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18 July, 2024
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Greek olive oil producers reject bulk sales, thrive in export market

Greek producers navigate international markets

Kathimerini Greece Newsroom

By Tania Georgiopoulou

They knew the easy way. They could have effortlessly sent their oil in bulk to Italy. But they didn’t choose that path. Instead, they decided to bottle their extra-virgin olive oil locally and export almost all of it abroad. And their decision is paying off.

Greek olive producers and processors explain how they managed to export the majority of their production. They recount their experiences in the international market and the significant challenges posed by the rising price of olive oil. They predict that prices will gradually return to more reasonable levels, provided that Spain’s production goes as expected. “Because they set the prices, not us,” they note.

Their olive oil isn’t sold in the Greek market due to a lack of demand. In Greece, famously, the best oil is made only by someone you know, who sends it in a tin can.

‘At the mercy of the Italians’
Vangelis Chrysafoudis – Agriston, Kavala

Vangelis Chrysafoudis, an olive oil producer who inherited the business from his father but is new to bottling, creates extra-virgin olive oil from Halkidiki green olives. This variety is usually sold for consumption due to its higher price. “It makes unique extra-virgin olive oil,” he says proudly. To control the quality, he built an olive mill. However, he decided to fully verticalize his production after a packager he had worked with for three years deceived him by using different oil in bottles with his brand name, “resulting in my disgrace and, of course, losing the customer.”

“We are consumers of olive oil but not ‘good consumers,’ because we all have ‘a cousin who makes the best oil.’ However, when people died in Spain in 1990 from adulterated oil, they passed a law allowing only 100 kilograms of bulk olive oil for private consumption,” he explains. Naturally, since there is a lot of bulk olive oil in Greece, Italians and Spaniards exploit the situation, buy it, package it and resell it at higher prices. “The Italians export 150% of the olive oil they produce. We are lazy, preferring the ‘You come load it and do whatever you want with it, see you next year’ tactic. But when you sell in bulk, you’re at the mercy of the Italians. If you sell it packaged, at least you control your own game. So, in 2018, we decided to build an olive mill.”

The first oil from the company’s mill was an unpleasant surprise. “We realized how bad our oil was compared to what we knew we could produce. So, we got to work. We learned to operate the machines correctly, conduct continuous checks and hired a taster.”

The next step was the packaging facility, so now Chrysafoudis fully controls the product, which is exported to Sweden, France, Canada, the US and Germany.

But just as everything was going well, production suddenly decreased. “Two years ago, we produced 500 tons of oil, and last year, 70,” says Chrysafoudis. “The reduced production shattered my dreams. If I had more olive oil, I could have opened many more doors. Still, I won’t go back to selling at 1.50 euros per kilo. I’ll manage,” he concludes.

Suspicion among importers
Kostas Kydonakis – Oleum Crete Olive Oil, Messara Groves, Iraklio

‘Supermarkets in Greece pay after six months. You deliver the oil today and get paid in September. We don’t have the capital to endure such delays, nor can we take that risk’

The family olive mill has been in operation since 1983. Like many others at that time, they sold their production to traders, who then sold the oil in bulk to Italy. Today, all the oil produced by the family grove, as well as by other associated producers, is packaged and exported. “I loved working at the olive mill. I remember counting down the minutes in school until I could go work at the mill,” says Kostas Kydonakis.

The work was straightforward: receive the olives, process them into oil, give the oil to the trader and not worry about what happened next. When Kydonakis fully immersed himself in the business, he decided to try exporting bottled olive oil under the company’s name. “In 2015, I started attending olive oil exhibitions worldwide. That’s when I realized that olive oil is just another food product, not something unique to us. When I said I was from Greece, people looked at me strangely and asked, ‘Does Greece produce olive oil?’” Kydonakis recalls, still surprised. The belief that we produce the world’s best olive oil isn’t as widespread as we think.

breaking-away-from-selling-olive-oil-in-bulk2“The competition is fierce, and first of all, you have to prove that you’re honest,” he says, explaining that in 2015, this was not a given. “We talked with importers from all over the world, and they asked if we were a cooperative. They said, ‘We’ve been burned by cooperatives and don’t want to get involved again,’” he recounts.

