Global Olive Oil Market: Export Opportunity Analysis

Global Market Forecast

The olive oil market was estimated to be valued at USD 8.2 billion in 2018 and expected to reach 11 billion by 2025 at a CAGR of 4.2%.

By product, the market is mainly segmented into virgin and processed olive oil. The largest segment is virgin olive oil, generating about 70% of total revenue, and expected to grow at a CAGR of 5% during 2017-2025. By application, it is mainly segmented into food & beverage, personal care, and pharmaceutical. The largest segment is food & beverage, dominating about 85% of the global market share, and anticipated to increase at a CAGR of 4.5% during 2017-2025. Industry ARC reports, in the next five years, the growth of the market will be driven by its positioning as a healthier alternative to fatty oils and as a disease-fighting food.

Export/ Import Analysis

Statista reports the global olive oil trade was estimated to be valued at USD 2.26 billion in 2018. Spain was reported to be the largest exporter with 36.6% of the global olive oil export, followed by Italy with 24.2% and Greece with 19.4%. The major European exporters, such as Spain, Italy, Greece, and Portugal, dominate about 76.3% of the global exports and they are the major suppliers for the United States, Australia, Japan, and China. European exports of olive oil are expected to grow at a CAGR of 3.3% during 2019-2030.

Spain was also reported to be the largest importer in 2018. It dominated 19% of the global olive oil imports, followed by Italy with 18.6% and the United States with 8.3%. Spain consumes about 500,000 tonnes of olive oil every year, which is equivalent to more than 3 gallons per person per year. There are more than 260 types of olive oil with a wide range of flavors from spicy to sweet and smooth to acidic. Major types of olive oil in Spain are picual, arbequina, hojiblanca, and  cornicabra.

Global Growth Opportunity Analysis

Europe was reported to be the world’s largest consumer due to the popularity of Mediterranean foods, accounting for around 53% of the world's olive oil consumption. Mediterranean foods are well known for the high use of olive oil which is often produced under the Mediterranean climate in Spain, Italy, and Greece. Europe was also reported to be the world’s largest producer, producing about 67% of the global supply of olive oil. During 2019-2030, while European olive oil production is expected to increase by 1.1%, the major growth will be witnessed in Portugal which is expected to be the world’s third largest producer of olive oil by 2030.

The Asia-Pacific region was reported to be the fastest growing region with a CAGR of 4.0% during 2017-2025. It heavily relies on imports from Greece with 48.1% of its total imports, Morocco with 29.2%, and Italy with 6%. The rising awareness of health/ medical benefits of olive oil consumption play an important role in the growing the Asian-Pacific market of olive oil, specifically in China and India.

Trend Analysis

Olive oil demand is significantly increasing on a worldwide scale. One of the factors is increasing health/ medical benefit awareness of olive oil consumption. Olive oil contains antioxidants that help prevent cardiovascular diseases. It is also used as a healthier alternative to fatty oils in order to meet the growing demand for unsaturated fat food and beverage. Other factors include growing disposable incomes and changing lifestyles and consumer preferences for diet.

While olive oil is mainly used in food and beverage, there is an increasing demand for personal care. Today, where olive oil was revealed to be good for skin and hair due to its rich source of vitamins and minerals, it is often used in soaps, shampoos, facial masks, and creams. Olive oil consumption in the cosmetic industry is expected to increase at a CAGR of 5.5% during 2019-2025. This is creating potential growth and opportunities for the olive oil market.

The olive oil market is currently experiencing lower prices; the retail prices for olive oil went down by more than 21.01% from one year ago. As Spain and Italy struggle with the coronavirus, supply chains have been interrupted and distributors are looking to diversify their networks. With a diversified portfolio, a firm can protect itself from the risk imposed on them by factors such as the coronavirus.

United States Market Analysis

The world’s second-largest consumer, the United States, was reported to hold a total olive oil consumption of 400,000 tonnes in 2019. Increasing health/ medical benefit awareness of olive oil consumption and changing consumer preferences for diet will keep the fueling demand of olive oil in the United States. In order to meet the growing demand, the United States relies 95% of the total demand on imports from Spain with 42% of its total imports, Italy with 39%, Tunisia with 6%, Morocco with 3%, and Greece with 3%.

Recently, the United States imposed a 25% tariff on olive oil imports from the EU countries, and it was estimated to generate a profit of around USD 9.4 billion. As a result, the retail prices of olive oil have dropped by 5%, down to USD 2.31 per kilogram. Meanwhile, the United States produces around 20,000 tonnes of olive oil every year, accounting for 5% of its total consumption of olive oil. Major olive oil producing states are California, Arizona, Texas, Georgia, and Florida.

While the olive oil trade deficit is significantly growing in the United States, the wide gap between imports and exports makes it difficult to meet the growing demand for olive oil. In the United States, today, 40% of consumers choose extra-virgin olive oil over others. Extra-virgin olive oil is the most popular, and it will be expected to grow significantly in the next five years.

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Source: Statista, World's Top Export