Boundary Bend Co-Founder: Quality and Investment Are Key to Olive Oil’s Future

Summary

Rob McGavin, exec­u­tive chair­man of Boundary Bend, believes that what is best for con­sumers is also best for grow­ers. Boundary Bend, founded by McGavin and his col­lege class­mate in 1997, has become the largest pro­ducer of Australian extra vir­gin olive oil by focus­ing on qual­ity, edu­cat­ing con­sumers, and cut­ting pro­duc­tion costs. McGavin advo­cates for elim­i­nat­ing mean­ing­less mar­ket­ing terms and increas­ing con­sumer edu­ca­tion to pro­mote high-qual­ity extra vir­gin olive oil con­sump­tion.

“Whatever’s in the best inter­est of con­sumers is in the best inter­est of grow­ers,” Rob McGavin, the exec­u­tive chair­man of Boundary Bend, told Olive Oil Times.

Since grad­u­at­ing from uni­ver­sity in 1993, McGavin has been involved in agri­cul­ture, first pur­chas­ing a small vine­yard in South Australia before co-found­ing Boundary Bend with his col­lege class­mate, Paul Riordan, four years later in Victoria.

In the 24 years since co-found­ing Boundary Bend, McGavin has helped trans­form the com­pany into the largest pro­ducer and seller of Australian extra vir­gin olive oil.

Boundary Bend pro­duces about 70 per­cent of Australian olive oil from its groves and makes up about 80 per­cent of the domes­tic mar­ket share of extra vir­gin olive oil sales.

Since set­ting up shop in California in 2015, the com­pany has also become one of the largest olive oil pro­duc­ers in the United States.

Despite their mete­oric rise, McGavin described plenty of ups and downs through­out his 24-year career in olive oil pro­duc­tion.

“We pretty much had to sur­vive in the early days at the same price as the importers were send­ing ​‘extra light’ and ​‘pure,’” he said. ​“Now, as we’ve edu­cated con­sumers, we have been able to lift that up to allow us to make a return, but we made some hor­ren­dous losses and had some really scary moments, par­tic­u­larly the first 12 years of the busi­ness.”

The losses started early after McGavin and Riordan planted Barnea trees imported from Israel. The pair quickly dis­cov­ered that the trees did not cope well with the cli­mate in Victoria, so they pulled them all out and replanted dif­fer­ent vari­eties.

“It’s been trial and ter­ror,” McGavin said.

However, the prin­ci­ple of focussing on the con­sumer and qual­ity has guided Boundary Bend to become one of the world’s lead­ing pro­duc­tion com­pa­nies and a pri­vate research insti­tu­tion that has pub­lished 26 peer-reviewed papers since its incep­tion.

“It’s pretty sim­ple,” McGavin said, ​“ensur­ing that con­sumers get a fan­tas­tic expe­ri­ence and that extra vir­gin olive oil is what it’s called.”

One of the biggest prob­lems fac­ing the indus­try in McGavin’s view is the mean­ing­less pre­fixes attached to refined olive oils, espe­cially ​“extra light” and ​“pure.”

“The indus­try needs to drop ​‘extra light,’ and ​‘pure,’” he said. ​“The indus­try just has to stop pre­tend­ing that all olive oil is great but extra vir­gin is just this thing that you put on your sal­ads.”

However, McGavin empha­sized that grow­ers and con­sumers are not the prob­lems. Instead, he believes that olive oil prices are to blame.

“To be hon­est, there’s almost no rea­son that refined olive oil should exist,” he said. ​“They exist because the pric­ing sig­nal to the grow­ers.”

According to data from the International Olive Council, extra vir­gin olive oil prices in Jaén, the bench­mark mar­ket in Spain, are €3.275 per kilo­gram, while refined olive oil prices are €2.885, just 12 per­cent lower.

“The grow­ers make more money sweep­ing their olives off the ground and sell­ing the oil as refined than they do [from] extra vir­gin because the price is only 10 per­cent dif­fer­ent, but they get a lot more oil accu­mu­la­tion, and there are fewer costs and issues with the har­vest,” he said.

McGavin said the solu­tion for this is to add value to extra vir­gin olive oils by cut­ting costs and edu­cat­ing con­sumers about the health ben­e­fits and organolep­tic plea­sures of con­sum­ing the high­est grade.