Consistency in quality and reliability in delivery are the only ways “to do business abroad.” Today, Greek companies have achieved this, he assures. Oleum Crete now exports to 45 countries, including China, Japan, Taiwan, South Africa and the US, meeting each market’s specifications.

The mill collaborates with other producers to increase export volumes, but “there’s still a long way to go.” Exports also mean better cash flow. “Abroad, we get paid as soon as we send the first invoice. The shipment is still on the ship, and we’ve received the money,” says Kydonakis.

How has the increase in olive oil prices over the past two years affected the business? “We had two consecutive bad years in Spain, the world’s top producer, so price increases were expected. But what happened was excessive. In August 2022, the average price per liter was €3.5; by April 2023, it was €5; and by May 2023, it reached €8.5, and in 2024, even €9. Due to the price increase, our sales dropped by 50%, but at the same time, prices increased by 200%. I believe that this year, with Spain having an average production, the market will stabilize,” says Kydonakis.

Cretan oil in Brazil
Nikos Renieris – Kissamos, Hania

The family olive oil from Kissamos is exported directly to 40 countries worldwide. Unfortunately, Greek consumers can only taste it abroad, as 90% of the bottled olive oil is exported. The family business, which initially only produced olive oil, began bottling in the 1990s. “My father was convinced that to gain the added value he wanted, he had to export it packaged,” says Nikos Renieris.

“To differentiate, the packaging had to be unique. We looked for bottles made in Italy, but they were too expensive and would have significantly increased the product’s cost. So, my father designed the bottles himself in wood and then contacted glassmakers to manufacture them,” he recalls.

The initial exports followed the path of the Greek diaspora. “We started with the Greeks in Australia. In 2006, we attended our first Global Food Marketplace (SIAL) exhibition in France, where ours was the only Greek olive oil.” There, the then-17-year-old Renieris realized how vast and competitive the food sales market is. You can sell olive oil anywhere in the world, but so can many others. “The advantage of quality is crucial. If someone tries it and wants to taste it again, they will seek it out.”

Renieris olive oil has been sold for 15 years to an emerging but challenging market: Brazil. “In Brazil, they are not accustomed to eating olive oil; they are slowly incorporating it into their diet. But there is significant growth potential,” he explains.

Regarding the high prices of recent months, Renieris notes that a business might incur losses at times because it has to buy expensively when there are no reserves and demand increases. However, the overall trajectory is what matters, not whether you win or lose in a specific period. “It’s important not to rely solely on one market,” he adds.

Competing with quality
Nikolaos Athanasopoulos – Vatsiko Olive Oil, Gargalianoi, Messinia

The team behind Vatsiko extra-virgin olive oil, made from the Koroneiki olive variety and labeled as a Protected Designation of Origin (PDO) product, is a cooperative established in 2004. The long wait for payment in the domestic market was a primary motivator for the producers to focus on exports from the beginning. “Supermarkets in Greece pay after six months. You deliver the oil today and get paid in September. We don’t have the capital to endure such delays, nor can we take that risk. Abroad, we get paid before the product even leaves our warehouse. In fact, Germany pays two months in advance,” Athanasopoulos says. However, competition abroad is fierce. “Spain has lower production costs and can sell more cheaply. Therefore, we had to create a competitive product, and the only solution was a better product,” he explains. In the early years, the amount of bottled olive oil they exported was small, but its success in international competitions provided the passport they needed. All the oil they bottle goes abroad, though significant quantities are still sold in bulk to Italy. “We’re making progress, but it requires a lot of effort. It was only in 2021 that we managed to establish our own facilities for bottling and storage,” he adds.

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