Australia's olive oil industry is experiencing growth, driven by the popularity of the Mediterranean diet and a global supply crisis that has increased demand. This expansion was highlighted by the ASX-listed company Cobram Estate's acquisition of US producer California Olive Ranch for $259 million. Cobram Estate, with a market capitalization exceeding $1.8 billion, operates groves in Victoria and the United States, selling brands such as Red Island through major retailers and for export.
The global supply crisis stems from severe heat and drought conditions in Mediterranean countries like Italy, Spain, and Greece, which began in 2022. These nations traditionally account for over two-thirds of global production. Spain, typically producing 1.4 million tonnes annually, saw harvests drop to below 700,000 tonnes. While prices eased from record highs in 2024, they appear to be rising again, creating opportunities for newer producers like Australia, according to Gerry Karam, ANZ's head of food, beverage and agribusiness.
Australian olive oil is recognized as a premium product. In the recent season, local production reached approximately 20,000 tonnes, supplying about one-third of domestic consumption, a contribution expected to increase. The industry primarily focuses on high-quality extra virgin olive oil (EVOO), produced from a single pressing without refining.
Beyond culinary use, EVOO's health benefits, particularly its high polyphenol content (an antioxidant that may reduce inflammation and improve cholesterol), are a significant market driver. Cobram Estate chairman Rob McGavin noted increasing media coverage on EVOO's health advantages. Richard Seymour, general manager of Mount Zero Olives, reported a surge in inquiries for Australian olive oil when European supply diminished.
Australia's counter-seasonal harvests provide an advantage, bringing new products to market as northern hemisphere stocks decrease. Despite increased revenue from price rises, Seymour cautioned about potential volume reductions if prices continue to climb, as cost-conscious chefs and consumers might seek alternatives. He also highlighted tight margins due to the low oil yield from olives, typically 10-20 percent per fruit, compared to 90 percent for grape juice.
Interest in specialty EVOO is growing in Australia. Businesses like Sydney's Bottega 1900 and Olive Oil Hub organize tasting events similar to wine tastings, expanding consumer awareness beyond traditional kitchen uses. Founder Enea La Mantia noted a growing recognition of EVOO's diverse flavor profiles—including green, grassy notes, pepperiness, and slight bitterness—as positive sensory indicators. Unorthodox pairings, such as drizzling EVOO over gelato or incorporating it into coffee, are also being explored to showcase these profiles.