The time has never been more ripe than now to grow California olive and olive oil production.
Why?
First, the olive oil market is currently experiencing a significant shortage due to several factors, with Spain, the world’s largest producer, and other top Mediterranean region nations like Italy and Greece being hit particularly hard. Here are the key reasons behind the shortage:
- Extreme Weather Conditions: Spain and other Mediterranean countries, which are major producers of olive oil, have faced extreme weather conditions, including prolonged droughts and heatwaves. These adverse weather patterns have severely impacted olive yields.
- Pests and Diseases: Olive trees have been affected by pests like the olive fruit fly and diseases such as Xylella fastidiosa, which have further reduced the harvest.
- Rising Production Costs: Increased costs for labor, fertilizers, and transportation have made olive oil production more expensive, contributing to reduced profitability for farmers and lower production levels.
- Geopolitical Issues: Economic and political instability in some olive oil-producing regions has also played a role in disrupting the supply chain.
- Supply Chain Disruptions: The global supply chain has faced disruptions due to the COVID-19 pandemic, affecting the distribution and availability of olive oil.
The combination of these factors has led to a decrease in olives and olive oil production, driving up prices and creating shortages in the market.
This is a long-term not short-term problem for Spain (which alone produces about 40% of the world’s olive oil) and the other ‘Big 5’ leading olive global olive oil producing nations – Greece, Italy, Tunisia and Portugal.
In contrast, California, which grows 84% of the total U.S. olive acreage and is the largest producer of olive oil in the U.S., either isn’t experiencing these problems or where it is experiencing them, is doing so to a much lesser degree.
The olive-growing and olive oil production crisis in these nation’s, along with other more positive factors, opens the door to the opportunity for California to increase both olive and olive oil production, taking the next step in the industry’s efforts to become a global powerhouse in olive oil. There’s no reason California can’t be to olive oil what it’s become to wine and almonds, which is a leader. California is currently ranked number 14 in global olive oil production.
The time to take the next major step in the growth of California olive oil is now. California is already the top olive-growing and olive oil producing state in the nation. It is also the best scientific research infrastructure for olive-growing and olive oil production, centered at UC Davis, as well as at Fresno State University and other universities and private companies.
California olive oil also has reached a point where it’s ready to go mainstream after decades of being primarily a niche, locally-produced type of product. The olive oil shortage has aided in this by making more grocery store shelf space available for California olive oil but even more so than this is the fact the industry has reached a tipping point where it’s now able to scale because of significant investment from both the private and public sectors.
Companies like California Olive Ranch, the largest California olive oil brand, are now becoming not only national olive oil brands – its products are in thousands of U.S. grocery stores – but also going global, including in Europe and Asia.
California olive oil is increasingly being accepted as equal in quality to Italian, Greek and Spanish olive oil and in some corners is even being considered as superior. Not long ago California wine was laughed at by the French and Italians. By the 1990s that had ended. Today it’s considered among the best in the world. California olive oil is now at the point of achieving this same distinction.
California produces nearly all of the United States’ olive oil, with an average of 21 million pounds produced between 2021 – 2023. However, imports still account for 98% of domestic olive oil consumption.
This fact shows how much growth is possible for California olive oil. With the growing ability to produce at scale, numerous California olive oil brands have been able to get their prices down from past highs and are seeing a new surge in sales. Since California produces nearly all of the nation’s olive oil, the olive-growing and olive oil production industries in the state can have huge growth if we simply are able to increase domestic consumption of U.S.-produced olive oil by 10%, from the current 2% to 12%.
Although climate change is a challenge for California olive production as it is in the Mediterranean region, we seem to be weathering the storm better than Spain, Greece, Italy, Tunisia, Portugal and the region’s other olive-growing nation’s are. California also is dealing with the other causes of the olive oil shortage better than these nations are.
The olive oil shortage has caused skyrocketing price increases. For example, the healthy liquid fat has increased by as much as 50% in U.S. grocery stores. Prices have increased even more in other nations.
Olive oil is a staple of the heart-healthy Mediterranean Diet, which today is considered the healthiest way of eating. This makes it difficult for people focused on eating healthy to simply switch to a cheaper kind of cooking oil. As such, in many countries the olive oil shortage is even causing food insecurity fears.
California has an opportunity not only to grow olive and olive oil production but also to contribute to the global shortage of olive oil by eventually becoming a significant exporter of California olive oil as well as a more significant domestic supplier. Remember, 98% of the olive oil consumed in the U.S. is imported.
The state has the intellectual, technological and financial infrastructure now in place to grow olive and olive oil production substantially. In my analysis, the industry could easily double in size and annual revenue in 5 to 10 years, with plenty more room to grow further.
Olive tree groves or orchards can be the new almond orchards in California, and the olive oil industry can be the new wine industry in the Golden State. The opportunity for growth has never been greater than it is today.
For those who doubt the opportunity, many also doubted that California could become the wine, berry and almond capitals of the country and the world. Olive and olive oil production are where those crops and industries once were in California.
The olive oil industry is an industry set to boom in California. Olive production must grow with it, which brings opportunity for farmers looking for alternative or additional crops to diversify their operations with. There’s never been a time more ripe than now to grow an agricultural industry – olives and olive oil – in the Golden State.
My Job Depends on Ag Magazine columnist and contributing editor Victor Martino is an agrifood industry consultant, entrepreneur and writer. One of his passions and current projects is working with farmers who want to develop their own branded food products. You can contact him at: victormartino415@gmail.com.
