The consumption of olive oil has increased in the last 20 years in Australia due, mainly, to the increasing popularity of Mediterranean cuisine and the diffusion of the healthy benefits of this product, which is present in approximately 65% of households.
This has been highlighted in an exclusive interview with Mercacei, with the president of the Australian Olive Oil Association (AOOA), David Valmorbida, who assures that consumers in the Aussie country are increasingly demanding with the EVOO they acquire.
How has the olive sector in Australia evolved in recent decades?
Olives have been grown in Australia for over 200 years, with report of the first olive tree being brought to Sydney in 1800, however it wasn’t until the 1990s that there was increasing interest in olive plantations as an investment, partly due to the increasing influence and popularity of Mediterranean cuisine and in part due to a period of government taxation incentives for olive and grape farming. Olive oil has always been and continues to be the primary product made from olives in Australia. Available information suggests that in 2000, the total national production of olive oil was approximately 500 tonnes, while consumption was approximately 25000 tonnes, the balance being imported, of which approximately 30% was virgin olive oil (extra virgin and virgin grades). By 2011, many new Australian olive groves had achieved maturity with national production since 2012 varying between an approximate range of 10000 tonnes to 21000 tonnes, of which 3000-5000 tonnes is exported, and the rest consumed domestically, predominantly as extra virgin or virgin olive oil. There are no significant refineries for olive oil in Australia due to the small production, therefore olive growers and processors must focus on quality, in an attempt to maximise the percentage of oil produced as extra virgin olive oil. This has been further helped by modern plantation methods and technology. The market for imported olive oil has changed as a result for the increase in availability of locally produced product, reaching a relatively stable volumes generally within the range of 27000 to 33000 tonnes per year, of which approximately 55%-60% is virgin olive oils (extra virgin or virgin).
Overall the market has therefore grown significantly – olive oil is present in approximately 65% of households and the total annual consumption is estimated at approximately 47000 tonnes. This implies that there is still opportunity for significant growth in the consumption of olive oil, however a variety of factors such as high prices, confusing and negative media stories about olive oil quality and competition from other types of cooking oil such as rice bran oil, has resulted in overall consumption of olive oil in Australia stagnating, while the per capita consumption of olive oil in Australia having slightly declined in the last 10 years. The industry has a significant task ahead of itself to reignite the interest and passion of consumers for olive oil, to expand the number of households using it and to increase their usage volume of olive oil by championing the health, taste and versatility benefits of olive oil for use in many recipes or food preparations that consumers currently do not think to use olive oil for.
Table olives have also increased in production during the last 20 years, with the IOC estimating some 4000 tonnes of production in Australia, versus a total consumption of almost 22000 tonnes per year (the balance being imported olives). The Australian table olive industry is still very small in comparison to those of other countries, or compared to olive oil, but is increasing in popularity, especially due to consumer desires to purchase local products.
Olive oil is a product that is increasingly consumed in Australia due to its known healthy properties... Is this correct?
As noted above, olive oil consumption has increased in the last 20 years in Australia, primarily due to increasing popularity of Mediterranean cuisine, both from a taste perspective, but also from the perspective of its advantageous reputation as a healthy diet. More recently, the demographic profile of Australia has pivoted towards other ethnicities that are not very familiar with olive oil, rather preferring other seed and vegetable oils, and the combination of this influence combined with recent volatility (including record high) prices of olive oil, plus negative media reports questioning the quality of olive oil has resulted in a clear stagnation of growth in the last 10 years, which translates to a declining per capita consumption of olive oil as Australia’s population has grown.
Olive oil is not just consumed because of its perceived healthy properties though. Australian consumers, many of whom have Mediterranean heritage within their family, prize extra virgin olive oil for its special taste and versatility for many recipes and cooking applications.
What would you highlight about the knowledge of EVOO shown by the Australian consumer?
Australian consumers are increasingly discerning about the EVOO they purchase. Locally produced oils can achieve very high prices in small volumes, while in the mainstream channels such as large supermarkets, price competition can be fierce as a result of the market dynamics related to a concentrated retail industry. Nevertheless, many Australian consumers may purchase a regular every day EVOO in high quantities, while also exploring different brands, varieties and tastes with occasional purchase of more premium olive oils. Most Australian consumers fundamentally understand the difference between extra virgin olive oil and (standard) olive oil, and generally apply different usage occasions, however it is likely that there are still many consumers who do not clearly understand the difference between various grades, types and usage occasions of olive oil. Additionally, many consumers still believe that olive oils are not suited to high temperature cooking, which remains a barrier to increasing the market potential for olive oil sales. Investment by international and local associations would help to bridge the gap of Australian consumers’ knowledge of olive oil and could greatly increase the consumption of olive oil in Australia by at least 20-30% in the next decade, assuming the price of olive oil globally does not significantly diverge further from the price of alternative cooking oils.
How do you feel about the evolution of extra virgin olive oil consumption in Australia?
As commented above, we believe that several factors have contributed to the stagnation of overall consumption of olive oil in Australia and we suggest that there is still significant capacity for growth in the percentage of households using olive oil as well as increasing the consumption within each household by education about usage and application. Within this overall market, it is clear that the proportion of olive oil consumed that is extra virgin has significantly increased (from just ~30% in 2000 to ~75% in 2020). It appears to be a natural development of the market (as seen also in other markets around the world); as consumer behaviour and tastes mature, they are increasingly seeking out higher quality olive oils, unique flavours from different varieties and of course the additional health benefits that are associated with EVOO.
Is it easy to find gourmet stores in Australia or trendy restaurants where they sell and cook with EVOO?
How have recent fires affected Australia's olive oil production?
Luckily, there have been few reports of significant damage to olive farms in Australia as a result of recent fires. The 2020 fire season is not yet over, so risks still remain, however to date the fires have generally occurred in different areas to olive growing, aside from in olive growing regions in South Australia. The main risk to Australia’s olive oil production remains the availability of water, since many parts of the country have experienced severe drought in recent years.
What forecasts do you have for this campaign?
The next harvest in Australia will take place around April-July. The largest producer in Australia (who estimate to represent almost 65% of Australia’s production) is expecting a smaller year after a large harvest in 2019, however other areas of Australia may experience a good harvest. Overall, we would expect the production to be somewhere between 10-15k tonnes nationally.