An article yesterday in the Telegraph, and echoed elsewhere, tried to rile up readers with the battle cry headline “Eurozone olive oil firms face threat from America.”
“The growing olive oil market in the US is poised to be a ‘battleground’ between the historic European producers and their new challengers from California,” the article warns.
The story relies on a report from a bank in California’s Central Valley that finances the local agricultural industry.
The bank’s report went out on a limb predicting California producers would “likely” gain 5 percent of the U.S. market share in the next 5 years — as long as the U.S. establishes “stricter quality labeling standards and increases consumer education on quality,” that is.
It’s no surprise that a California bank would jump in the ring as American importers and producers duke it out over a proposed marketing order. What’s unsettling is how fast its press release was spun into more misleading headline hype.
California’s own experts have predicted the domestic industry might some day be able to supply 5 percent of the country’s needs – maximum. Getting there in five years is unthinkable.
The Telegraph warns the European producers “especially Spain” look “vulnerable.” It wouldn’t seem so: Spain has doubled its olive oil exports in the last ten years and sales to the U.S. are nothing less than soaring.
Not to mention that big European companies are setting up shop in many of the New World markets. Even California Olive Ranch — by far the biggest producer in the U.S. — is owned by Spanish investors.
Even if American producers manage to capture 5 percent of the market in five years, the market will be 30 percent bigger overall. Hardly a doomsday scenario for Spain. Throw in booming new markets like Brazil and giant prospects like India and China, and suddenly Deoleo stock starts looking pretty good.
New World producers won’t win market share by painting European olive oils as inferior or with calls for nationalism.
Include the Rabobank report and Telegraph article in the ever-growing list of sensational hype and misdirected efforts.