`Spanish Consumers Adapt to Olive Oil Price Surge - Olive Oil Times
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Record Olive Oil Prices Drive Down Consumption in Spain, but Loyalty to Category Remains

By Daniel Dawson
Jan. 25, 2024 09:19 UTC

After a slight reprieve, olive oil prices in Spain have reached new records, both at ori­gin and in super­mar­kets.

According to Infaoliva’s price obser­va­tory, extra vir­gin olive oil prices at ori­gin hit record highs again in mid-January, reach­ing €8.988 per kilo­gram, a 68 per­cent increase com­pared to last year. Prices for vir­gin olive oil and lam­pante olive oil also rose to record highs.

The dra­matic increase comes after three months of price decreases at ori­gin as the start of the har­vest brought fresh batches of lam­pante, vir­gin and extra vir­gin olive oil to the mar­ket, some­what alle­vi­at­ing the ongo­ing imbal­ance between sup­ply and demand that has resulted in the his­toric price hikes.

However, fears that Spanish olive oil pro­duc­tion in the 2023/24 crop year may once again fail to exceed 700,000 tons – down from ini­tial expec­ta­tions of 765,362 tons – paired with a reluc­tance from con­sumers to turn away from the cat­e­gory and the mod­er­ate rain­fall dur­ing the win­ter have resulted in prices at ori­gin soar­ing once more.

See Also:Spain Set to Eliminate Value-Added Tax on Olive Oil Sales

Rising prices at ori­gin have also resulted in a 69 per­cent price hike in extra vir­gin olive oil at super­mar­kets in 2023, on aver­age, accord­ing to Facua.

The con­sumer price watch­dog sur­veyed the prices of 18 extra vir­gin olive oil brands across six major super­mar­ket chains and found that the aver­age price for a liter of extra vir­gin olive oil had risen from €6.91 in the first month of 2023 to €12 in January 2024.

As a result of two years of below-aver­age har­vests, olive oil con­sump­tion has fallen dra­mat­i­cally in Spain. However, research from the International University of Andalusia and Grupo Oleícola Jaén found that Spanish con­sumers are adapt­ing to the lower olive oil avail­abil­ity and higher prices.

“There has been a drop in domes­tic con­sump­tion of approx­i­mately 47 per­cent,” Juan Vilar, an inter­na­tional agro­nomic ana­lyst and chief exec­u­tive of con­sul­tancy Vilcon who led the study, told Olive Oil Times. ​“Per capita olive oil con­sump­tion has fallen approx­i­mately 5.5 kilo­grams.”

He added that Spain is far from the only coun­try that has seen olive oil con­sump­tion fall due to higher prices and lower avail­abil­ity. By his cal­cu­la­tions, per capita global con­sump­tion of olive oil has declined from 420 to 320 grams per annum.

“On a global level, this is the first time that olive oil has not reached one per­cent of total ani­mal and veg­etable fat con­sump­tion,” Vilar said. In a typ­i­cal year, olive oil makes up three per­cent of the cat­e­gory.

However, the study demon­strates that con­sumers are not shift­ing away from the olive oil cat­e­gory, with the researchers see­ing an 11 per­cent decrease in the sale of other refined edi­ble oils, such as corn oil or sun­flower oil, paired with far more mod­er­ate price increases.

“There is insuf­fi­cient olive oil avail­able to cover demand,” Vilar said. ​“But the demand has not fallen much. The num­ber of units of olive oil sold remains very sim­i­lar to pre­vi­ous years.”

“For con­sumers to remain loyal to the olive oil cat­e­gory, they are con­sum­ing less olive oil and buy­ing smaller for­mats,” he added,

This find­ing was reflected in the study, which found the most sig­nif­i­cant drop in extra vir­gin olive oil sales in con­tain­ers of one liter or more, with many super­mar­kets aban­don­ing the typ­i­cal five-liter con­tain­ers pre­vi­ously sold.

“Consumers have also been mov­ing down the cat­e­gory list,” Vilar said, with habit­ual extra vir­gin olive oil buy­ers shift­ing to vir­gin and vir­gin pur­chasers chang­ing to refined olive oil cat­e­gories.

“Lastly, sales of olive pomace oil have grown by approx­i­mately 160 per­cent dur­ing 2023,” Vilar said.

Usually, Spain exports 80 per­cent of the olive pomace oil it pro­duces. However, the low pro­duc­tion lev­els mean about 70 per­cent of olive pomace oil pro­duc­tion was sold domes­ti­cally in 2023. ​“People don’t want to leave the olive oil cat­e­gory,” he said.

Looking ahead, Vilar said he expects prices at ori­gin to remain sta­ble for the time being. ​“If prices rise, it will not be by much, but they will not fall,” he said.

The three main fac­tors affect­ing the prices will be whether the har­vest meets expec­ta­tions, the evo­lu­tion in con­sumer demand and the weather dur­ing the spring and sum­mer; cli­matic con­di­tions in Andalusian olive groves in May will go a long way in deter­min­ing the tra­jec­tory of prices for the rest of 2024.

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