An Ambitious Goal to Sell 4 Million Tons of Olive Oil by 2040

Summary

Spanish Minister of Agriculture, Fisheries and Food, Luis Planas, aims for the olive oil sec­tor to achieve global sales of four mil­lion tons by 2040 by increas­ing pro­duc­tion, open­ing new mar­kets, and ensur­ing prof­itabil­ity. However, Juan Vilar, chief exec­u­tive of Vilcon, doubts that even with increased pro­duc­tion in Portugal and Tunisia, global capac­ity will reach four mil­lion tons by 2040, and believes that effi­ciency in mills and a shift to more irri­gated super-high-den­sity olive groves would be nec­es­sary to reach this goal.

Spanish Minister of Agriculture, Fisheries and Food, Luis Planas, has set a tar­get for the olive oil sec­tor to ​“reach global sales of four mil­lion tons by 2040.”

“We will increase pro­duc­tion, open new mar­kets and guar­an­tee the prof­itabil­ity of farm­ers, the indus­try and dis­tri­b­u­tion,” he told Expoliva last month.

However, Juan Vilar, the chief exec­u­tive of agri­cul­tural and olive oil con­sul­tancy Vilcon, believes this is an opti­mistic fore­cast.

He told Olive Oil Times that Spain, which pro­duced 42 per­cent of the world’s olive oil in the 2024/25 crop year, can cur­rently pro­duce 2.5 mil­lion met­ric tons of olive oil annu­ally. 

To date, Spain’s record-high pro­duc­tion total was 1.79 mil­lion tons in the 2018/19 crop year, and the world’s largest olive oil pro­ducer aver­aged an annual yield of 1.4 mil­lion tons in the five years from 2017/18 to 2021/22.

While Spain could pro­duce more than three mil­lion tons of olive oil ​“with­out a prob­lem” in ten to 15 years, there are doubts that even with increased pro­duc­tion in Portugal and Tunisia, global capac­ity would reach four mil­lion tons by 2040. 

Vilar pre­vi­ously esti­mated that global olive oil pro­duc­tion could reach 4.4 mil­lion tons by 2050 and does not doubt that Spanish pro­duc­tion could reach four mil­lion tons at some point, but this would require increas­ing effi­ciency in mills and a shift to more irri­gated super-high-den­sity olive groves.

“To reach that level of effi­ciency, every mill needs a higher level of opti­miza­tion,” he said.

Indeed, Vilar recently coor­di­nated a study of the Iberian Peninsula’s 2,219 olive mills, includ­ing 1,047 reg­is­tered as social enter­prises and 1,172 indus­trial mills. 

The team of researchers cal­cu­lated the min­i­mum amount of olives that a mill needs to trans­form into olive oil to be prof­itable. In gen­eral, every kilo­gram of olives milled low­ers the cost of milling for the cam­paign, which has seen fixed costs rise steadily.

The researchers found that in years with poor har­vests, exem­pli­fied by the 2022/23 crop year, 363 mills in Spain and 137 mills in Portugal would be unable to mill enough olives to cover oper­at­ing costs and be at risk of clos­ing down.

“What will hap­pen? All the small oil mills that don’t have the effi­ciency will grad­u­ally be incor­po­rated or inte­grated into other larger mills, and ulti­mately, the num­ber of oil mills will decrease, but their capac­ity and effi­ciency will increase,” Vilar said.

“This is lead­ing to a con­cen­tra­tion in the coun­try­side,” he added. ​“Farms are get­ting larger or are work­ing coop­er­a­tively with small farm­ers. Packers are get­ting big­ger. Distribution is get­ting big­ger, mean­ing food and other dis­tri­b­u­tion com­pa­nies are get­ting big­ger.”

Vilar pointed out that the trend is already begin­ning to unfold, with eight mills in Portugal respon­si­ble for milling 46 per­cent of the country’s olives and the largest mills in Spain trans­form­ing 45 times more olives each har­vest than the aver­age mill.

He said that small and medium mills must increas­ingly spe­cial­ize to stand out by empha­siz­ing qual­ity, diver­si­fy­ing their prod­uct port­fo­lio, telling a dis­tinc­tive story about them­selves and focus­ing on native olive vari­eties that are not com­pat­i­ble with super-high-den­sity cul­ti­va­tion.

“They must also con­tinue to opti­mize by-prod­ucts in an appro­pri­ate way and inte­grate new activ­i­ties such as oleo­tourism,” Vilar said.

In the mean­time, Planas told Expoliva that a gov­ern­ment pri­or­ity is to guar­an­tee fair prices for farm­ers and olive grow­ers, who he described as the ​“weak­est link in the chain and must be fairly com­pen­sated for their efforts.” 

Planas stated that the role of mills and coop­er­a­tives in achiev­ing this goal was fun­da­men­tal, empha­siz­ing that qual­ity was the key to increas­ing mar­gins across the entire value chain.

“Our great­est asset is qual­ity; we must con­tinue to focus on it as our hall­mark,” Planas said. 

He also empha­sized that exporters could not be com­pla­cent and con­tinue to pro­mote Spanish olive oil in the more than 150 coun­tries to which it is exported.

“We must defend our posi­tion in strate­gic mar­kets like the United States and open new ones like Mercosur, Japan, Korea, Canada, the United Kingdom and the European Union,” he said. ​“The poten­tial is enor­mous, and we must inten­sify our pro­mo­tion.”

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