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Olive Oil Market Sees Little Decline Despite Higher Prices

olive oil market

Last updated on June 14th, 2024 at 10:42 am

While prices continue to rise and supplies are down from last year, the olive oil market is growing. High temperatures and drought in Spain have caused about a 50 percent decline in production, according to Mouna Aissaoui, EVP and COO at Baltimore-based Pompeian Inc. 

Mouna Aissaoui

“Although Spain is just one of the producing countries of olive oil, it is by far the largest…Spain has a direct impact on the overall market in general,” she said. 

Aissaoui’s comments came during a recent interview with Maggie Kaeppel of The Griffin Report of the Northeast. The executive also shared Nielsen data that showed for the 52 weeks prior to June 12, the olive oil market saw a .3 percent increase oveall. 

“But if you consider the fact that there’s been between a 20-30 percent price increase on olive oil in the United States, we don’t see yet a direct impact on the consumption on the market,” explained.

Aissaoui went on to say that she expects the 2023-24 harvest will likewise be smaller. “We’re not counting on the situation to get better,” she said. 

Olive oil production is a multi-year process. Gaps in the supply cannot be quickly rectified. Nevertheless, Aissaoui sees promising figures in-house and internationally. 

“That really allows Pompeian to have secure supply of olive oil through these rough times. We still, as the largest player in the olive oil industry, are very concerned about what would happen in terms of supply of olive oil, also the pricing,” she said. 

She said the company sources its oil from several countries, not just Spain. Producers in South America and the Mediterranean saw good yields this past year.

“Still, it is going to be very hard to make up for the smaller production in Spain. And also, what we have this year is that the carryover inventory that we have coming into this season is smaller than what we usually have. That also plays into the total quantity available.”

Despite higher prices, consumers are still purchasing olive oil. The market saw a boon during the COVID-19 pandemic as many people turned to cooking with olive oil as a healthy and convenient option. 

As with other categories, private label is also gaining market share in olive oil. And that private label market is not experiencing an increase in prices where it should, according Aissaoui. 

“Retailers are not passing on that increase. But it’s just a matter of time because there’s a continued trend in the pricing,” she said. “Whether it was that [retailers] are hoping and predicting the market to come down or settle, they now see it’s not necessarily going to be for this year.”

Pompeian itself is combating the loss of market share by standing out. Citing the company’s sustainability efforts and its close relationship with farmers and retailers, Aissaoui said customers trust the brand. 

Pompeian logo

“We really value and trust the relationship we have with our retailers. It’s very important that we keep them informed of what is happening in the olive oil market. It is very important to share all the insights that we have,” she said.

“And because Pompeian is uniquely positioned – being that we are farmers – we have the U.S. market as our sole market. It really gives us an advantage in being able to have those conversations with the retailers in terms of how Pompeian is doing versus private or other brands and customers take notice,” she said. 

The company announced in May that it had become the first olive oil brand in the U.S. to have a Sustinably Grown Certified olive farm. Certified by SCS Global Servies, a third-party certification, validation and verification entity, the Sunrise Olive Ranch in Maricopa, California, received the certification. The farm is part of the brand’s owner cooperative. 

Pompeian is 50 percent owned by the largest olive oil cooperative in the world, Dcoop. The co-op is 75,000 farmers strong. 

Pompeian hopes to make the sustainability certification standard across the olive oil production industry, according to Paula Lopes, Pompeian’s VP, quality, R&D and sustainability. 

“As farmers, we know that if we don’t care about the environment, the soil, the trees, we will not be able to survive…we feel the need to have someone a completely independent standard that we could evaluate where we are,” she said.

“To have someone that can certify these good practices, this was key to convince not only big farmers, but all the farmers that we work with worldwide. People will understand that this is the challenge and make them improve and protect what is the most valuable thing for them.”

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