Spain’s Deoleo says market has entered a new phase
The city of Jaen and the surrounding olive groves and trees, Jaen is known as the Olive Oil capital, producing approximately 25% of the global supply and more than half of Spain’s olive oil production.
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Spain’s Deoleo, the world’s largest olive oil company, said a period of unprecedented volatility had clearly given way to more stable market conditions, citing an unexpected catalyst that would help boost U.S. sales.
“The extremely complex market cycle that occurred between 2022 and 2024, which had a serious but temporary impact on the industry, is now definitely behind us,” Deoleo CEO Cristóbal Valdés told CNBC via email.
Valdés said positive rainfall trends in major producing countries, including Spain, paved the way for a solid global yield for the upcoming harvest, consolidating a more robust and balanced global supply.
The update comes as analysts express concerns about the possibility of global olive oil supplies swinging dramatically from one season to the next, especially as climate change, water scarcity and pest and disease pressures continue.
Deoleo, producer of household olive oil brands such as Bertolli and Carbonell, has previously described the three-year window from 2022 to 2024 as one of the most challenging periods in the history of the industry.
Severe droughts and scorching heat across large swaths of southern Europe decimated the olive oil harvest, resulting in a dizzying price increase that shocked industry veterans and consumers alike.
Olive oil prices have moderated since then, causing a growing number of American consumers to adopt into their daily routines what has long been a staple of a healthy Mediterranean diet.
“This supply stability provides greater predictability across the entire value chain and allows us to anticipate a more stable pricing environment, leading to a recovery in global household demand,” Valdés said.
Alongside Spain, Italy and Greece, it is one of the world’s leading producers of this valuable commodity and a global reference in terms of prices.
According to the European Commission’s latest weekly report, extra virgin olive oil (EVOO) prices in Spain stood at around 3.9 euros ($4.47) per kilogram. dataIt has been maintaining a steady downward trend since the beginning of the year.
It’s a far cry from January 2024, when wholesale EVOO prices rose to a record high of €9.3 per kilogram.
Squeeze the bottles
Specifically, Deoleo’s Valdés said that although the firm’s sales volume growth has improved in key markets, the number of households purchasing olive oil in the U.S. has also increased consistently across all income groups.
Perhaps surprisingly, the company has emphasized the importance of consumer-focused innovation as Deoleo seeks to expand its market share in the country, citing the packaging redesign as helping to boost US sales.
Olive oil bottles on the conveyor on the production line of the Deoleo SA factory in Cordoba, Spain, on Friday, November 11, 2022.
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“Regarding the emerging trends, I believe that innovation adapted to modern culinary habits is the main driver of the market, especially for young consumers and those discovering the benefits of olive oil for the first time,” said Valdés.
“A clear reflection of this is the rise of functional, value-added packaging; in fact, squeeze formats are already driving 40% of the growth of the entire category in the country,” he added, referring to the company’s Bertolli “Dress and Drizz” bottle.
