Australia’s olive oil industry is experiencing a significant boom, driven by the rising popularity of the Mediterranean diet and a global supply crisis that has increased demand for premium offerings. This includes unique pairings such as wine-style tastings and the novel combination of olive oil with gelato and coffee.
The industry’s momentum was further highlighted recently when ASX-listed Cobram Estate acquired US producer California Olive Ranch in a $259 million deal. This strategic acquisition, which took 11 years to finalize, marks a significant expansion for Cobram, a company with a market capitalization exceeding $1.8 billion and olive groves in both Victoria and the United States.
Global Supply Challenges and Local Opportunities
The acquisition by Cobram Estate comes at a time when Australian producers are increasing their output to meet the olive oil rush caused by production shortfalls in Mediterranean countries. Traditionally, Italy, Spain, and Greece have accounted for over two-thirds of global production. However, these regions have been severely affected by heatwaves and droughts since 2022.
Spain, the world’s largest olive oil producer, typically yields about 1.4 million tonnes annually. Yet, recent harvests have plummeted to below 700,000 tonnes.
“Southern Europe has been hit by two extremely difficult seasons, and while production is improving, it remains well below earlier highs,” said Gerry Karam, ANZ’s head of food, beverage and agribusiness.
Although prices eased in 2024 from record highs of about $15,000 per tonne, they are climbing again. Karam noted,
“That volatility has been challenging for consumers, but it has created genuine opportunity for newer producers such as Australia.”
Australia’s Premium Olive Oil Market
Australian olive oil is perceived as a premium product, often more expensive than its Mediterranean counterparts. However, the current shortage has led restaurants to increasingly source locally. Last season, Australia produced approximately 20,000 tonnes, meeting about one-third of domestic consumption. This contribution is expected to grow, according to ANZ’s latest Food for Thought report.
The focus of Australia’s olive oil industry remains on high-quality extra virgin olive oil (EVOO), which is made from the first pressing of olives without refining. Beyond its gourmet appeal, EVOO is recognized for its health benefits, attributed to its high polyphenol content, which helps reduce inflammation and improve cholesterol levels.
Cobram Estate’s chairman, Rob McGavin, emphasized the health benefits of EVOO, stating,
“Every day there are articles on extra virgin olive oil and its benefits.”
Health-conscious consumers, ranging from older individuals seeking heart health benefits to younger ones interested in natural eating, are driving this trend.
Expanding Beyond Traditional Uses
As EVOO becomes a staple in daily cooking, its popularity has extended beyond the kitchen. Olive oil lattes and cocktails are now appearing on menus in Melbourne, according to ANZ’s insights. This trend is supported by the appeal of the Mediterranean diet and the growing interest in provenance, freshness, and trusted brands—areas where Australian producers excel.
Richard Seymour, general manager of Mount Zero Olives, noted a surge in inquiries when European supplies dwindled.
“Suddenly we were going from hatted restaurants, our bread and butter for years, to pubs and all kinds of eateries we thought we’d never supply,” he said.
Despite strong business, Seymour cautions that rising prices might lead cost-conscious chefs and consumers to seek alternatives.
Innovative Pairings and Consumer Education
The versatility of EVOO is being showcased through innovative pairings. Alice Massaria, a Sydney-based Italian grocer and importer, runs Olive Oil Hub and Bottega 1900, where she organizes olive oil tasting events. These events, initially attended by chefs and specialized customers, are expanding to a broader audience.
Massaria, who collaborates with gelato chain Rivaereno to pair olive oils with frozen desserts, believes Australians are beginning to appreciate the diverse flavor profiles of EVOO.
“Green, grassy notes, subtle pepperiness, and light bitterness are increasingly recognized as positive sensory indicators,” she said.
As the Australian olive oil industry continues to grow, it not only meets domestic demand but also positions itself as a key player in the global market, leveraging its premium quality and health benefits to attract a diverse range of consumers.
