California’s Olive Oil Revolution
Long before Napoleon invaded Egypt, before the Romans marched into Carthage, before Athens fell to Sparta—the olive conquered the Mediterranean. Olive trees (Olea europaea), native to the Mediterranean basin, are among the earliest known cultivated trees in the world, first domesticated between 6,000 and 8,000 years ago. Archaeologists have found olives in Egyptian tombs from 2000 B.C. Greek myth has Athena creating the olive tree to give to the Athenians, who then named their city after her.
Extraction of the oil of Olea europaea is no less ancient. A clay pot containing olive oil was found in the city of Ein Zippori, modern-day Israel, from 8,000 B.C. Olive oil was important enough to develop religious symbolism in Judaism, Christianity, and Islam. And Homer famously called the stuff “liquid gold.”
Now this ancient icon is getting a modern makeover in California. In a planting layout known as super high density (SHD), olive trees are grown close together and trimmed like bushes—enabling farmers to squeeze in a staggering 900 trees per acre instead of the traditional 50. This process allows the trees to be harvested mechanically rather than by hand, saving a tremendous amount of time and money, and their fruit immediately pressed into oil. And what olive oil may have lost in poeticism to industrialized farming, it may be gaining in quality. California olive oils are becoming among the best in the world, and the New World industry is trying to position itself as a higher quality producer than Old World competitors like Italy, Greece and Spain.
Background
In its millennia-long history, olive farming for oil remained virtually unchanged. Olive orchards stood, often with the same trees for hundreds of years, slowly producing fruit for the harvest every year in late autumn, when olives were harvested in one of two ways. The first is by shaking the tree to dislodge fruit and let them fall, and collecting them from the ground. The problem with this method is the fruit can be bruised from the landing, or mixed up with overripe fruit that is already on the ground, and both bruised and overripe fruit make poorer quality oil. The second method, handpicking the ripe fruit directly from the tree, better screens for quality, but can be incredibly time-consuming. While farming other crops became mechanized, olive farming stuck to its traditions.
Then in the 1980s, some olive growers in Spain and Italy, in order to maximize their yields per acre, began irrigating orchards and experimenting with planting trees closer together—about 300 trees per acre instead of the traditional 50. They also pruned the trees to reduce the space each occupied and began harvesting with mechanical tree shakers. These “high-density” orchards dramatically increased yields and profits for olive farmers.
Then the real leap forward came in the mid-1990s when a Spanish tree nursery company called Agromilla experimented with planting irrigated trees even closer to one another, only three or four feet apart, and in long rows, squeezing in up to 900 or 1,000 trees per acre. Agromilla used a common Spanish variety that grows like a bush, allowing the trees to be harvested with an over-the-top tree comber that strips the fruit from branches as it drives down the row. Harvesting by hand, one person can collect about 5 to 6kg of olives in an hour; with a mechanical harvester on a SHD orchard, one person can harvest up to 555,500 kg per hour.
Investors at Agromilla took this process, known as super-high-density (SHD) harvesting, and invested in a new company in California, founded in 1998. One of the pioneers in SHD farming in the state, California Olive Ranch is now the largest olive oil producer in California in an industry that has grown rapidly due to the California Central Valley’s suitable weather, robust infrastructure, and agricultural expertise.
In 1998 the first SHD olive acres were planted in California; by 2008, an industry survey found that 12,137 acres of SHD olive orchards had been planted in the state, with 92 percent of those planted between 2005 and 2008. No official survey has been conducted since, but California Olive Ranch estimates that there are about 22,000 SHD acres in the state today. Before these types of orchards were planted, olive oil production in California rarely exceeded 1,000 tonnes. By the 2014-15 marketing year, California pumped out eight times that much.
This growth is not only due to newly available technology—on the demand side, the market was ripe for quality olive oil. Olive oil started to become popular in the US in the late 1980s and 1990s as praise grew for the Mediterranean diet, found to potentially reduce the risk of numerous ailments, such as cancer, osteoporosis, Alzheimer’s, heart disease, high blood pressure, and high cholesterol. Because there was almost no olive oil production in the United States, virtually all of the supply to meet the growing demand was imported. From 1980 to 2000 (before Californian oil production had taken off), olive oil imports increased from 28,000 tonnes to 212,000 tonnes. By 2015, even with the growth in domestic production, imports hit 315,000 tonnes.
