Finding Balance in a Changing Sector Yields Success for Portuguese Exporter

Producing and export­ing award-win­ning extra vir­gin olive oil in Portugal is a del­i­cate bal­anc­ing act, accord­ing to Manuel Norte Santo, an export man­ager of Establecimiento Manuel Silva Torrado.

The com­pany started in 1878 when Manuel da Silva Torrado, a mer­chant from Castelo Branco, about 185 kilo­me­ters north­east of Lisbon, went to the cap­i­tal to sell olive oil in the city’s mar­kets.

Since then, the com­pany has become a sig­nif­i­cant pro­ducer and exporter with 200 hectares of olive groves, two mills in Alentejo, the coun­try’s largest olive-grow­ing region, and a global pres­ence in super­mar­kets and restau­rants.

As the com­pany has evolved, so has the Portuguese olive oil indus­try. The com­bi­na­tion of cap­i­tal flight from Spain dur­ing the 2008 finan­cial cri­sis and the con­struc­tion of the Alqueva dam in Alentejo trans­formed the olive-grow­ing land­scape.

Norte Santo, whose fam­ily owns and runs the com­pany, became one of two export man­agers seven years ago and has seen the sec­tor’s evo­lu­tion first­hand.

“I expe­ri­enced the big boom of Portuguese pro­duc­tion,” he told Olive Oil Times. ​“Because of the Alqueva dam, many play­ers came to Portugal and invested in super-inten­sive [super-high-den­sity] olive groves.”

Historically, Portugal was com­posed of tra­di­tional olive groves. In the five years lead­ing up to the cri­sis, the coun­try pro­duced an aver­age of 37,000 tons of olive oil each year.

Since then, annual olive oil pro­duc­tion has tripled as many high-den­sity and super-high-den­sity farms entered pro­duc­tion. Portugal pro­duced a record-high 206,200 tons of olive oil in the 2021/22 crop year, and Norte Santo expects the coun­try to pro­duce 150,000 tons in 2023/24.

Est. Manuel Silva Torrado has two inten­sive groves with Arbequina, Galega, Hojiblanca and Picual olives. A third super-inten­sive grove was recently planted solely with Arbequina and is not yet pro­duc­ing but will even­tu­ally account for about 30 per­cent of the company’s yield.

“We also buy a lot of olives from dif­fer­ent pro­duc­ers to have the oppor­tu­nity to have dif­fer­ent vari­eties, and then we can make dif­fer­ent batches and exper­i­ment with dif­fer­ent blends of olive oils,” Norte Santo said.

The com­pany buys Galega olives for the company’s mill in north­ern Alentejo. Norte Santo esti­mates that these make up about 80 per­cent of pro­duc­tion at that mill. They also buy the tra­di­tional Portuguese vari­eties of Cobrançosa, Cordovil and Azeiteira, and Arbequina and Picual, the two most-grown vari­eties world­wide.

“But we mostly buy Portuguese vari­eties,” Norte Santo said. ​“We must guar­an­tee a cer­tain pro­file to our olive oils so they carry a Portuguese tra­di­tion and fla­vor.”

When he joined the com­pany in 2016, Norte Santo was man­dated to expand exports beyond the tra­di­tional mar­kets of Brazil, Europe and North America.

“We are try­ing to export this idea that Portugal has high-qual­ity extra vir­gin olive oil because it has the most mod­ern plan­ta­tions, but we are a small coun­try,” Norte Santo said. ​“We don’t have the tools that Italy and Spain have, so it’s not easy to export that con­cept.”

According to Norte Santo, many large Portuguese pro­duc­ers sell in bulk to Spanish and Italian brands, which blend and re-export the olive oil. He said Est. Manuel Silva Torrado is among the com­pa­nies try­ing to change this export par­a­digm.

“It’s impor­tant to under­stand that we need to invest in the brands, invest in this con­cept that Portugal has amaz­ing olive oil,” he said. ​“I think that we are mak­ing progress.”

Est. Manuel Silva Torrado has a long his­tory of export­ing Portuguese olive oil under Portuguese brand­ing. The Saloio brand, which earned a Gold Award at the 2023 NYIOOC World Olive Oil Competition, was reg­is­tered in 1925, with its Santa María brand estab­lished shortly after in 1927.

Norte Santo said both of these brands have a long his­tory in coun­tries with sig­nif­i­cant Portuguese dias­po­ras, help­ing to estab­lish the country’s extra vir­gin olive oil in some of the world’s largest con­sumers.

Different ver­sions of Saloio are pri­mar­ily sold in Asia and North America, while the Santa María brand is the company’s flag­ship oil in Brazil.

“We have a lot of his­tory in coun­tries includ­ing Brazil, the United States and Canada,” he said. ​“We came here with the Portuguese immi­gra­tion that hap­pened in the mid­dle of the cen­tury. Our brands come with these peo­ple to those mar­kets, and we are still very strong brands there.”

While work­ing to main­tain shelf space in these estab­lished mar­kets, Norte Santo set his sights on the lucra­tive East Asian mar­ket. Shortly after arriv­ing, he trav­eled to China and Japan, which con­sume a com­bined 100,000 tons of olive oil each year.

