`Billionaire Bets on Olive Oil Quality Trend

Producer Profiles

Billionaire Bets on Olive Oil Quality Trend

Nov. 7, 2013
Nancy Flagg

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For bil­lion­aire Frank Gius­tra, invest­ing in the olive oil indus­try is not a hobby. He has faith that the indus­try will adhere to qual­ity stan­dards and that con­sumers will learn to bet­ter dis­cern qual­ity, and be will­ing to pay for it.

Gius­tra said that until a few years ago, he knew noth­ing about olive oil. Like every­one else, he would just grab a bot­tle from gro­cery shelves. That was the case until he and his fam­ily vis­ited a friend’s villa in Orvi­eto, Italy and tasted olive oil pressed from her trees. Gius­tra real­ized that her oil was vastly bet­ter than any he had ever tasted.

Gius­tra brought sam­ples of Orvi­eto oil home to Canada and invited food experts to his house to blind taste test the Ital­ian oil against expen­sive oils pur­chased from store shelves. The Orvi­eto oil was a clear favorite. Gius­tra, a min­ing investor, founder of Lion­s­gate Movie Stu­dio and phil­an­thropist sud­denly made him­self a new goal: to get into the olive oil busi­ness.

Gius­tra pur­chased groves in Orvi­eto and hired mas­ter pro­ducer Cesare Bian­chini to run the farm. In 2013, the sec­ond year of pro­duc­tion, Gius­tra entered his Domenica Fiore oil in the New York Inter­na­tional Olive Oil Com­pe­ti­tion and earned the high­est score out of the nearly 700 entries.

Gius­tra said that when he started the com­mer­cial oper­a­tion, he was deter­mined to cre­ate some­thing spec­tac­u­lar.” The olive trees were already in a per­fect loca­tion — an ancient seabed rich with min­er­als and planted on a hill­side above the level where fruit flies lay their eggs.

He and Bian­chini set out to elim­i­nate all the vari­ables we could con­trol.” They hand-pick early (in Octo­ber) when the olives are higher in polyphe­nols and fla­vor and press the oil within four hours of har­vest. The hold­ing tanks are nitro­gen sealed to pre­vent oxi­da­tion, and the oil is bot­tled in nitro­gen-sealed, stain­less steel con­tain­ers to con­trol tem­per­a­ture and elim­i­nate light.

Billionaire Invests in Consumers’ Ability to Discern Quality

Such atten­tion to detail is costly. The oil is extremely expen­sive to make and because the groves are rel­a­tively small, there are no economies of scale. As a bou­tique player, Domenica Fiore is com­pet­ing against large olive oil pro­duc­ers who do not go to the same efforts and who blend with sub-par ingre­di­ents,” said Gius­tra. The dif­fer­ence in the cost of gro­cery store oil and bou­tique oil is very big, indi­cated Gius­tra, who knows that he will lose money in the short-term.

As a suc­cess­ful financier, one might won­der why Gius­tra would choose to invest in a busi­ness where it is dif­fi­cult to make a profit. Gius­tra views his olive oil ven­ture as one with long-term poten­tial. He believes that the mar­ket for qual­ity oil is explod­ing world­wide” and since olive oil can only be made in cer­tain places in the world, the sup­ply is lim­ited. Those who make the absolute best oils will find their mar­ket and will be able to price it appro­pri­ately, said Gius­tra.

Gius­tra sees the olive oil indus­try in a sim­i­lar place to where the wine indus­try was 20 years ago. Pub­lic accep­tance of bou­tique olive oil and its higher prices are in an early phase. It will be an uphill climb and will require change in indus­try prac­tices and con­sumer edu­ca­tion. Gius­tra believes that we need to embar­rass the large com­pa­nies” that are sell­ing fraud­u­lent oil and need to edu­cate con­sumers.

Gius­tra expe­ri­enced his ah-ha” moment when he took his first taste of Orvi­eta olive oil. Since then, he has been pas­sion­ate about shar­ing his new-found love with the world. Gius­tra named his oil Domenica Fiore, in honor of his Ital­ian-born mother who instilled in him an appre­ci­a­tion for a fresh, healthy food. Wher­ever he trav­els, he car­ries a bot­tle of his pre­mium oil with him to share with peo­ple he meets.

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