Olive oil labeling fraud
But consumers weren’t always getting what they thought they had paid for. In addition to issues with outright fraud, international quality standards on extra virgin olive oil (EVOO)—i.e. cold-pressed, with no additives and minimal acidity—are not well enforced, and there have been numerous incidences of lower-quality vegetable oil or heat-treated olive oil labeled and sold as “extra virgin.”
A study published in 2010 by the University of California, Davis’s Olive Center found that 69 percent of a selection of imported EVOOs found in California supermarkets (as well as 10 percent of Californian EVOOs) didn’t meet standards set by the world’s largest olive trade group, the International Olive Council (IOC). Critics point out that the 69 percent figure was arrived at via taste tests, rather than chemical ones, and funded by California olive oil producers. Nevertheless, the tasting panels were officially recognized by the IOC, and follow-up chemical tests found that many of the oils still failed to meet some standards. (Check out Gro Intelligence’s Insight on food fraud for more on mislabeled EVOO.) The concerns have even been enough to prompt the United States House of Representatives Committee on Agriculture, to require the Food and Drug Administration (FDA) to test imported olive oil on the grounds of health concerns, and then report back to Congress on its findings and plans to ensure fraudulent oil doesn’t reach consumers.
Quality-focused
California producers are hoping to provide a solution to the fraud. The state’s olive oil industry has positioned itself as an underdog producer of high-quality, rigorously checked oil in the face of European mega producers with questionable track records and lax certification. Its main trade body, the California Olive Oil Council (COOC) has even set its certification standards stricter than international standards set by the IOC—mandating a maximum of 0.5 free acidity content compared with the IOC’s 0.8 percent.
Now California’s olives are starting to become recognized. In the past three years, US olive oil has come away with the third-highest number of awards behind Spain and Italy at the New York International Olive Oil Competition, the world’s largest and most prestigious competition (most of the entries came from California, but a few came from Texas, which produces a small fraction of what California does). Furthermore, in 2014, the first year of the competition, the only US winner of the Best in Show award (the competition’s highest prize) was a California SHD producer, Enzo Olive Oil.
Making premium EVOO the new normal
Traditionalists argue that mechanical super-high-density farming is too crude: Mechanically-harvested olives can’t be as easily checked for quality compared with handpicked olives, and SHD is only compatible with three olive varieties, all dwarfs—Arbequina, Arbosana, and Koroneiki—limiting the spectrum of flavors producers can achieve. That’s not to say these three produce poor quality oils—far from it. Arbequina and Arbosana are well-known, well-appreciated and widely produced Spanish varieties, and Koroneiki is a robust Greek variety that has often been used to spice up poor-quality Spanish and Italian oils. Olive oil is a lot like wine in this regard: Different olives have different profiles that cater to different tastes, and oils (both high- and low-end) are often blended to optimize flavor. Arbequina has a mild, buttery flavor that has a reputation as an everyday olive oil. Arbosana and Koroneiki are much more bitter and robust varieties that might not pair well with all foods. At the 2016 New York International Olive Oil Competition, Arbequina and Koroneiki oils even won the second- and third-highest number of awards, respectively, behind a Spanish variety called Picual, which accounts for more than 25 percent of global olive oil production.
Indeed, the majority of olive oil award winners (from California and elsewhere) produce traditional, artisanal oil, often from handpicked olives. But still, the fact is, SHD orchards are producing award-winning oils, which may help in making high-quality extra virgin olive oils available to a wide spectrum of consumers without the traditional premium price. SHD allows harvest costs to be more than halved compared with handpicked olives. A $6.98 500ml bottle of California Olive Ranch EVOO, if pressed from handpicked olives, would cost over $20.
In April 2016, trade groups from the United States, Australia and Chile came together to create the World Olive Oil Trade Group, an international body made up of “New World” countries rivaling the more Eurocentric International Olive Council. The new trade group aims to create higher standards for olive oil. The group’s vision, the affiliate Australian Olive Association states, is “for a globally competitive and growing market for olive oil, free of fraudulent or mislabeled product, supplied by producers who farm in a manner that is socially responsible and sustainable.” In short, it wants to one-up the IOC.
