`Investing in the Future of Olive Oil in Argentina - Olive Oil Times
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Investing in the Future of Olive Oil in Argentina

By Sarah Schwager
Jul. 21, 2010 15:24 UTC

By Sarah Schwager
Olive Oil Times Contributor | Reporting from Buenos Aires

Cuna de Olivares lit­er­ally trans­lated means ​“Cradle of olive groves”.

This image of rock­ing the olives in a cra­dle reflects the care that Luis Feld, founder of the Argentinean olive oil com­pany, says he has for his prod­ucts.

“I can’t say which oil is my favourite,” he said when quizzed on the topic. ​“That’s like ask­ing which one of my chil­dren I love more. Each of these vari­eties has its par­tic­u­lar­i­ties that make it unique and spe­cial.”

Mr. Feld is the pres­i­dent and founder of Buenos Aires-based com­pany Alma Cuyana S.A. and its trade­mark Cuna de Olivares.

The busi­ness­man, who spe­cial­izes in the devel­op­ment of agro-busi­ness invest­ment and for­eign trade, was for­merly pres­i­dent and founder of Bodegas (winer­ies) Terranova, and before that, pres­i­dent and found­ing part­ner of Celucat Argentina, a sub­sidiary of Klabin Group, a lead­ing Brazilian paper com­pany.

He decided to make a per­sonal dream come true by buy­ing an olive grove estate for pro­duc­ing olive oil and the first trees were planted in 2005 in Mendoza and San Juan in the Cuyo region, the most well-known olive oil pro­duc­ing region in South America.

The oil, mar­keted under the brand Vero Andino, was first rolled out to China in the sec­ond half of last year.

“I acquired the global mar­ket knowl­edge through my busi­ness in the cel­lar,” he said. ​“It was a project that would allow me to have an income for life and leave my fam­ily a secure income and cap­i­tal. The struc­ture of the enter­prise came much later, after find­ing peo­ple who agreed with my vision and were will­ing to invest in agribusi­ness in the coun­try for the medium and long term.”

The busi­ness is unique in that its approach to the ancient art of olive mak­ing is dri­ven by absen­tee investors and finan­cial man­agers.

Cuna de Olivares devel­ops the plan­ta­tions and man­ages the project while new part­ners are brought into the company’s trust fund. The com­pany – the first to develop olive trust funds in Argentina – offers investors ​“a cap­i­tal increase in the mid and long term at a high cap­i­tal­iza­tion and prof­itabil­ity rate” accord­ing to its lit­er­a­ture.

It was a risky ven­ture for the entre­pre­neur. Argentina’s olive oil pro­duc­tion has been on a down­wards slope since mid last cen­tury. Mr Feld says this is his great­est sat­is­fac­tion – trans­form­ing a dream that many told him was impos­si­ble into a real­ity.

“I have joined the many dream­ers from diverse geo­graph­i­cal loca­tions who believe in the poten­tial for agribusi­ness in Argentina and in our abil­ity to achieve it,” he said.

Up until the 1930s, Argentina was a huge con­sumer of olives and olive oil to sat­isfy the tastes of those peo­ple still lin­ger­ing from the colo­nial period.

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Changes in both Argentina’s econ­omy and the inter­na­tional olive oil mar­ket in the fol­low­ing decades brought about a sharp reduc­tion in the amount of land ded­i­cated to the cul­ti­va­tion of olive trees.

By the 1970s, an increase in the con­sump­tion of cheaper oil mixes such as sun­flower oil and corn oil saw a decline in olive oil sales, with plant­i­ngs removed in masses.

And so the 1990s arrived with olive crops span­ning 33,000 hectares, with an aver­age yield of just 3500 kilo­grams per hectare, or 110,000 tons all up. World pro­duc­tion is around 2.7 mil­lion tons per year. Since then, pro­gres­sive droughts in the Mediterranean Basin, changes in con­sump­tion pat­terns and pro­mo­tion of olive oil have led to a revival of olive oil pro­duc­tion in Argentina, which is now the prin­ci­pal olive oil pro­ducer in South America.

The qual­ity of Argentinean prod­ucts means inter­na­tional export has grown rapidly. Cuna de Olivares exports its prod­ucts to China, Brazil and Mexico. This year it will also add its prod­ucts to the domes­tic mar­ket, with Vero Andino to be dis­trib­uted through­out local super­mar­ket chains next month (August).

Mr Feld says he is not wor­ried about the state of the indus­try in Argentina at the moment. ​“The world olive mar­ket is in full devel­op­ment and gen­er­at­ing major changes,” he said. ​“World con­sump­tion of olive oil is grow­ing at a rate of 4% per year and Argentina pro­duces only 1% of world pro­duc­tion.”

He says while the price of olive oil will always fluc­tu­ate on the world mar­ket, their projects span many years, and so prof­itabil­ity in the long term is not affected. ​“At the national level, while small and medium pro­duc­ers suf­fer the con­se­quences of not being inte­grated, gen­er­ally indus­try expec­ta­tions are very good in the medium and long term, espe­cially for medium and large pro­duc­ers that have an indus­trial unit and split pro­duc­tion, adding export­ing and brand value,” Mr Feld said.

He says despite the fact that the olive grow­ing sea­son is rel­a­tively short, it does not affect the com­pany. As an inte­gral olive ven­ture its rev­enue comes from all links in the chain – from the nurs­ery to mar­ket­ing and brand­ing.

But he believes a strong cam­paign is needed to lift con­sump­tion in the domes­tic mar­ket where cheaper oils such as sun­flower are pre­ferred. ​“The aver­age con­sump­tion of one liter of olive oil per capita in Argentina would mean about 40,000 tons per year, which no cur­rent domes­tic pro­duc­tion would reach.”

Olive oil has been a part of Argentinean his­tory since its begin­nings. Olive oil was used not just in the kitchen but also in med­i­cine, energy, reli­gion and war. ​“Making olive oil is not only good busi­ness, it is return­ing to our immi­grant roots that bind us to the pro­duc­tion of noble foods and the cre­ation of a new his­tory for our chil­dren who may fol­low in our foot­steps in this endeavor, which will sur­pass 100 years thanks to the gen­eros­ity of the olive,” Mr Feld said.

By stick­ing to its roots, the com­pany does not dab­ble in adul­ter­ated olive oil as some com­pa­nies have been known to do to keep a con­sis­tency in the fla­vor. Cuna de Olivares works only with extra vir­gin olive oil and its vari­eties – Arbequina, Frantoio and Coratina.

That care is reflected across the com­pany. Alma Cuyana S.A., which employs more than 100 fam­i­lies in the Cuyo region, has also taken actions to improve the work­ing envi­ron­ment at its prop­er­ties. ​“In Mendoza, for exam­ple, we are assess­ing the con­struc­tion of an out­pa­tient build­ing to pro­vide basic med­ical ser­vices to our staff and their fam­i­lies,” Mr Feld said.

At its com­mer­cial offices in Buenos Aires and Mendoza, the com­pany employs 50 peo­ple full-time and more than 70 tem­porar­ily. Eight pro­fes­sion­als and 42 work­ers, many of who are spe­cial­ized and trained for spe­cific tasks, man the plan­ta­tions.

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