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How Retailers Can Take Advantage of the Olive Oil Boom

By David Neuman, CEO Gaea North America

In my 10 years in the olive oil business, I have seen a lot of change but also a lot of status quo. One thing is certain, though: the level of interest in olive oil, both in the trade and among consumers, has never been higher.

There is a very positive trend toward improving quality in olive oil in the U.S. and around the world. Never in history has there been so much quality extra virgin olive oil produced in so many places. Discerning extra virgin olive oil consumers can find an amazing array of extra virgin olive oils of diverse styles and origins if they are willing to seek them out: in specialty stores, direct from the producer, on the internet, and, sometimes, on supermarket shelves.

But despite this, the average American consumer is confused and most likely not benefitting from the growth in quality extra virgin olive oil. For every article or news story heralding another discovery about the extraordinary health or culinary benefits of extra virgin olive oil, there is a headline about fraud in the industry. The sad truth is that a tasting survey of the average supermarket olive oil set will reveal numerous olive oils with flavor defects.

The various international definitions of “extra virgin” differ on sundry points, but they are unanimous on one thing: to be “extra virgin” grade, an olive oil may not have defects in flavor. Yet one research survey after another, at home and abroad, has found the same thing: a majority of the oils being sold as “extra virgin” are actually “virgin” grade (or worse).

There is something else that most of these substandard products have in common: they are inexpensive -- $5.99 a liter or even less. The reality of olive oil production is that you cannot place a genuine extra virgin olive oil on the retail shelf for that amount of money. Prices like this distort the entire category, adding to consumer confusion and penalizing the producers of true extra virgin olive oil who must charge a higher price because their product is more expensive to produce.

What is the solution in this muddled marketplace? There are encouraging developments. In 2014 the state of California made a significant advance with the adoption of a CA-quality standard for its own producers of 5,000 gallons or more. This standard builds on the USDA standard to be the most comprehensive one on the books thus far in the U.S. It includes important newer chemical parameters that are widely used by the trade, and prohibitions on some of the more confusing label terms like “pure” (which means “mostly refined olive oil”) and “extra light” (which means “even more refined olive oil”).

This CA standard is good news for all quality olive oil in the US., regardless of origin, because it focuses attention on the value of real extra virgin olive oil. Honest dialogue in this country about quality—and subsequent action—will be good for consumer confidence, and build trust in the product. We are not alone in our concern about quality. Trade groups like the international association Extra Virgin Alliance are working to educate the trade and consumers, promoting the benefits of quality authentic extra virgin olive oil.

Another encouraging sign is the persistent growth of demand for extra virgin olive oil in the market, and the increasing consumer interest in the product. Unlike fad foods, extra virgin olive oil is showing real legs in the marketplace. Its inherent value shines through all the hype and confusion: it has great benefits for health and well being; it is a complex and fascinating food with an amazing history; it is minimally processed and full of natural nutrients; and it makes food healthier and more delicious.

The retail sector has an opportunity here to seize the moment. Genuine extra virgin olive oil should not be displaced from the market shelf by sku after sku of inferior product. A better olive oil set with more high-quality options will give the shopper opportunities to upgrade. High-quality extra virgin olive oil is an excellent value for the user, adding so much healthy flavor for around 50 cents per serving. And since these high-quality extra virgin products are more profitable for the seller, making the choice to do the right thing can be an easy one! 

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