`Gregg Kelley's Long View: 'Quality Drives Consumption' - Olive Oil Times
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Gregg Kelley's Long View: 'Quality Drives Consumption'

By Wendy Logan
Aug. 31, 2015 15:17 UTC

It’s a star­tling sta­tis­tic. In just eight years since Gregg Kelley took over as CEO at California Olive Ranch (COR), the company’s rev­enues have rock­eted from $2 mil­lion to an antic­i­pated $80 mil­lion by the end of 2015. ​“When I started,” he told Forbes mag­a­zine recently, ​“we had one gro­cery store. Now we have well over 20,000 retail­ers.” Under Kelley’s lead­er­ship, the company’s extra vir­gin olive oils, which include those under the COR label together with Lucini Italia, which Kelley acquired in January of this year, are now the fourth largest-sell­ing brands in the United States.

Managing this kind of growth calls for a pro-active stance. ​“Our key chal­lenge is sup­ply,” he said to Forbes. But how will he meet the demands of such a boom­ing busi­ness? Are fur­ther acqui­si­tions on his radar? Will he reach out to other U.S. states as pos­si­ble sup­ply points?

We have far more in com­mon than we have com­pe­ti­tion.- Gregg Kelley

“We have enough land and resources here in California to sat­isfy the present demand,” he told Olive Oil Times. ​“You’ve got to remem­ber that we’re oper­at­ing with a view to the long term: It’s the five‑, ten- and twenty-year cycle we have to con­sider. So we are always look­ing through a tele­scope, try­ing to antic­i­pate where we will be five years from now and eval­u­at­ing all the vari­ables.

“Though we’re always (con­sid­er­ing) the indus­try glob­ally, and we’re very pleased with our acqui­si­tion of Lucini — a great brand — our focus is clearly on California right now. We’re look­ing for addi­tional ground here.” And the com­pany is always talk­ing with oth­ers in the indus­try. ​“We will con­sider both for­eign and domes­tic acqui­si­tions down the road, but the key (would be) that they are top-qual­ity pro­duc­ers.”

One of the many ways Kelley keeps costs down is by mechan­i­cal har­vest­ing of his high-den­sity groves, which saves the com­pany thou­sands of dol­lars per acre. The process is also cham­pi­oned by other New World pro­duc­ers includ­ing Chile, Argentina, South Africa and Australia, whose Boundary Bend — another fast-mov­ing com­pany with a sky­ward tra­jec­tory — recently set up shop near Sacramento.

With sup­ply a pos­si­ble con­cern down the road, Kelley feels con­fi­dent that he won’t be com­pet­ing for grow­ers and, in fact, hails his new neigh­bors as being a pos­i­tive for the indus­try at large.

“It’s a sign of the health of our indus­try to see such great prod­uct com­ing out of Australia. We’ve talked with them for years. I like their approach. They’re great peo­ple pro­duc­ing fan­tas­tic olive oil. But as far as com­pe­ti­tion, we’re not too con­cerned. We have excel­lent, long-term rela­tion­ships and part­ner­ships with our con­tracted grow­ers. We’re far more con­cerned with what’s going on with the crops, in com­bi­na­tion with the goals for our finan­cial funds. Those two fac­tors have a far greater impact on our busi­ness than com­pe­ti­tion,” Kelley said.

“In this grand indus­try, we’re tiny. With what we’re doing with COR, how we respond to the land and the envi­ron­ment here and how we deal with things like the drought mean we have far more in com­mon than we have com­pe­ti­tion.”

While some in the indus­try are frus­trated by what seems like a slug­gish rate of adop­tion of olive oil in America, Kelley feels progress has been solid. ​“We don’t think we’re mov­ing too slowly at all,” he said. ​“We’ve been very pleased with our growth and that of the California indus­try. It’s all about the per­cep­tion of the viewer. It’s just a cat­e­gory that needs con­sis­tent inno­va­tion for improv­ing the qual­ity of the prod­uct that’s out there. We’ve focused on the health ben­e­fits, the taste — we work directly with chefs and both the COR and Lucini brands are a trusted source of olive oil because of con­sis­tent qual­ity. We think our brands are prime exam­ples of why the indus­try has grown as sig­nif­i­cantly as it has over the last ten years. Quality dri­ves con­sump­tion.”

Increased con­sump­tion hasn’t hap­pened in a vac­uum, how­ever, and Kelley says a con­certed effort on the part of his com­pany to ​“get the prod­uct on people’s tongues” has been pri­mary. To achieve that in a broad sense means pro­duc­ing a prod­uct at price points that make buy­ing the good stuff palat­able.

The real­ity, Kelley believes, is that until the last five to eight years, the major­ity of American con­sumers had never tasted really true extra vir­gin olive oil, and offer­ing a qual­ity prod­uct at a rea­son­able price has removed some of the risk for con­sumers who are ready to try it.

“We’re blessed with a pro­duc­tion infra­struc­ture that allows us to put a high-qual­ity olive oil on the mar­ket at a very com­pet­i­tive price,” Kelley explained, and that includes sell­ing it through vastly diverse retail­ers — Whole Foods and Walmart for exam­ple.

“Withholding our prod­uct from parts of the mar­ket is not a sound strat­egy. Both retail­ers offer an impor­tant demo­graphic. We need to be every­where and give every­body access to it. That’s the crux of what we’re try­ing to do — using dif­fer­ent strate­gies to reach dif­fer­ent niches, and our prod­ucts do very well at both.”

With qual­ity Kelley’s pri­mary mantra, what does the CEO say about the con­tro­ver­sies that per­sist in the inter­na­tional arena for the sec­tor?

“As far as the International Olive Council goes, we don’t spend a whole lot of time con­cerned about its activ­i­ties. Of course, we keep up with them and with what’s going on there, but (the U.S.) is not a mem­ber and I don’t believe we ever will be. There are chal­lenges they will have to con­front and it’s up to them to decide if they’re going to be sup­port­ive of a pro­gres­sive indus­try con­stantly seek­ing to pro­vide best the expe­ri­ence to the con­sumer.”

Kelley is well aware, he said, that in the eyes of con­sumers, the olive oil indus­try has some ground to cover before it will be free of its long-estab­lished asso­ci­a­tions with shady prac­tices and slip­pery scams.

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“I think every­one in the olive oil busi­ness under­stands that ours is an indus­try that’s imper­fect,” he said. ​“The chal­lenge is that it’s an expen­sive prod­uct to pro­duce, regard­less of grade, and it invites a lot of game play­ing, with the profit motive in mind. The biggest chal­lenge the indus­try faces is not so much the coun­ter­feit­ers them­selves, but the expe­ri­ence robbed from con­sumers. Many of us around the world are putting a higher qual­ity prod­uct out there and let­ting the con­sumer decide — and the con­sumers are becom­ing aware.

“Once you taste bet­ter qual­ity olive oil, you know what you’re look­ing for. The shift will occur over decades, not overnight, but if we sit back and look at what’s hap­pen­ing in the indus­try, you’d be sur­prised at how much move­ment has occurred in the last 10 to 30 years. It’s all chang­ing for the bet­ter. I’m very opti­mistic and think we should feel pretty good about where we’re going.”

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