`Olive Oil Sales Slump in Spain and Italy Amid Rising Prices - Olive Oil Times
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Olive Oil Sales Slump in Spain and Italy Amid Rising Prices

By Paolo DeAndreis
Nov. 20, 2023 18:51 UTC

Extra vir­gin olive oil sales are slow­ing in Spain and Italy, the world’s two largest olive oil con­sumers, as prices rise and house­holds reduce con­sump­tion.

The rise in extra vir­gin olive oil prices has largely been attrib­uted to low expec­ta­tions for a sec­ond con­sec­u­tive har­vest paired with a dearth of olive oil stocked from the pre­vi­ous crop.

New research on the sale of oils and fats in Spain found that extra vir­gin olive oil sales dropped by 11 per­cent in the first nine months of 2023, while vir­gin olive oils grew 69 per­cent.

See Also:High-Priced Olive Oil Fuels Thefts in Greece, Farmers Respond

According to gov­ern­ment data, more than half of the olive oil pro­duced in Spain is extra vir­gin.

The study, con­ducted by the researchers at the University of Jaén, also showed an 86 per­cent increase in olive pomace oil sales.

According to the research, the approach of Spanish con­sumers is shift­ing toward lower grades of olive oil and smaller, more afford­able bot­tles and con­tain­ers. Other cheaper oils, such as sun­flower oil, are gain­ing in pop­u­lar­ity.

The European Union obser­va­tory noted how extra vir­gin olive oil prices at ori­gin sky­rock­eted in Spain dur­ing the 2022/23 crop year. In the bench­mark mar­ket of Jaén, the price at ori­gin rose from €4.16 per kilo­gram in October 2022 to €8.32 per kilo­gram one year later.

During the pre­vi­ous crop year, extra vir­gin olive oil prices remained more or less sta­ble, between €3.10 and €3.95 per kilo­gram. They ran only slightly above the five-year aver­age of €2.85 per kilo­gram.

Similar trends are reported for extra vir­gin olive oil prices in Italy. In Bari, the country’s bench­mark mar­ket, the price at ori­gin rose from €5.08 per kilo­gram in October 2022 to €9.08 one year later.

In the last few weeks, Italian extra vir­gin olive oil prices cooled to €8.10 per kilo­gram, but indus­try observers warn that prices could rise again.

While the price increased in both mar­kets, extra vir­gin olive oils in Spain and Italy are sold at sim­i­lar prices at retail.

European Union experts believe prices will rise fur­ther after the har­vest is com­plete.

“At the begin­ning of the cam­paign, there is a spe­cific moment in which the sup­ply will be greater than the demand in the short term. That’s when prices will drop,” Juan Vilar, a strate­gic con­sul­tant for the olive oil sec­tor, told Olive Oil Times.

“Then, as demand increases [in reac­tion to falling prices and as the har­vest ends, mean­ing olive oil stocks reach their high­est point], it is very likely that prices will rise again,” he added.

With the back­drop of reprieve from ris­ing prices, the olive oil group of the Italian Association of the Edible Oil Industry (Assitol) said it antic­i­pates national pro­duc­tion to reach 289,000 tons in the 2023/24 crop year.

If it comes to fruition, the yield would be about 20 per­cent above the pre­vi­ous sea­son but slightly more than the five-year aver­age of 275,000 tons.

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Still, these yields are sig­nif­i­cantly below the approx­i­mately one mil­lion tons of olive oil the Italian indus­try sells yearly on the domes­tic and inter­na­tional mar­kets.

As a large part of the imported extra vir­gin olive oil comes to Italy from Spain, the latter’s low pro­duc­tion fig­ures will directly impact the Italian olive oil mar­ket.

Still, Italian pro­ducer asso­ci­a­tions believe that the tur­moil might increase con­sumer aware­ness about extra vir­gin olive oil’s organolep­tic qual­i­ties and health ben­e­fits.

“This anom­alous cam­paign is the per­fect oppor­tu­nity to reflect upon olive oil con­sump­tion,” Andrea Carrassi, Assitol’s gen­eral direc­tor, told Olive Oil Times.

