Data Will Define Next 25 Years at California Olive Ranch, CEO Says

Summary

California Olive Ranch (COR) has grown over the past 25 years to become the largest olive oil pro­ducer in the United States, expand­ing from a sin­gle grove in Oroville to 5,000 acres and 50 grower part­ners across the state. The com­pany has invested heav­ily in data-dri­ven farm­ing prac­tices to improve sus­tain­abil­ity, adapt to cli­mate change, and drive future growth by tar­get­ing pro­mo­tional strate­gies to cus­tomers and expand­ing con­sumer aware­ness about the health ben­e­fits and ver­sa­til­ity of olive oil.

Over the past quar­ter cen­tury, California Olive Ranch (COR) has grown from a sin­gle grove in Oroville, 100 kilo­me­ters north of Sacramento, into the largest olive oil pro­ducer in the United States.

The com­pany was founded in 1998 as a hobby project by a Barcelona-based fam­ily office and pio­neered high-den­sity and later super-high-den­sity olive tree cul­ti­va­tion in California.

The idea to plant olive trees in hedgerows allowed COR to har­vest mechan­i­cally, dras­ti­cally cut­ting costs and allow­ing the fledg­ling com­pany to start on its path to scale.

“We started with 500 acres (200 hectares) in Oroville,” chief exec­u­tive Michael Fox told Olive Oil Times. ​“Now, we have 5,000 acres (2,000 hectares) and 50 grower part­ners up and down the state.”

While the first 25 years for COR was defined by its push to achieve scale, Fox believes data will deter­mine the company’s tra­jec­tory over the next quar­ter cen­tury.

“Our approach to farm­ing has evolved,” Fox said. ​“When I came on board [in 2019], I wanted to invest a lot in data around the nutri­tion of our trees and irri­ga­tion uptake; all the ele­ments of get­ting big­ger fruit with more oil.”

The company’s 2,000 hectares of olive groves have been divided into blocks, each located in a dif­fer­ent region and micro­cli­mate.

Using a com­bi­na­tion of sen­sors, the United States Department of Agriculture satel­lites and 30 peo­ple out in the groves, the com­pany can see how trees take nutri­tion and their water needs monthly, allow­ing them to adjust through­out the year.

“We are look­ing at the trees block by block and then mak­ing adjust­ments based on what we’re see­ing,” Fox said. ​“Now, we’re track­ing every­thing a lot bet­ter with data. We will learn from these next cou­ple of har­vests and make adjust­ments.”

The heavy invest­ment in data is help­ing the com­pany to achieve its self-imposed sus­tain­abil­ity goals. ​“Over the last four years, we’ve adopted a lot of regen­er­a­tive agri­cul­ture prac­tices,” Fox said.

These include graz­ing live­stock in the olive groves, using min­i­mal till­ing and com­post­ing the byprod­ucts of the olive oil pro­duc­tion process.

Again, Fox said data dri­ves many deci­sions sur­round­ing the company’s regen­er­a­tive agri­cul­tural prac­tices, which he believes is nec­es­sary to adapt to one of the main chal­lenges fac­ing the com­pany and indus­try in California: cli­mate change.

“We’ve gone deeper into data, under­stand­ing our car­bon seques­tra­tion and the impact that our trees have on the envi­ron­ment,” he said. ​“Then we set goals for how we can con­tinue to improve that.”

Improving water effi­ciency was among these goals. To that end, Fox said the com­pany invested in sophis­ti­cated irri­ga­tion sys­tems to pro­vide pre­cise amounts of water to the trees at exactly the right moments dur­ing olive devel­op­ment.

Fox is also focused on soil regen­er­a­tion, rec­og­niz­ing that pro­mot­ing healthy soil, which retains water more effi­ciently than unhealthy soil, is increas­ingly nec­es­sary in a drought-prone state.

Along with adopt­ing these prac­tices in their groves, Fox empha­sized that the com­pany also uses what it has learned to advise its grower part­ners to help them become more sus­tain­able and effi­cient.

“Our part­ners love us because we were the first to do this and, can­didly, they like to say we made the most mis­takes,” Fox said. ​“We made mis­takes early on that they could learn from.”

Before join­ing COR in 2019, Fox worked as an exec­u­tive at PepsiCo and Safeway, a super­mar­ket chain.

Based on his expe­ri­ence in the gro­cery and snack food indus­tries, he is using data to tar­get pro­mo­tional strate­gies to cus­tomers at spe­cific times and drive the future of the company’s retail strat­egy.

