Business

California Olive Ranch Announces Expansion

A $35-million equity infusion is being used to add more than 2,000 acres of farm fields, additional infrastructure, staffing and research and development, the company revealed.

California Olive Ranch
Aug. 27, 2018
By Daniel Dawson
California Olive Ranch

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California Olive Ranch has announced that it will plant 2,200 acres of olive trees by the end of the year.

The com­pany has already invested some of the $35 mil­lion equity invest­ment it received at the end of last year in the project. According to CEO Gregg Kelley, this will be the largest single olive tree plant­ing project in California and the United States.

“These new plant­i­ngs come at a cru­cial time for the indus­try as a whole,” Kelley said. “As the years progress, we are seeing an upward trend in con­sumer demand. By increas­ing our level of pro­duc­tion, we are more easily able to meet that need.”

Kelley told Olive Oil Times that these new trees were grown in domes­tic nurs­eries and, “will pro­vide enough oil to serve the annual demand of our five largest cus­tomers.”

The new trees will be planted in Butte, Fresno, Kings, Merced and Yolo coun­ties. Among the vari­eties that will be planted are Arbequina, Arbosana and Koroneiki.

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“We will also ded­i­cate a sig­nif­i­cant amount of new acreage to test­ing and exper­i­ment­ing with dif­fer­ent vari­etals,” Kelley said.

California Olive Ranch new plantings

Patricia Darragh, the exec­u­tive direc­tor of the California Olive Oil Council, wel­comed the news of more olive trees and said that any sort of expan­sion that allows for increased olive oil pro­duc­tion will ben­e­fit California.

“This is good news for the indus­try,” she told Olive Oil Times. “The COOC sup­ports expan­sion in California as the demand for California extra virgin olive oil has never been greater.”

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According to Darragh, California now pro­vides 7.9 per­cent of the United States extra virgin olive oil market share, an increase of nearly one per­cent since December 2017. The addi­tional acres are likely to help increase the state’s market share and mit­i­gate the effects of less pro­duc­tive years.

In terms of the price that cus­tomers will pay in the super­mar­ket, nei­ther Darragh nor Kelley believes the new acreage will have a big impact. Instead, both argue that the cli­mate and con­sumer demand are much more likely to lead to price fluc­tu­a­tions.

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“While I am not aware of any price increase con­sid­er­a­tions over­all [from the COR’s project], we are antic­i­pat­ing a lower yield than normal for this upcom­ing har­vest which may affect pric­ing,” Darragh said.

Kelley said the expan­sion and equity invest­ment were both allow­ing the California Olive Ranch to create more har­vest­ing, pro­duc­tion and admin­is­tra­tive jobs, as well as expand the company’s milling infra­struc­ture.

“We have increased our U.S.-based team by 20 per­cent in just the past year, with increases planned for the fore­see­able future,” he said.

Kelley declined to com­ment on how much of the $35 mil­lion has already been spent on the acreage increase but said the remain­der would be used to invest in local olive tree grow­ers, organic olive oil pro­duc­tion, research and devel­op­ment and regen­er­a­tive agri­cul­ture.

The equity invest­ment was pro­vided by a “major U.S.-based insti­tu­tional investor” and exist­ing investors. It remains the largest of its kind in the domes­tic extra virgin olive oil sector.