Around 90% of the world’s olive oil is produced in the Mediterranean, with Spain, Italy and Greece the main producers. But across the other side of the world, Australian olive oil producers are positioning themselves to challenge the traditional giants of the industry, as Matthew Brace reports from Brisbane, Australia.


Australian olive oil producers are positioning themselves to take on the traditional giants of the industry – Spain, Italy and Greece.


According to the Australian Olive Association (AOA)’s Dan Burnet, an olive grower at Spring Gully Olives in Queensland, “roughly 2.6 million tonnes of olive oil are produced annually worldwide with 90% coming from the Mediterranean”.


“However, only 10% is very high quality extra virgin olive oil (EVOO), 20% is produced as virgin oil and the rest must be refined which makes it little better than a basic vegetable oil,” said Burnet. “The refining process removes most of the gastronomic quality and health benefits. Olive oil is very high in antioxidants but once refined they disappear.”


Although Australia has only between five and seven million olive trees compared to hundreds of millions in Spain alone, and its annual production of roughly 2000 tonnes is a fraction of Europe’s, the oils are almost 100% extra virgin,  which is fast becoming the brand of choice among health-conscious European and North American consumers. This is due to a full integration in the supply chain and construction of modern automated agricultural operations. So these New World oils could well have an impact on the EVOO sector of the markets in the northern hemisphere.

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Taking on the European producers


If Australians look like cultivating a similar success with their olive oil as they have with their wine (which overtook French wine sales in British supermarkets recently) then European producers should watch their backs.The AOA said if present planting rates continue, 28,000 tonnes of oil could be produced in 2008 from Down Under with that figure expanding to between 40,000 and 50,000 tonnes in 2015. They expect to surpass French production in about four years.


Food and drink analysts such as Hazel Murphy, an Australian olive oil consultant and founder of the Australian Wine Bureau in the UK, say it is too early to predict precisely the impact Australian EVOOs might make on the traditional markets but she thinks olive oil producers will follow in the footsteps of the successful wine makers.


“Australia has a lot to offer in terms of quality and price/quality ratio but we have only just started and it will take time to gauge the real long term potential. However, I see no reason why our olive oils should not gain the recognition that our wines have,” she said.


“In the USA it is going to be very exciting but ask me again in 12 months. There are certainly opportunities in many markets, particularly the US, but we have a million miles to go and pricing is going to be critical. In UK, for example, the biggest sales are to the catering and restaurant trade which is all about price. This is a very good route to the consumer however it is not as yet huge for the category,” said Murphy.


Exporting to Europe


The first Australian forays into Europe have already begun. The UK’s Tesco supermarket chain is importing Murray Valley Blend oil from the Cobram Estate on the Murray River in north eastern Victoria. Cobram’s other three oils – Premiere, Citron (with lemon oil) and Nevadillo Gold – can also be found in 100 retail outlets in the UK and 250 retails outlets across the US and Canada. Cobram has also recently launched Lemon Twist, a lemon-infused version of the Murray Valley Blend.


The estate’s 25,000 trees of Spanish and Tuscan heritage enjoy a Mediterranean climate and abundant water supply, and it was the first major exporter of olive oil from Australia. Cobram’s Craig Dugan said by working with other growers in the region the estate has been able to establish a large volume international supermarket brand in addition to the single estate oils.


“We are finding that most people will buy our oil once they have had a chance to try it so we need to make more people aware of just how good Australian olive oil can be,” said Dugan. “Considering the number of groves already established in our area and their growing production levels we look forward to our international markets continuing to expand rapidly.” Cobram will increase production to 200,000 litres in 2006.


Across the red centre of the continent in Western Australia the Dandaragan Estate is also exporting to Europe and the US. Dandaragan is in the Moore River region north of Perth and boasts 215,000 trees on 385 hectares.


“At the moment we are on the shelves of some of the UK’s most prominent speciality food stores. We are in Harrods and Harvey Nichols and a number of others,” said Dandaragan’s Gus Simpson. “We are producing 600,000 litres this year and have plans for 1.2m in 2005. We are increasing at roughly 300% per year and we will export about half of what we produce.”


Gino Russo, senior quality assurance consultant at the Queensland Department of Primary Industries and Fisheries, is another Aussie leading the charge. He has been invited by the Spanish, Italians and Greeks to educate them on a new approved supplier quality control programme that he has developed. Spain and Italy also want him to use his knowledge and experience to inspect their processing facilities and machines to enable them to improve the quality of their oils.


Seasonal advantage, disease-free status


The season reversal is also in Australia’s favour. Just as northern hemisphere stocks are running low in the autumn, the latest Australian press (harvested between March and July) is ready to be poured, topping up supplies until the next European stock is in.


Australia has also managed to maintain its disease-free status, a rare and attractive agricultural and horticultural label amid the globalisation of trade and mass travel.


And then there is the novelty factor. Australian olive oil is noticeable on the shelf as a different and interesting product.


The Australian oil taste is already finding firm friends among the cognoscenti. Last year an expert panel in the UK’s Sunday Telegraph newspaper voted an Australian oil – Dandaragan Estate Fruit – their favourite. Australians thrive on being the underdog and the newcomer to any scene or market, and olive oil producers here are salivating at the chance of taking on the masters in Europe.


“Spain is the biggest producer with about 500,000 tonnes of oil each year,” said Dan Burnet at his grove north of Brisbane. “Many of them are doing it the way that their great grandfathers did years ago, yet a lot of the oil coming out of Spain and other European countries is what we would describe as very poor quality – not virgin and extra virgin. We are asking why and offering a non mass-produced very high quality product as an alternative.”


Divine intervention


In the mêlée of business, modern agriculture and hunger for consumers, it is easy to lose sight of some of the unlikely pioneers of the Australian olive industry. Near Dandaragan is New Norcia, Australia’s only monastic town, owned and run by a friendly band of Benedictine brothers.


The monastery was founded in 1846 by Spanish monk Dom Rosendo Salvado. The first monks were determinedly self-sufficient growing their own vegetables, fruit and olives. Today the descendant trees still flourish and the monks make pocket money from the sale of their increasingly sought-after olive oil. The olive groves are the domain of a 93-year-old monk, Dom Paulino Gutierrez, who whizzes between the small trees on a quad bike. The oil is increasingly hard to find as they produce less each year.


Last year’s press was sold within days. Divine intervention perhaps or a sign of Australian things to come?












Expert Analysis





Oil & Fat Manufacturing in Australia 2003


This sector consists of units mainly engaged in manufacturing crude vegetable or marine oils, fats, cake or meal, margarine, compound cooking oils or fats, blended table or salad oils, or refined or hydrogenated oils or fats. The report provides an overview of the key characteristics of the market, including the size of the market, and details on some of the leading players.