“We are a con­sumer pack­aged goods com­pany, so we have to behave like one,” Fox said. ​“Data helps us make sure those invest­ments are pay­ing off for us and our cus­tomers.”

According to Fox, using data to drive pro­mo­tion adds to what he said was already a robust brand­ing strat­egy before he joined the com­pany.

Fox said COR grew more rapidly over the past ten years, helped by its dis­tinc­tive green bot­tle and win­ning qual­ity awards at local and inter­na­tional com­pe­ti­tions.

“Today, we are the num­ber three extra vir­gin olive oil in the U.S. gro­cery chan­nel, and we’re the num­ber one 100-per­cent California extra vir­gin olive oil,” he said.

According to Fox, the com­pany has over­come chal­lenges of infla­tion, pro­duc­tion cost increases and three rel­a­tively poor har­vests over the past five years, increas­ing the amount of olive oil sold and total rev­enue from sales.

Fox attrib­uted the recent spate of poor har­vests to adverse weather con­di­tions, pri­mar­ily high tem­per­a­tures in January, caus­ing the olive trees to bloom pre­ma­turely, fol­lowed by frost, which dam­ages the devel­op­ing buds and pre­vents the trees from pro­duc­ing any fruit.

“Fortunately, we built a busi­ness model that can sus­tain that,” he said. ​“By hav­ing our Global Blend in California, we can sus­tain chal­lenges like that and still grow the busi­ness.”

Since its 2018 debut, the Global Blend has been con­tro­ver­sial. Other pro­duc­ers in the state accused COR of under­cut­ting their prod­ucts by sell­ing imported olive oils, which are often cheaper to pro­duce than California olive oil while prof­it­ing off of the California name.

Fox denied that COR was attempt­ing to under­cut other olive oil pro­duc­ers. To main­tain shelf space in major national retail­ers – a costly and highly com­pet­i­tive process – COR must dis­trib­ute a con­sis­tent num­ber of bot­tles yearly.

The com­pany orig­i­nally adopted this strat­egy after a poor har­vest in 2018 resulted in them import­ing oil from Europe and South America to meet demand. Since then, it has become part of their growth strat­egy, with about 70 per­cent of COR sales com­ing from the Global Blend.

“Still, our goal is to expand,” Fox said. ​“We are the most widely dis­trib­uted, but we only have 3 per­cent of American house­holds buy­ing California Olive Ranch.”

According to COR’s mar­ket research, the lead­ing olive oil brand in the U.S. is pur­chased by 14 per­cent of house­holds, while 58 per­cent are buy­ing any olive oil.

“There’s a huge oppor­tu­nity to increase house­hold pen­e­tra­tion through aware­ness,” Fox said. Along with cli­mate, grow­ing the con­sumer base for olive oil in the U.S. is the other main chal­lenge fac­ing the com­pany and sec­tor.

COR is work­ing to achieve this by rais­ing aware­ness about the health ben­e­fits of olive oil, pro­mot­ing the ver­sa­til­ity of cook­ing with olive oil, and work­ing to sell olive oil in dif­fer­ent sizes and pack­ag­ing for­mats.

“There’s a bifur­ca­tion in the needs. The peo­ple who are buy­ing olive oils are look­ing for health, taste and qual­ity, while the peo­ple buy­ing other cook­ing oils are look­ing for ver­sa­til­ity,” Fox said. ​“We need to edu­cate con­sumers that extra vir­gin olive oil can be ver­sa­tile.”

“For bang for the buck, this is prob­a­bly the best prod­uct you can buy in the store from a health com­po­nent and a sus­tain­abil­ity com­po­nent,” he added. ​“The more peo­ple under­stand that olive oil should be in your pantry is the way to get from 58 per­cent house­hold pen­e­tra­tion to 80 per­cent house­hold pen­e­tra­tion.”

Looking ahead to the com­ing har­vest, which will begin in the first weeks of October, Fox said he feels opti­mistic. ​“Things are look­ing good,” he said. ​“Especially because we’re com­ing off a cou­ple of really bad years.”

The com­pany is prepar­ing its har­vest strat­egy to ensure the olives have the high­est pos­si­ble oil accu­mu­la­tion before they start pick­ing and milling.

“This year, we’re ded­i­cat­ing our har­vest to Bob Singletary, who was our found­ing mas­ter miller and was with our busi­ness for many years,” Fox said. ​“Unfortunately, he passed away this year.”

“We have a very strong team that he trained,” he added. ​“He was a spe­cial part of our life, so we’re ded­i­cat­ing the har­vest and our Olio Nuovo to him.”