U.S. Trade Group Proposes Olive Oil Promotion Cooperative

Summary

The North American Olive Oil Association is launch­ing an ini­tia­tive to increase con­sumer aware­ness and adop­tion of olive oil, propos­ing a research and pro­mo­tion pro­gram to be super­vised by the USDA. The ini­tia­tive aims to increase demand for olive oil in the United States, ben­e­fit­ing the entire sup­ply chain while pro­mot­ing health and over­all well-being.

The North American Olive Oil Association (NAOOA) is launch­ing an indus­try-wide ini­tia­tive that promises to increase con­sumer aware­ness and adop­tion of olive oil.

The pro­posal sent to the United States Department of Agriculture’s (USDA) Agricultural Marketing Service aims to estab­lish an olive oil research and pro­mo­tion pro­gram to cre­ate an indus­try-funded Olive Oil Promotion, Research and Information Order.

According to its pro­po­nents, the ini­tia­tive would increase demand for olive oil in the coun­try, ben­e­fit­ing the entire sup­ply chain while pro­mot­ing health and over­all well-being.

“NAOOA began work­ing towards cre­at­ing a USDA-super­vised agri­cul­tural prod­uct pro­mo­tion board for olive oil around 2017,” Joseph R. Profaci, NAOOA’s exec­u­tive direc­tor, told Olive Oil Times. 

“At the time, I was chair of NAOOA, and we hired the com­mod­ity board expert William Watson of The Fresh Approach as a con­sul­tant to guide us through the process,” he recalled, high­light­ing Watson’s pre­vi­ous suc­cesses with sim­i­lar ini­tia­tives for mango and water­melon boards.

The draft order out­lines a pro­vi­sion for olive oil han­dlers and importers to pay $0.08 per gal­lon (€0.02 per liter), applic­a­ble only if they han­dle or import more than 5,000 gal­lons (18,900 liters) per year.

On the domes­tic side, first han­dlers would pay the assess­ments and, despite rep­re­sent­ing only a small share of the olive oil con­sumed in the U.S., they would occupy one-third of the seats on the board.

The pro­posal would not assess grow­ers unless they were also first han­dlers of the processed olive oil.

“Those who will con­tribute are the peo­ple who process and han­dle the processed prod­uct. The farm­ers should be pro­tected. They should not be pay­ing the assess­ment,” Profaci said.

The pro­pos­al’s sup­port doc­u­ment notes that while olive oil has entered many American kitchens, it remains widely mis­un­der­stood. 

A con­sumer sur­vey cited in the doc­u­ment revealed that ​“approx­i­mately three in ten who viewed a bot­tle labeled ​‘olive oil’ said they don’t know or don’t believe that it was pro­duced from olives.” 

The doc­u­ment stresses that ​“the pur­chase deci­sion depends largely on an under­stand­ing and aware­ness about what makes olive oil spe­cial: what it is, how it is made, how to use it, how to appre­ci­ate its many fla­vors and vari­eties and how it may impact our health and the health of our planet.”

Additionally, two-thirds of the con­sumers sur­veyed said they would like to know more about olive oil.

Watson under­lined the par­tic­u­lar impor­tance of these pro­grams for com­mod­ity sec­tors. 

“The ben­e­fit of these research and pro­mo­tion boards comes from the fact that every­body is on a level play­ing field,” he said. 

Watson added that the olive oil industry’s will­ing­ness to invest in this ini­tia­tive directly is highly sig­nif­i­cant. 

“It says a lot that the indus­try has con­sid­ered itself in the U.S. mar­ket impor­tant enough to take this step,” Watson said.

He stressed the thor­ough­ness of the work done so far, which has pro­vided the USDA with a com­plete pic­ture of import vol­umes and domes­tic trends.

While the USDA reviews the pro­posal, the NAOOA is increas­ingly opti­mistic about its out­come. 

“USDA Secretary Brooke Leslie Rollins has clearly indi­cated her intent to be guided by the prin­ci­ples of Making America Healthy Again, includ­ing pro­mot­ing healthy diets to com­bat obe­sity and chronic dis­ease,” Profaci said.

Decades of research on olive oil, par­tic­u­larly extra vir­gin olive oil, have estab­lished a strong sci­en­tific con­sen­sus on its unique health ben­e­fits. 

“Olive oil should be the poster child for the ​‘food as med­i­cine’ move­ment since healthy fats are fun­da­men­tal in all dietary pat­terns rec­om­mended by the Dietary Guidelines for Americans,” Profaci said. ​“Now is the moment.”

The pro­posal iden­ti­fies crit­i­cal bar­ri­ers to greater con­sump­tion: a lack of knowl­edge, wide­spread mis­in­for­ma­tion, inad­e­quate mar­ket intel­li­gence and mar­ket­ing strate­gies, and a lack of research on health and sus­tain­abil­ity.