“Moreover, it is an oppor­tu­nity to repo­si­tion extra vir­gin olive oil [on the mar­ket] in the com­ing years, eras­ing once and for all this label of com­mod­ity that, unfor­tu­nately, has been attrib­uted to extra vir­gin olive oil despite its extra­or­di­nary char­ac­ter­is­tics,” he added.

The asso­ci­a­tion high­lighted how large retail­ers sold the prod­uct in Italy at bar­gain prices for many years. Supermarkets nation­wide used to attract cus­tomers by offer­ing pro­mo­tional prices for extra vir­gin olive oil, which crit­ics viewed as arti­fi­cially low and recouped those losses with sales of other higher-mar­gin prod­ucts.

Industry observers, long crit­i­cal of this tac­tic, believe it affected con­sumer aware­ness about extra vir­gin olive oil’s qual­ity.

“The gen­eral per­cep­tion is that the price of olive oil is low because its value is low, thus encour­ag­ing con­sumers to seek the low­est price,” Carrassi said. ​“Now the pic­ture appears com­pletely dif­fer­ent.”

“The reduc­tion in olive oil quan­ti­ties and the increase in prices, within a sce­nario of infla­tion and eco­nomic uncer­tainty, could lead con­sumers away from this prod­uct, ori­ent­ing them towards less expen­sive alter­na­tives,” he added.

Recent research pub­lished by the Circana busi­ness obser­va­tory, cited by Il Sole 24 Ore, noted how pro­mo­tional olive oil sales in the first ten months of 2023 dropped to €69 mil­lion in value, €28 mil­lion less than the pre­vi­ous year.

According to Assitol, the dis­count strat­egy is now fal­ter­ing because of the new mar­ket con­di­tions.

“Is it really just a cost prob­lem, or is it time to change our way of con­sid­er­ing extra vir­gin olive oil,” Carrassi said.

“In our opin­ion, olive oil is much more than a sim­ple condi­ment; it is cer­tainly not just another dietary fat,” he added. ​“It is a true elixir of health, and it should be com­mu­ni­cated and per­ceived as such, high­light­ing how unique it is com­pared to other fats and condi­ments.”

David Granieri, pres­i­dent of Unaprol, Italy’s national pro­duc­ers’ asso­ci­a­tion, agreed. ​“The time of qual­ity olive oil sold below cost is finally over,” he wrote in a note.

According to Granieri, it is cru­cial to help the con­sumers ​“under­stand how sig­nif­i­cant it is to con­sume qual­ity extra vir­gin olive oil and how impor­tant it is to pay its fair price, which is the cur­rent price.”

Granieri also noted how a fair price would ​“allow the whole prod­uct chain to con­tinue work­ing and keep wav­ing the flag of Italian qual­ity.”

Assitol and Unaprol are ask­ing for a broad insti­tu­tional com­mu­ni­ca­tion cam­paign to raise aware­ness.

“We need to make con­sumers under­stand that this prod­uct is worth more because it deliv­ers more in terms of well-being and taste,” Carrassi said.

“If we exam­ine the actual extent of the price increases, it amounts to just a few cents more per day. Our health is cer­tainly not worth so lit­tle,” he added.

Unaprol remarked how con­sumers in Italy started to reduce their extra vir­gin olive oil con­sump­tion years ago.

“Today, each Italian con­sumes 7.1 kilo­grams of olive oil each year, less than the 11.4 kilo­grams reported in Spain and the 10.3 kilo­grams in Greece,” Unaporl said. ​“It is far less than what hap­pened in the first years of the 21st cen­tury when Italian con­sump­tion was 12 kilo­grams per capita.”

According to the International Olive Council, Italy’s olive oil con­sump­tion declined in the last five years to an aver­age of 492,000 tons com­pared with the 566,000 reported on aver­age in the pre­vi­ous five years.

In Spain, the aver­age of the last five years was 519,000 tons against the 486,000 tons reported as aver­age in the pre­vi­ous five years.

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