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The Olive Oil Supply Chain

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Grab a slice of fluffy bread and dip into the olive oil supply chain with us. 

The use of olive oil, above other forms of vegetable oil, continues to increase, with the market projected to reach over $16 billion by 2027 — a 3% increase from 2019’s projection of $13 billion. 

Consumers looking for healthy cooking oils have frequently turned to olive oil, as it not only provides health benefits but is also a versatile cooking ingredient. But where does olive oil come from, and how does it find its way from production to our pantries and dinner tables?

Where Does Olive Oil Come From?

In the past, olive oil was strongly associated with ancient Greeks and Romans, who first used it for religious practices, food, and ointments. While olive oil is still associated with the Mediterranean basin, its recent popularity has led to production in Australia, South America, and California. 

The European Union (EU) is the biggest producer of olive oil globally, accounting for 69% of total production. The EU has many producing countries, with Spain accounting for more than half of the total output.

Leading producers of olive oil include: 

  • Spain
  • Italy
  • Greece
  • Syria
  • Tunisia 

A majority of olive oil is extracted in these countries and then exported around the world.

The Olive Oil Production Process 

Historically, the traditional method of hand-picking and extracting olive oil was used, but industrial farming has advanced since then. 

Production still includes picking and grinding the oil from the fruit, but modernized farming has added filtration systems and fertilizers to bolster quality and growth. Not only that, but robotic harvesters might be on the horizon. 

Parts of the Olive Oil Supply Chain

The exact components of the olive oil supply chain will depend on the country that produces it, but there are several common factors, including:

Producers

The majority of Italian olive oil comes from large farms, 5% of which have at least 160 trees per acre. Olives may be harvested by hand, though these larger farms often rely on mechanization to harvest olives. 

The quality of olive oil is regulated by the International Olive Oil Council, aimed at reducing the amount of olive oil that gets mixed together to mask poor quality oils. Bottles of olive oil must be tested and approved prior to export.

Shippers

Bottles of olive oil are then transported to supermarkets and distributors around the world. Like many other consumer staples, olive oil relies on intermodal transportation, which means that bottles may be shipped by air, cargo ship, trains, and delivery trucks before they reach their final destinations.

Sellers

Finally, bottles of olive oil reach the shelves of grocery stores, restaurants, and ultimately, your table. The price for these bottles depends on the quality of the oil itself, the labor needed to produce it, and the shipping methods used to bring it to your local grocer. 

Naturally, authentic international oils will cost more than cheaper varieties, though consumers may prefer the taste and quality of a particular brand.

The Future of the Olive Oil Supply Chain

The global supply chain continues to face significant challenges, which may influence the availability and cost of certain brands of olive oil. However, now that consumers recognize olive oil as a healthy alternative to other cooking oils, the demand is expected to remain high for the foreseeable future as the consumption of olive oil globally shot to a record 3.19 million metric tons in 2021-2022.

If you’re curious whether expensive olive oil is worth the money, check out this Thomas article

Image Credit: masa44 / Shutterstock.com

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2022-08-24 00:38:13

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