Upon his first impres­sion, Norte Santo said there was a dearth of knowl­edge in both coun­tries about its health ben­e­fits and how to cook with olive oil.

“There was a lot of knowl­edge that we needed to pass to the con­sumer about the prod­uct, then about our coun­try, Portugal, and then we could present our brands,” he said.

Part of the bal­anc­ing act of being a large-scale exporter is meet­ing the demands of con­sumers with highly var­ied expec­ta­tions for the prod­uct. Norte Santo’s job is to iden­tify which Saloio blends pro­duced by the com­pany each year are best for each of their main export mar­kets.

“A lot of the year, our blends are not the same, so we need to iden­tify which blends we can assign to dif­fer­ent mar­kets to sat­isfy dif­fer­ent clients,” he said.

Norte Santo said East Asian con­sumers want ​“extra vir­gin olive oil with bit­ter and spicy notes. The blend we sell to these coun­tries has to be very good and green, with many aro­mas and fla­vors that other coun­tries don’t require.”

As a result, blends heav­ily based on the mild Galega, which Norte Santo described as ​“a soft olive oil, even sweeter than Arbequina,” do not sell well in China, Japan or South Korea, with a far more pro­nounced pref­er­ence for blends heavy in Picual and Cobrançosa.

On the con­trary, he said North American and Brazilian con­sumers are look­ing for more del­i­cate, sweeter extra vir­gin olive oils.

“The Portuguese com­mu­nity in the United States talks a lot about the Galega because it’s the most known Portuguese vari­ety,” he said. ​“Americans like this neu­tral olive oil because it does­n’t directly affect some fla­vors when the cook­ing.”

Meanwhile, in Brazil, Norte Santo said being com­pet­i­tive on price remains the main focus, though this is chang­ing.

“In Brazil, it’s all about the price,” he said. ​“They want extra vir­gin olive oil, and that is it. It’s a dif­fer­ent mar­ket. People don’t yet view the qual­ity of the olive oil like they do in the United States or Asia.”

He attrib­utes part of this to fluc­tu­a­tions in the local cur­rency, which makes it dif­fi­cult for exporters to main­tain a con­sis­tent price, and the long his­tory of com­pa­nies import­ing olive oil in bulk to bot­tle or blend with other edi­ble oils and sell under Portuguese-sound­ing brands.

Back in Portugal, Norte Santo said the com­pany faces entirely dif­fer­ent chal­lenges. Chief among them is find­ing enough peo­ple for the har­vest and stem­ming the flow of young peo­ple from the coun­try­side to urban areas.

“We have an old pop­u­la­tion, so it is dif­fi­cult to iden­tify groups of peo­ple will­ing to come to the plan­ta­tions to do the har­vest,” he said.

According to Norte Santo, the com­pany has recently hired immi­grants arriv­ing in the coun­try who are will­ing to do the work.

However, the immi­grant work­force is highly tran­si­tory and may not return for the fol­low­ing har­vest. As a result, the com­pany has to train a new set of work­ers to har­vest the olives each year, which takes time and resources.

Another chal­lenge the com­pany faces is an increas­ing resent­ment from local pop­u­la­tions to the rise in high-den­sity and super-high-den­sity plan­ta­tions in Alentejo.

Norte Santo said peo­ple who oppose these types of plan­ta­tions cite a com­bi­na­tion of their visual impact on the land­scape, per­ceived use of water dur­ing times of drought and eco­nomic and social impact on tra­di­tional olive grow­ers.

“Some peo­ple say that we are destroy­ing the envi­ron­ment of Alentejo because we plant inten­sive olive groves,” he said. ​“This is cre­at­ing polit­i­cal noise that is not good for the sec­tor. It’s a chal­lenge to explain to the peo­ple what we are doing, why we are doing it and the advan­tage of these types of plan­ta­tions in the region.”

“They think we are using more water than we need, which I would say is not true,” he added, cit­ing other more water-inten­sive crops, such as almonds, as larger water con­sumers than high-den­sity and super-high-den­sity olive grow­ers.

“They tell us we are tak­ing out tra­di­tional pro­duc­ers, but this is also not true since we plant in areas that do not have tra­di­tional olive groves,” Norte Santo said.

“Traditional pro­duc­ers are very impor­tant,” he added. We need to guar­an­tee that we have the Portuguese iden­tity and Portuguese vari­eties. We need to value these vari­eties. Indeed, we pay more for Portuguese vari­eties than Arbequina because they are rare.”

“We need to give value to those pro­duc­ers and coex­ist in the sys­tem,” Norte Santo con­tin­ued. ​“We can­not ignore the future, and if we do not plant at high-den­sity and super-high den­sity, with the lack of human resources we have in Portugal, we don’t have a future in the olive oil sec­tor.”

Norte Santo said social media helps feed some of these extreme posi­tions and spread nar­ra­tives that he believes are false about the role of high-den­sity and super-high-den­sity plan­ta­tions in the region.

“It’s impor­tant to fight these extreme posi­tions and explain the tech­ni­cal issues of the plan­ta­tions sur­round­ing water use and impact on the soil,” he said.

“There are con­sumers for all types of olive oil, for mass-pro­duced Arbequina and Picual and tra­di­tion­ally pro­duced local vari­eties,” Norte Santo con­cluded. ​“There’s space for every­one.”