous dose of the coveted Mediterranean lifestyle.
Investing in a good bottle of extra virgin olive oil is ultimately an investment in taste, in culinary creativity, and in supporting a sustainable food system with deep historical roots.
