Australian Olive Oil Industry Sees Unprecedented Growth Amidst Global Shortages
Australia's olive oil sector is experiencing a remarkable surge in popularity and demand, driven by the burgeoning health consciousness of consumers and a significant global supply crisis impacting traditional European producers. This boom is not only reshaping the domestic market but also positioning Australian producers as key players on the international stage, with innovative approaches to product presentation, including wine-style tastings and pairings with unexpected culinary delights.
The industry's robust momentum was underscored by a major development in the past fortnight: ASX-listed heavyweight Cobram Estate finalised its acquisition of US producer California Olive Ranch for a substantial $259 million. This landmark deal, reportedly 11 years in the making, highlights the significant investment and confidence in the future of olive oil production. Cobram Estate, a company with a market capitalisation exceeding $1.8 billion, boasts extensive groves in Victoria and the United States, and its products, including the Red Island brand, are widely available in major Australian supermarkets like Coles and Woolworths, with a growing international export presence.
This strategic acquisition by Cobram Estate coincides with a concerted effort by Australian producers to significantly increase their output. They are responding directly to a global olive oil deficit caused by prolonged periods of severe heat and drought in key Mediterranean countries. Nations like Italy, Spain, and Greece, which historically account for over two-thirds of the world's olive oil production, are still grappling with the aftermath of challenging seasons that began in 2022. Spain, a perennial powerhouse in olive oil production, experienced a dramatic drop in its annual harvest, falling from its usual output of approximately 1.4 million tonnes to below 700,000 tonnes.
Gerry Karam, ANZ’s head of food, beverage, and agribusiness, noted the precarious situation in Southern Europe. "Southern Europe has been hit by two extremely difficult seasons, and while production is improving, it remains well below earlier highs," he stated. While global prices saw some easing in early 2024 from record highs that at one point approached $15,000 a tonne, Karam indicated that they appear to be on an upward trajectory once more. "That volatility has been challenging for consumers, but it has created genuine opportunity for newer producers such as Australia," he added.
Traditionally, Australian olive oil has been perceived as a premium, higher-priced product. However, the current global shortage has prompted many Australian restaurants to actively seek out local suppliers. ANZ’s latest "Food for Thought" insight report indicates that domestic production, which reached roughly 20,000 tonnes last season and supplied about one-third of the nation's consumption, is expected to grow its contribution further. "Global production will eventually normalise, but the market has fundamentally changed," Karam concluded.
Extra Virgin Olive Oil: From Gourmet Staple to Health Powerhouse
The Australian olive oil industry's unwavering commitment to producing high-quality Extra Virgin Olive Oil (EVOO) remains a cornerstone of its success. EVOO, the highest grade of olive oil, is produced through a single pressing of the olives without the need for chemical refining to remove defects. This dedication to purity and quality has propelled EVOO beyond its status as a mere gourmet cooking ingredient and into the realm of a recognised health food.
A key attribute driving this shift is EVOO's rich polyphenol content. These potent antioxidants are lauded for their ability to combat inflammation and improve cholesterol levels, among other health benefits. This recognition was explicitly acknowledged by Cobram Estate during its Californian expansion announcement. Chairman Rob McGavin remarked that "every day there are articles on extra virgin olive oil and its benefits," underscoring the growing public awareness of its health properties.
The appeal of EVOO as a health food resonates across diverse consumer demographics. For older generations, it's often associated with supporting heart health and promoting moderation. Conversely, younger consumers are increasingly drawn to its alignment with natural eating, overall wellness, and a desire for authentic, unadulterated products. Karam observed that the extensive publicity surrounding olive oil as a health food has elevated its status. "It's no longer a niche ingredient. It is part of daily cooking, supported by health trends, and the appeal of the Mediterranean diet," he explained. This fundamental shift is fostering a heightened interest in provenance, freshness, and trusted brands – areas where Australian producers consistently excel. Furthermore, Australia's counter-seasonal harvests mean its fresh olive oil enters the market precisely when northern hemisphere stocks begin to dwindle, creating a strategic advantage.
