A Deep Dive into Olive Oil: The Process and the Rise in Costs

Welcome back, it has been a while since our last blog post! It has been quite the hectic summer, but after two weeks of vacation in the past month, I am back into a work routine that doesn't appear to have any more prolonged trips in the near or distant future. In today's blog, I am going to discuss olive oil. I look into the process of making olive oil, such as how distinctions are made for Extra Virgin Olive Oil, and the process of turning olives on a branch into a liquid form. I also discuss the rise in price of olive oil, and provide you with some of the factors which have contributed to this rise. 

The timing of this blog is not a coincidence. Olive oils are typically used in great abundance during the summer time. For myself, I have been using a lot of olive oil in summer salads, and in marinade preps for cookouts. This blog also coincides with Nick's ongoing sale of one of our top olive oils, Spitiko. We recognized an abundance of stock in the 750ml bottles of Spitiko, and are able to offer a great deal to help combat the rising prices. Both in-store, and online, you can purchase one bottle for $15.00, or two for $25.00! Click the link here to be taken directly to the Spitiko 750ml Bottle product page on our website. 

The Distinctions and Process of Olive Oil

Olive oils are make through a process called extraction. This process includes harvesting, crushing, malaxation of the olives...then centrifuging, separation, and filtration of the oil. While that may sound like a mouthful, the process itself is something you could even do within your own home with the right equipment.

Once the olives are harvested off of the trees, they are entered into a mill. At the mill, they are crushed by a giant hammer, turning them into paste. The paste is then pumped to a malaxer (machine which kneads paste to increase oil percentage). The paste is then pumped into a centrifuge, which separates the solids from the liquids. Finally, a second centrifuge process again filters the oil to its purest form. This entire process takes only four hours, which came as a surprise to me, when you consider the process of making another liquid, let's say beer for example, takes weeks to complete.

For an olive oil to be designated as Extra Virgin Olive Oil (EVOO), it must go through a more strict process. The oil must be from the first cold press. During the extraction process, the olive paste is sometimes heated up, added to water, and/or re-pressed a second time to increase the amount of oil produced per "batch". In doing so, those processes lose the designation of Extra Virgin. EVOO's must be at or below a temperature of 80.7 degrees Fahrenheit throughout the extraction process, and may only be pressed once. The oil must also be chemical-free, which means it is 100% olive "juice". The olive oil cannot contain more than 0.8% free fatty acid. Lastly, the olives must also be fresh and free of defects. Typically, when tasting an EVOO, there is a stronger taste, many describe it to be bitter. The bitterness indicated that the oil was made solely from fresh olives and is full of polyphenols. At Nick's, the vast majority of our olive oils, including Elea Creta, Horio, Iliada, Lefas, Mythology, Partanna, Sparta, and Spitiko and are all EVOO. 

Another type of oil which we carry is Pomace Oil. Pomace oil is made from the solid residue obtained from the olive oil production process. The residue is treated with solvents to extract the oil it contains in crude form. It is then put through a refinement process to ensure it is safe to consume. Pomace oils are used for cooking because they are typically quite affordable, have a high smoke point (good for frying), and has mild flavor, distancing it from compare to vegetable oil. Pomace oil is also prevalent in beauty. Many use pomace oil as part of their skincare routine, while others use it to prevent hair loss. At Nick's we offer two different brands of Pomace Oil, Hermes and Minerva. 

The Rising Prices of Olive Oil...Why?

A year ago, our most popular Olive Oil, Iliada, was $37.50 for a 3 liter tin. Today, it is $52.50. That is an unprecedented 40% rise in price over just 12 months. Producer prices of olive oil have soared up 60% in much of Europe, and up an even more severe 80% in Greece. I have continued to ask myself the same question which many who have come into the store ask me...why? The answer is not as simple as one specific factor, though there is a combinations of factors which can at least lead me to draw some conclusions.

There are three countries which lead the world in olive oil production. The first is Spain, whom are responsible for producing 50% of the world's share of olive oil. Spain's oils are typically robust and peppery in flavor. Following as the second largest producer is Italy, with 80 accredited brands of olive oil production. Italy's oils are often fruity and balanced. Third is Greece, which uses over 60% of their land for olive oil production, and produces the largest share of Extra Virgin Olive Oil per capita. Greece's oils are known to be rich and fruity. All three of these nations have similar climates and soil, which make them hot spots for olive oil production. 

Over the past few years, the climate in the Mediterranean (and surrounding areas) has struggled during prime harvest season. The areas have been subject to severe droughts, which led to a large reduction in the total crop. For the 2024/25 season, it is expected that 2.3 million tons are going to be produced, down from last year's total of 2.5 million tons. Both of those figures pale in comparison to the 2022/23 season, where 3.4 million tons were produced. A decrease of total production by around 33% is the leading indicator for the rise in prices, it is simply supply and demand...something I learned on my first day of Economics. Olive trees are famous for being able to survive in dry conditions, much like a cactus. Even though they "survive", they enter survival mode. During a drought, olive trees use their limited resources for existing functions, such as maintaining existing leaves and fruit, rather than growing. 

Many people much smarter than me have examined the climate on a global scale for decades. While I write all of my blogs without much opinionated writing, this is an issue which I am particularly passionate about. I believe that climate change is a real thing, and I believe that crops such as olive trees will continue to suffer so long as the climate continues to reach scorching temperatures with little to no rainfall over the summertime. If the crop continues to be limited to around 2.5 million tons per year, there is not a feasible way in which olive oil prices will reduce anytime in the near future without drastic changes (probably for the worse) to the taste and purity of the olive oil. Coupled with the climate issue is the general inflation of costs around the world. Energy costs have been rising throughout Europe, which directly correlates to the cost which production companies have for each batch of olive oil they produce, further increasing their prices to consumers and distributors alike. As I said at the beginning of the paragraph, there are people much smarter than me who are tasked with solving this problem, and I hope that one day, there will be a solution.

Thank you for reading along, I appreciate the support which this blog continues to receive. I hope that at the very least, this blog was informative to you.

Enjoy your weekend, see you soon!

- Nick's