United States Olive Oil Market
Olive oil has quickly become a hot commodity in the U.S. market. Since the U.S. accounts for nearly 10% of global olive oil consumption, and over 95% of U.S. olive oil is imported, the U.S. represents a land of opportunity for all olive oil exporters.
Until now, the U.S. has mainly imported from the EU, with more than half of its imports coming from Spain, followed closely by Italy. The last 25% is supplied by other Mediterranean countries as well as by Chile, Argentina, and Australia.
The increasing demand for olive oil, particularly virgin and extra-virgin, can be largely attributed to increasing trends in healthy eating and the importance of buying organic products. Taste and price consistently rank as the top two factors that impact consumer choice, but in 2014 “healthfulness” almost entirely closed the gap with price. One tenth of the value of all foreign olive oil sales in the U.S. last year came from organic olive oil. U.S. media highly publicizes organic olive oil for its health benefits, highlighting its antioxidant, anti-inflammatory, and anticlotting properties. As consumers become more health-conscious, they support and increase industry demand.
American demand for virgin and extra-virgin olive oil has more than quadrupled in the last twenty years, with virgin olive oil imports increasing by 70%. Typically, perception of quality is linked to geographic origin. Consumers in the U.S. tend to place more value on virgin olive oil from the E.U. However, this perspective has been rapidly shifting after recent discoveries of European companies mislabeling their products as extra-virgin when in fact they do not meet these standards. Italian olive oil consumption has suffered due to this discretization. Now even highly reputable Italian producers are having their reputation tarnished by these fraudulent companies. “Made in Italy” is no longer held in such high esteem and this certainly opens up a wealth of opportunities for a new highly regarded olive oil standard.
Chile has ramped up olive oil production in recent years, increasing output by 2,000 tons from 2015 to 2016. Chilean olive oil has already been received positively by American consumers. Internationally, Chilean olive oil is calculated to b 90% extra virgin and has some of the lowest acidity levels in the world. It has also placed highly in several prestigious international competitions. Chilean olive oil has been heavily marketed as a high-quality alternative to Italian oil by Chile’s main producer organization, ChileOliva. Under the slogan “Truly Extra Virgin,” Chilean olive oil is the ideal replacement for Italian olive oil as consumers look for a more reliable product.
While olive oil consumption has been growing rapidly in the U.S., domestic production only remains a fraction of the market. Additionally, olive oils from European states, which have historically dominated the market, have fallen from grace after mislabeling scandals. These factors, combined with an inherent increase in consumer demand for health-conscious products like organic and extra-virgin olive oil, highlight an important opportunity in the current U.S. market.