The Rise of Organic Olive Oil in Greece

Small-scale Greek producers are taking a gamble that the risk of investing in organic olive oil production will pay off. Some say Greece has the ideal conditions in which to do so.

Jan. 31, 2019
By Sofia Spirou - Agronews

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For Greek con­sumers, organic olive oil and olives are a high-end prod­uct. To com­pen­sate for higher pro­duc­tion costs, pro­duc­ers charge a higher price, which makes demand for organic olives and olive oil weak.

With a large vari­ety of qual­ity olive oils avail­able at very afford­able prices, com­pe­ti­tion for the organic ver­sions of the country’s favorite sta­ples will always be healthy.

Selling large quan­ti­ties of olive oil in bulk, 17-liter tins, also does not help the organic olive oil mar­ket to reach its full poten­tial, in spite of the high-qual­ity advan­tage.

In order to be cer­tain and absolutely trust­wor­thy in what we pro­vide, we carry out much more strin­gent con­trols than the law requires.- Giorgos Tzianoudakis, man­ag­ing direc­tor of Cretanthos

Things are quite dif­fer­ent for healthy eaters abroad though. With the excep­tion of Italy and Spain, where the olive cul­ture is deeply rooted, olive oil and olives are gen­er­ally not geared to mass con­sump­tion. They are bought and enjoyed in small quan­ti­ties and pack­aged in small pack­ag­ing.

Those will­ing to pay the price dif­fer­ence are gen­er­ally con­sumers who are con­scious of the health ben­e­fits of the Mediterranean diet, which is gain­ing ground world­wide. For the healthy eaters the price dif­fer­ence of organic olive oil and olives is rel­a­tively small, as they are in any case con­sumed in very small quan­ti­ties as a nat­ural med­i­cine’ and also offer a unique culi­nary expe­ri­ence.

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On a global scale, the organic food mar­ket has been thriv­ing and is no longer a niche mar­ket. Sales of organic foods in the European Union grew by 47 per­cent between 2012 and 2016. Its value now stands at €30 bil­lion ($34.3 bil­lion). The U.S. and Canadian mar­kets for organic foods rep­re­sent a total value of about €42 bil­lion ($48 bil­lion), while that of China stands at over €5 bil­lion ($5.72 bil­lion).

At the same time, the area of organic farm­land in the EU rose by 18.7 per­cent between 2012 and 2016, ris­ing from 24.7 mil­lion to 29.4 mil­lion acres.

Realizing it has strong poten­tial, Greek olive farm­ers have been switch­ing to organic olive farm­ing. Greece’s organic olive-grow­ing out­put has grown from 22,000 tons to 132,000 tons in five years, account­ing for an aver­age of 8.7 per­cent of the country’s total olives pro­duc­tion in the period from 2013 to 2017.

Moreover, experts esti­mate that there is poten­tial for growth in sales of the domes­tic mar­ket, given that the cur­rent turnover is at a very low level, which leaves room for fur­ther devel­op­ment.

To unlock the poten­tial of organic olive oil and olives, farm­ers of course need to be pre­pared to put in extra work, make a seri­ous finan­cial invest­ment upfront as well as be patient. The fact that olive farm­ing is rel­a­tively straight­for­ward is not enough to ensure suc­cess or sur­vival of the olive pro­ducer in a fast-paced inter­na­tional mar­ket.

Organic suits Greece

Greece has key advan­tages in the pro­duc­tion of organic olives. The olive tree is per­fectly adjusted to the Greek envi­ron­ment and holds few sur­prises for the pro­ducer.

Thanks to the right cli­mate and soil con­di­tions, the olive tree bears yields even in poor years and given proper care, har­vests are abun­dant. At the same time the model of organic pro­duc­tion is in line with the frac­tured small-scale pro­duc­tion typ­i­cal in Greece.

The fam­ily-run small busi­nesses that form the back­bone of Greek olive pro­duc­tion are in a bet­ter posi­tion to meet the needs of the organic rather than con­ven­tional olive oil, which requires a much larger scale of oper­a­tion.

Organic olive oil farm­ers can also explore and cap­ture the advan­tages offered by a great vari­ety of ter­roirs, which bring char­ac­ter and iden­tity that makes a prod­uct unique and able to claim a higher price on the shelf.

New entrants turn to exports

There is a con­di­tion to suc­cess for new entrants into the busi­nesses of organic olive oil. In order to secure a foothold, small enter­prises need to gear their sales to the export mar­kets even more so than traders of con­ven­tional olive oil.

The rea­son is that the reces­sion has hit the retail sec­tor of organic prod­ucts hard. Specialized stores deal­ing in bio-foods have down­sized their oper­a­tions, often choos­ing to cut out the pricier brands from their range of prod­ucts.

Terms of pay­ment have also taken a slide with delays in the pay­ment of pro­duc­ers. At the same time, the risk of clo­sure is also sig­nif­i­cant, which makes the busi­ness envi­ron­ment even more inse­cure.

On the con­trary, accord­ing to Giorgos Tzianoudakis, man­ag­ing direc­tor of Cretanthos, a com­pany that pro­duces and mar­kets organic and con­ven­tional olive oil, export sales are more sus­tain­able, pay­ments are reg­u­lar and orders can be planned six months ahead, which gives SMEs some breath­ing space.”

Strict chem­i­cal tri­als can be the cause of, rise or fall for an organic olive oil busi­ness.

In order to be cer­tain and absolutely trust­wor­thy in what we pro­vide, we carry out much more strin­gent con­trols than the law requires,” Tzianoudakis said. For exam­ple, while the legal thresh­old for the dura­tion of chem­i­cal tests is cur­rently at 12 months, we choose to ana­lyze sam­ples of the same lot every six months to make sure that our extra vir­gin organic olive oil is always within the lim­its of chem­i­cal thresh­olds.”

For a small busi­ness the chal­lenge of div­ing into a large and dynam­i­cally evolv­ing mar­ket, such as the mar­ket of organic olive oil, can be daunt­ing and requires a care­ful strat­egy.

We started out as a com­pany that dealt exclu­sively in organic olive oil, but in the process our cus­tomer asked us for addi­tional prod­ucts which would come in big­ger con­tain­ers and have a lower price,” Tzianoudakis said. To meet our customer’s needs we added con­ven­tional olive oil to our prod­ucts range. However, we esti­mate that the demand for small pack­ag­ing of organic oil in bot­tles of 100, 200 and 500 mil­li­liters will increase in the future and that’s why we choose to organ­i­cally cul­ti­vate all our land.”

Today only a part of our farms is cer­ti­fied as organic,” he added. When the time comes, we will be ready to cer­tify most of our pro­duc­tion as organic and increase the vol­ume of our export sales of bio­log­i­cal extra vir­gin olive oil.”


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