Richard Seymour, general manager of Mount Zero Olives, a producer sourcing from Victoria's Wimmera and Grampians regions, described his business as being "flooded by inquiries." He noted a significant increase in demand for Australian olive oil once European supplies began to falter. "When the European supply really suffered, we noticed this almost insatiable demand to inquire about Australian olive oil," Seymour stated. His premium olive oil business has largely transitioned to sourcing and pressing olives after his family divested properties where they previously farmed groves.
The surging demand has broadened Mount Zero's customer base considerably. "Suddenly we were going from hatted restaurants, our bread and butter for years, to pubs and all kinds of eateries we thought we’d never supply," Seymour elaborated. The business is now so robust that Mount Zero occasionally has to decline new restaurant inquiries to ensure they can adequately meet the needs of their long-standing clientele. However, Seymour also cautioned that while increased prices may boost revenue, cost-conscious chefs and consumers might reduce their purchasing volumes or seek alternative products if prices continue to climb.
Seymour also highlighted the inherent challenges in EVOO production, particularly the relatively small yield of oil extracted from each olive, which can lead to tight profit margins. "If you’re making grape juice, 90 per cent of the juice out of a grape is marketable, but with olives, it’s somewhere between 10-20 per cent," he explained. To produce a standard 500ml bottle of EVOO, as much as 5 kilograms of olives may be required.
The practice of harvesting olives early results in a smaller yield but a more complex flavour profile. Conversely, producers of lower-quality, less flavourful oils might delay harvesting to achieve higher yields from each press. Despite prices that are somewhat higher than mid-market products found in major supermarkets – with a two-litre bulk container of Mount Zero's oils, featuring varieties like Picual, Frantoio, and Coratina, retailing for $58 – Seymour indicated a growing number of non-restaurant customers are being drawn in by the gourmet taste and health benefits. "It has this triple whammy, it increases the hedonistic value of what you’re doing because it’s so tasty, adds to the health value, and the sustainability of it," he enthused.
Beyond the Kitchen: Olive Oil as a Culinary Experience
The widespread popularity of EVOO has extended its reach far beyond the traditional confines of the kitchen. In a testament to its evolving perception, olive oil lattes and innovative cocktails are now appearing on menus in cities like Melbourne, according to ANZ's research.
Alice Massaria, an Italian grocer and importer based in Sydney, is at the forefront of catering to this more discerning clientele. Alongside her partner Enea La Mantia, Massaria operates Olive Oil Hub, a premium EVOO shop and an informative website dedicated to the product. They also run Bottega 1900, a store located in Sydney's Brookvale, which showcases EVOO alongside artisanal balsamic vinegars and wines.
Massaria, who primarily imports from Italy and provides detailed polyphenol content listings for her products, has observed a significant increase in awareness and interest in specialty EVOO within Australia over the past few years. As a qualified sommelier and wine director with extensive experience in Sydney's vibrant restaurant scene, she is committed to bringing a similar level of integrity and expertise to the world of olive oil.
Since its launch in 2020, Bottega 1900 has been instrumental in organising olive oil tasting evenings, drawing parallels to the sophisticated format of wine tastings. Initially, these events attracted predominantly chefs and specialised industry professionals. However, Massaria noted that participation has since broadened considerably. "Reactions [at tastings] are often revelatory for people," she commented. "They show that premium extra virgin olive oil isn’t limited to the kitchen bench…many Australians are only just beginning to discover its true potential."
Massaria, speaking from Italy where she was visiting producers in anticipation of new-season European harvests arriving in Australia for sale from February, has previously collaborated with the gelato chain Rivaereno. These collaborations involved meticulously pairing different olive oils to drizzle over frozen scoops, creating unique flavour combinations. One of Bottega 1900's fine-dining restaurant clients has also introduced a gelato dessert topped with EVOO to its menu.
These unconventional pairings are designed to highlight the diverse flavour profiles inherent in EVOO, a concept Massaria believes Australians are increasingly embracing. "Green, grassy notes, subtle pepperiness, and light bitterness, sensations that can initially feel unfamiliar … are increasingly recognised as positive sensory indicators rather than flaws," Massaria explained. This growing appreciation for the nuanced characteristics of premium olive oil signifies a maturing palate and a deeper engagement with this versatile product.
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