According to the doc­u­ment, efforts to address these issues to date ​“have been inad­e­quate,” mainly due to ​“lack of ade­quate fund­ing” and ​“indus­try frag­men­ta­tion.”

Profaci acknowl­edged that ​“some philo­soph­i­cal objec­tions” exist, rooted mainly in per­cep­tions that USDA-super­vised pro­grams rep­re­sent gov­ern­ment inter­fer­ence in busi­ness. 

“Philosophically, some peo­ple object to any­thing that looks like a tax and oppose any gov­ern­ment involve­ment in busi­ness,” Profaci noted. In this case, how­ever, importers and first han­dlers would bear the cost, dif­fer­en­ti­at­ing it from con­tentious cases in the beef and pork sec­tors.

The pro­posed order lan­guage spec­i­fies that assess­ments will apply to imported and domes­ti­cally han­dled olive oil intended for human con­sump­tion, at a rate of $0.08 per gal­lon. Still, it exempts han­dlers who man­age less than 5,000 gal­lons annu­ally. 

Further, it for­mally defines olive oil cat­e­gories eli­gi­ble under the pro­gram, closely align­ing with USDA and Codex stan­dards, to ensure reg­u­la­tory clar­ity.

Watson sug­gested that the USDA’s post­ing the pro­posal pub­licly is a pos­i­tive sign. ​“They would­n’t post it there if they did­n’t think it was seri­ous and if they weren’t going to con­tinue to move it for­ward,” he said.

If approved, the board would launch with an annual bud­get of approx­i­mately $8 (€7) mil­lion. 

“That’s not a for­tune. But con­sid­er­ing NAOOA’s sig­nif­i­cant edu­ca­tional con­tri­bu­tions with a yearly gen­eral pro­mo­tion bud­get usu­ally under $150,000 (€130,000), $8 mil­lion would be a strong start,” Profaci said.

The coop­er­a­tive would pri­or­i­tize ini­tia­tives such as national edu­ca­tional cam­paigns tar­get­ing health pro­fes­sion­als, par­tic­i­pa­tion in major nutri­tion con­fer­ences like FNCE, expan­sion of the olive oil cur­ricu­lum devel­oped with the Culinary Institute of America, and devel­op­ing resources for culi­nary schools, cor­po­rate kitchens, and mil­i­tary com­mis­saries. 

Profaci also stressed the impor­tance of retail edu­ca­tion. 

“Improving sup­ply chain knowl­edge about olive oil’s sen­si­tiv­ity to tem­per­a­ture, for exam­ple, could ensure con­sumers and food­ser­vice pro­fes­sion­als have the best pos­si­ble expe­ri­ence with olive oils,” he said.

The sup­port doc­u­ment draws a par­al­lel with the avo­cado board expe­ri­ence, not­ing that avo­ca­dos, once an exotic prod­uct in the U.S., have become main­stream within two decades. 

“An olive oil board could change this. Consider that in just 20 years, the avo­cado board made the once-exotic avo­cado as American as apple pie,” Profaci said.

The pro­posal also includes a fea­ture that defers the ref­er­en­dum usu­ally required to launch such pro­grams until three years after imple­men­ta­tion. 

“The idea is to let every­body in the sec­tor look at how things are going to move. Everybody is going to have a fair rep­re­sen­ta­tion on the board. Let’s let it work for three years,” Profaci said.

The sup­port doc­u­ment jus­ti­fies the defer­ral by explain­ing that ​“early suc­cess in pro­mo­tional activ­i­ties” is expected to ​“build cred­i­bil­ity and encour­age greater indus­try cohe­sion before the indus­try votes on the pro­gram con­tin­u­a­tion.”

Watson esti­mated that the USDA might move for­ward with approval within three to six months, but warned that the tim­ing for such processes is uncer­tain.

Once approved, the pro­gram would become effec­tive upon pub­li­ca­tion in the Federal Register. 

“That rule will say ​‘effec­tive this date,’ this assess­ment rate will begin on olive oils imported and domes­ti­cally, and the result is that the National Olive Oil Promotion Board will col­lect these funds and invest them,” Watson explained.

For Profaci and the NAOOA, the pro­posal rep­re­sents the cul­mi­na­tion of decades of effort. 

“From the time I got involved in the indus­try in 1993, the asso­ci­a­tion has always looked at the research and pro­mo­tion order as the U.S. indus­try’s Holy Grail. This is what the indus­try in the United States needs. We’re get­ting close to that objec­tive,” he said.

• Draft of the Olive Oil Promotion, Research and Information Order
• Proposal Establishing the Cooperative for Olive Oil Promotion