Olive Oil - Make it for Market

There has been an average annual (compound) growth rate of olive oil imports of around 15% over the past ten years but it seems reasonable to assume that the growth rate of demand will start to level off. There is a slowing of total olive oil imports to around 22,000 tonnes by 2006, of which about 4,500 tonnes will be virgin olive oil. It is this smaller premium market which the majority of growers are targeting. This paper considers marketing needs of olives from an industry rather than an individual business perspective. As more groves come into production, there is a new set of challenges that may be better dealt with on a collective basis. The growth in interest in olive oil production is driven by the high prices ($22 to $65/ litre) which are currently being achieved by some locally produced oils. The ‘import parity price’ is set by lower quality imported oils, mainly from Spain and Italy, which are retailing at $8 to $12/ litre in supermarkets. This implies that the import price is around $4/ litre or less. A model of the olive oil market chain shows that it is possible for Australian growers to put olive oil on supermarket shelves at a price comparable to the majority of current imports. Strategies to help ensure long term profitability are suggested