“If you look at Australia’s exam­ple, con­sumers do pay for qual­ity when they under­stand, but it requires an absolute com­mit­ment to an extra vir­gin being a true extra vir­gin — and being an extra vir­gin until the use-by date,” he said.

Among the ways Boundary Bend arrived at the point where it could com­pete with importers was through cut­ting pro­duc­tion costs by increas­ing effi­ciency.

For exam­ple, the com­pany installed sub­soil sen­sors in the groves and use satel­lite tech­nol­ogy to mon­i­tor when the trees need any par­tic­u­lar inputs.

“Technology plays a really impor­tant part because it’s about how much water, nitro­gen phos­pho­rus, potas­sium and car­bon you are using, emit­ting or sink­ing per liter of olive oil pro­duced in the end — that’s the cal­cu­la­tion,” McGavin said.

“With all the care­ful mon­i­tor­ing that we do and the years of research, we know bet­ter than most when the trees are using each one of those nutri­ents and in what vol­umes,” he added. ​“So we’re not giv­ing them nitro­gen when they’re not even want­ing it or using it in the whole nine-month grow­ing cycle.”

In both the United States and Australia, the com­pany is also focused on plant­ing more medium-den­sity groves, which McGavin said strike the best bal­ance between cul­ti­var diver­sity, envi­ron­men­tal sus­tain­abil­ity and cost-effi­ciency.

“There’s no doubt that medium den­sity is over­all the most pro­duc­tive, the most sus­tain­able,” he said, refer­ring to the arrang­ing of trees at a dis­tance of 5.5 to 6 meters from one another. ​“It’s the best for the con­sumer because it can grow any sin­gle vari­ety of olive trees. The olives accu­mu­late more oil, there’s less prun­ing involved, there’s less cap­i­tal needed and you gen­er­ate bet­ter returns.”

According to Juan Vilar, a strate­gic con­sul­tant, global olive oil pro­duc­tion is trend­ing toward medium-den­sity (also called high-den­sity) and super-high-den­sity plan­ta­tions from tra­di­tional groves.

In a recent analy­sis, Vilar pre­dicted that 39 per­cent of the world’s olive groves will be tra­di­tion­ally planted by 2041, down from 92 per­cent in 1991.

However, McGavin thinks medium-den­sity will play a more impor­tant role than super-high-den­sity due to the smaller inputs required and the adapt­abil­ity to other vari­eties.

Arbequina and Koroneiki are the two main vari­eties planted in super-high-den­sity, and McGavin believes that con­sumers are look­ing for a broader fla­vor pro­file than these cul­ti­vars pro­vide.

“I’m not say­ing that super high den­sity is bad,” he said. ​“I’m just say­ing that hav­ing all of California grow­ing super-high-den­sity is bad, but if it was 30 per­cent of the indus­try, it’s fine.”

Along with cut­ting pro­duc­tion costs, McGavin empha­sized that adding value is the way of the future. He said the Australian mar­ket is proof that edu­cated con­sumers spend more money on high-qual­ity extra vir­gin olive oil because they know it is good for them, and he believes that cre­at­ing this con­sump­tion par­a­digm encour­ages more pro­duc­ers to focus on qual­ity and ditch the mean­ing­less mar­ket­ing terms.

“If you think con­sumer first, the health ben­e­fits are in the polyphe­nols, so that’s what you need to max­i­mize in your oil,” he said. ​“That’s why con­sumers will spend the money. They don’t have a prob­lem buy­ing some­thing if they know how impor­tant it is to the health of their fam­ily.”

McGavin said con­sumers need to know that ​“refined olive oils, which are all the other cook­ing oils plus ​‘extra light’ and ​‘pure,’ have trans-fats, polar com­pounds and things that we know are really bad for you.”

To that end, Boundary Bend works with other grow­ers in Australia and California to help them improve qual­ity through pro­ducer edu­ca­tion and invest­ing in some of the emerg­ing tech­nolo­gies.

Overall, McGavin believes the pie is big enough for every­one. Cooperation will go a long way in con­vinc­ing con­sumers to buy high-qual­ity extra vir­gin olive oil and per­suade pro­duc­ers that their time and invest­ments should be spent accord­ingly.

“If we work together, we’ll edu­cate con­sumers bet­ter,” he said. ​“Consumers will get a bet­ter out­come. Growers will get more prof­itable. They’ll plant more. All of the indus­try will get big­ger. It’s self-ful­fill­ing.”