California producers have also had a recent stroke of luck in taking on European competitors. A bacterial disease known as Olive Quick Decline Syndrome (OQDS) has infected orchards across Southern Europe, shrinking production, and causing widespread tree death. More than 1 million trees have been affected in Italy, and the epidemic is expected to worsen. (Read more about OQDS in another Gro Insight.)
Water concerns make olive farming more attractive
California is entering its fifth consecutive year of drought in 2016, putting a strain on the state’s water usage. According to the state’s latest drought report from mid-April, snowpack was 70 percent its normal level, while water levels were below average in nine of 12 major reservoir and 2,180 wells were identified as critical or dry. Accounting for 80 percent of human water use in California, agriculture is by far the largest user of water in the state, and participants in the sector have naturally been particularly concerned by the drought.
Lawmakers in California are now working to make the state’s water consumption more sustainable. Signed into law in September 2014, the Sustainable Groundwater Management Act signified a major shift in the oversight of water resources by transferring responsibility from the state authorities to local actors. The management of groundwater is now broken down into 515 separate locally managed basins, whereby each local agency will manage its own water and California as a whole can avoid a “tragedy of the commons” with everybody using too much water and no one to blame.
Agricultural water users in some of these districts may find it harder to meet their requirements, and super-high-density olive farming may provide a viable answer. Several of California’s major cash crops, such as almonds, grapes, pistachios and walnuts already require similar temperature and sunlight conditions to olives. Mayo Ryan, the Vice President of Agriculture at California Olive Ranch, points out that SHD olives use far less water than these crops. According to Ryan, California Olive Ranch uses about 1.3 acre-feet of water on each acre per year; meanwhile, grape vineyards use about 2.5 acre-feet, almonds about 3.0, and pistachios over 4.0.
Industry growth
If demand for California olive oil keeps rising, farming SHD olives may become an increasingly lucrative opportunity. Almond growers, for example, have received high prices for their crop in the past few years, in part because of higher water costs. In 2012 through 2014, average yearly almond prices were $2.58, $3.21, and $3.19 per pound , respectively, and in some months they topped $4.00 per pound. But the steep prices are beginning to affect demand, which in turn is pushing prices down again.
“Walnuts, pistachios and almonds have been priced great in the past few years, but now the price is dropping,” says Ryan. “With almonds at $2.00 per pound, super-high-density olives are very competitive, especially if water costs are high.” Farmers looking to plant fruit or nut trees are starting to consider olives much more seriously, he says.
And there is certainly room for growth. In 2014, California harvested 870,000 acres of almonds, 865,000 acres of grapes, 290,000 acres of walnuts and 221,000 acres of pistachios. In the same year, only 37,000 acres of olives were harvested. “We’re still on the forefront of this,” says Ryan. “We’re where the wine industry was 40 years ago, where pistachios were 20 years ago. We can look at those industries as case studies and see how they’ve grown.”
If California Olive Ranch itself is any indication, the industry’s growth trajectory is promising. The company’s retail sales have grown more than 40 percent every year for almost a decade, from $280,000 in 2009 to $33 million in 2015. Total company revenue, including foodservice and private-label buyers as well as sales from an Italian brand called Lucini the company bought in 2015, clocked in at about $100 million in 2015. Currently, about 13,000 acres of SHD olives are crushed to make the company’s extra virgin olive oil, and Ryan says he expects that figure to double in the next five years.
Conclusion
The most rigorous taste and chemical tests of olive oils produced in super-high-density orchards support what the pioneers of the technology have long argued: SHD can provide high-quality extra virgin olive oil at a fraction of the usual cost.
And for California, one of the global leaders of SHD production, the opportunity is particularly exciting. Nearly 97 percent of olive oil consumed in the United States is imported, indicating a massive, growing market for the product. Even in the face of California’s persistent water shortages, and in the face of a changing climate which may make these shortages the norm, olives may be a viable and sustainable product for the state. California, which already experienced one gold rush a century and a half ago, may be on the brink of another, “liquid gold” one today.
