Australian olive oil’s health-led boom
Australia’s olive oil industry is booming as the popularity of the Mediterranean diet coincides with a global supply crisis that has led to increased demand, including wine-style tastings and premium offerings such as pairings with gelato and coffee.
The momentum of the Australian olive oil sector has reached new highs in the past fortnight with news that ASX-listed heavyweight Cobram Estate has acquired US producer California Olive Ranch in an 11-year, $259 million deal.
Cobram, which has a market value of more than $1.8 billion and has yards in Victoria and the US, sells under a number of brands including Red Island, with products stocked in Coles and Woolworths and increasingly exported.
The purchase comes as Australian producers increase production in response to an olive oil rush caused by shortages in Mediterranean countries.
Olive oil producers in Italy, Spain and Greece, traditionally responsible for more than two-thirds of global production, are still reeling from severe heat and drought conditions that began in 2022.
Spain, which typically produces about 1.4 million tonnes of olive oil each year, has seen harvests fall below 700,000 tonnes.
“Southern Europe has been hit by two extremely challenging seasons and, while production has increased, it remains well below previous high levels,” said Gerry Karam, head of ANZ’s food, beverage and agriculture business.
Karam said prices fell from record levels in 2024 (reaching nearly $15,000 per ton at one point) but appear to be rising again. “This volatility has been challenging for consumers but has created a real opportunity for new producers like Australia,” he said.
Karam said Australian olive oil had a reputation as a premium, more expensive product, but the shortage had turned restaurants’ searches to the local sector.
Last season, local production was approximately 20,000 tons, covering approximately one-third of domestic consumption. According to ANZ’s latest statement, this contribution is expected to increase further Food for Thought insight report found.
“Global production will eventually return to normal, but the market has fundamentally changed,” Karam said.
‘It is no longer niche content’
The focus of the Australian olive oil industry continues to be on premium extra virgin oil (EVOO), the highest quality made with just a single pressing and without the need to refine the product to remove defects.
Beyond its gourmet cooking oil status, EVOO has emerged as a health food. Its high polyphenol content, an antioxidant that helps reduce inflammation and improve cholesterol, among other benefits, is proving to be a lucrative feature for EVOO manufacturers.
This was acknowledged by Cobram Estate when announcing its expansion into California. President Rob McGavin told Australian Financial Review ″“There are articles about extra virgin olive oil and its benefits every day.”
Health-conscious consumers come from all walks of life. Insights from ANZ revealed: “For older consumers this can be seen to improve heart health and moderation, while for younger consumers it is linked to natural nutrition, healthy living and authenticity.”
Karam said the promotion of olive oil as a health food means that olive oil “is no longer a special ingredient but part of everyday meals, supported by health trends and the appeal of the Mediterranean diet.”
“This change is increasing interest in provenance, freshness and reliable brands, which are areas where Australian producers excel,” Karam said. In addition to this appeal, Australia’s off-season harvests are being brought to market while stocks are decreasing in the northern hemisphere.
Mount Zero Olives, which sources produce from Victoria’s Wimmera and Grampians, was “inundated with questions”, general manager Richard Seymour said.
“When European supply was really suffering, we noticed this almost insatiable demand for information about Australian olive oil,” said Seymour, whose premium olive oil business pivoted largely to sourcing and pressing the fruit after selling properties where his family had previously grown gardens.
“All of a sudden we were going from hat restaurants that had been our bread and butter for years to bars to all kinds of eateries that we thought we would never supply,” he said.
Business is so strong that Mount Zero is forced to turn down some requests from restaurants to make sure they meet the demand of long-term customers. However, Seymour warns that while revenue may increase due to price increases, cost-conscious chefs and consumers may be tempted to buy less in terms of volume and turn to alternatives if prices rise further.
Seymour also notes that the relatively small yield from each olive when making EVOO means margins are tight.
“If you’re making grape juice, 90 percent of the grape juice is marketable, but with olives it’s somewhere between 10-20 percent,” he said. Up to 5 kilograms of olives may be required to make a standard 500ml bottle of EVOO.
Harvesting fruit early results in a smaller yield but a more complex flavor, while producers producing lower-quality, flatter-tasting products may wait for orchards to mature to get higher yields from each press.
Mount Zero’s two-litre bulk containers – albeit at slightly higher prices than mid-market produce stocked in major supermarkets Oils of various olive varieties such as picual, frantoio and coratina sell for $58 – Seymour said the number of customers coming from outside the restaurant is increasing due to the gourmet flavors and health benefits.
“This has a triple effect; it increases the hedonic value of your work because it is so delicious, and it contributes to its health value and sustainability,” he said.
Latte, gelato and olive oil tasting
EVOO’s growing popularity has taken it far beyond the kitchen. olive oil latte Cocktails are appearing on menus in Melbourne, according to ANZ’s insights.
Alice Massaria, a Sydney-based Italian grocer and importer, is among those catering to a more sophisticated customer. Massaria with his partner Enea La Mantia, premium EVOO store and information site, Olive Oil Hub. They too He runs Bottega 1900, a store in Sydney’s Brookvale that sells specialty balsamic vinegars and wines, as well as EVOO.
Massaria, who imports largely from Italy and sells them with lists of their polyphenol content, said awareness and interest in specialty EVOO had increased in Australia in the last few years. As a qualified sommelier and wine director in Sydney’s restaurant scene, he hopes to bring the same level of integrity to olive oil.
Since its launch in 2020, Bottega 1900 has also been organizing olive oil tasting evenings, similar to wine-style events. Initially, chefs and expert customers were most interested in tastings, but Massaria said that’s expanding.
“Reactions [at tastings] “It’s often an eye-opener for people,” he said. “They show that premium extra virgin olive oil is not limited to the kitchen counter…many Australians are just beginning to discover its true potential.”
Speaking from Italy, where he visited producers before the new season European harvests, which come to Australia for sales starting from February, Massaria said: previously collaborated with ice cream chain Rivaereno to pair different olive oils to drizzle over frozen scoops. One of his fine dining restaurant customers also added EVOO-topped ice cream to his menu.
These unconventional pairings allow EVOO’s diverse flavor profiles to shine; This is something he believes Australians are following.
“Green, grassy notes, a slight peppery taste and slight bitterness, sensations that may seem unfamiliar at first… are increasingly recognized as positive sensory indicators rather than defects,” Massaria said.
The Business Briefing newsletter delivers big stories, exclusive news and expert insights. Sign up to receive it every weekday morning.
Elias Visontay is the National Consumer Affairs Reporter for The Sydney Morning Herald and The Age.Connect via email.
