Surrounded by the city of Jaén and its surrounding olive groves and trees, Jaén is known as the olive oil capital, producing around 25% of the world’s 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 instability has revealed more stable market conditions, which are unlikely to translate into increased U.S. sales.
“The highly complex market cycle we experienced from 2022 to 2024, which had a profound and temporary impact on our industry, is now definitively over,” Deoleo CEO Cristóbal Valdez told CNBC in an email.
Valdes said favorable rainfall trends across major producing countries, including Spain, paved the way for stable global yields for future harvests, reinforcing stronger and more balanced global supplies.
The update comes as analysts raise concerns about the potential for dramatic seasonal fluctuations in global olive oil supplies, especially as challenges such as climate change, water scarcity, and pest and disease pressures continue.
Deoreo, the maker of household olive oil brands such as Bertolli and Carbonell, previously said that the three years from 2022 to 2024 will be one of the most difficult periods in the industry’s history.
Severe drought and scorching heat across vast swathes of southern Europe have destroyed much of the olive oil crop, culminating in dizzying price increases that have shocked industry veterans and consumers alike.
Since then, the price of olive oil has fallen, and more U.S. consumers are incorporating what has long been a staple of the healthy Mediterranean diet into their daily lives.
“This stabilization of supply will increase predictability across the value chain and allow us to expect a more stable pricing environment, which will support a recovery in global household demand,” Valdez said.
Along with Italy and Greece, Spain is one of the world’s leading producers of valuable goods and sets a global benchmark for prices.
Extra virgin olive oil (EVOO) prices in Spain are around 3.9 euros (about $4.47) per kilogram, continuing a steady downward trend since the start of the year, according to the European Commission’s latest weekly data.
This is a marked contrast to January 2024, when the wholesale price of EVOO soared to a record high of 9.3 euros per kilogram.
squeeze the bottle
Notably, Deoreo’s Valdez said that while the company’s volume growth has improved across major markets, the number of U.S. households purchasing olive oil has also increased consistently across all income brackets.
Perhaps surprisingly, the company credited the redesigned packaging with contributing to the increase in sales in the U.S., emphasizing the importance of consumer-centric innovation as Deoreo seeks to expand its market share in the country.
Bottles of olive oil on a conveyor on a production line at the Deoleo SA factory in Cordoba, Spain, Friday, November 11, 2022.
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“When it comes to new trends, we believe the main market driver is innovation that aligns with modern dietary habits, especially for younger consumers and those discovering the benefits of olive oil for the first time,” Valdez said.
“A clear reflection of this is the rise of functional, value-added packaging. In fact, squeeze formats are already driving 40% of overall category growth in this country,” he added, referring to the company’s Bertolli ‘Dress and Drizz’ bottles.
