By CHRISTOPHER DELISO
THESSALONIKI, Greece, Aug. 15, 2002 (UPI) — Along with the sea and sun, the olive tree is one of Greece’s best-known symbols. Paradoxically, however, olive oil sometimes seems to be one of the country’s best-kept secrets.
Despite high levels of production and domestic consumption, Greece trails a distant third behind heavyweights Italy and Spain on the export market. The Greeks claim to produce the world’s best olive oil, and arguably they are right.
Yet Greek olive oil has relatively low visibility abroad — especially in the crucial North American market. As a result, roughly 75 percent of total Greek oil exported goes to Italy, unbottled. There, the bulk Greek oil is combined with the local variety and resold as “Italian.”
There is hope for the Greeks, however.
A new desire to promote Greek oil as a high-quality product, combined with a world market undergoing gradual transformation, could phase out the competitive disadvantage in coming years.
But that depends on whether Greece’s new gamble — a focus on extra virgin olive oil (less than 1 percent acidity) and organic oils — works.
Strategic schizophrenia besets the industry. Sales tactics used at home differ considerably from abroad. In Greece, olive oil is a staple. A nation of only 10 million uses, on average, 170,000 tons a year, making annual consumption (35 pounds per capita) the world’s highest. Thousands of Greek families produce their own olive oil. With consumption of this staple (and backyard crop) already so high, there is little room for expansion.
Also limiting sales is the characteristic Greek resistance to change. Flashy new packaging and extra-healthy products like organic olive oil are viewed with suspicion.
Innovation is not rewarded, and it is no wonder that Greek oil producers have an average annual surplus of 135,000 tons.
But selling the surplus abroad has proven problematic. A nation that once sought to Hellenicize the world has given up on making olive oil a staple abroad.
Olive oil producers seem to have followed in the footsteps of restaurateurs abroad, who promote Greek cuisine — which is decidedly non-gourmet — as rather rarefied.
Greek restaurants in the West, from London’s Bayswater enclave to the financial district of San Francisco, charge prices that are incompatible with the cuisine’s image.
The same is true of Greek olive oil exporters, who believe that a small, streamlined bottle should cost more than products being offered by the established competition. This tactic, which aims to appeal to health-conscious, upper-class Westerners, also means that olive oil will not become a staple product in North America any time soon.
Mainly, the Greeks would like to get out of the humble business of bulk. Greece produces about 300,000 to 400,000 tons of olive oil annually, about half of which is exported. But less than 10 percent is bottled, according to the Athens Chamber of Commerce.
Most bulk oil exports go elsewhere in Europe, mainly to Italy, which takes 75 percent.
Even worse is a reliance on unprocessed — and unprofitable — husk oil for exports. About 20,000 to 40,000 tons of husk oil have been exported annually over the past decade.
Unsurprisingly, most husk oil goes to Italy and Spain, where it is processed, mixed with seed oil and exported for a good price. Ironically, this procedure is prohibited by law in Greece itself.
Greece’s export drive has also been inhibited by the country’s unique limitations in terms of geography and harvesting methods.
Olive trees are often grown in rugged, near-inaccessible areas, which makes harvesting labor-intensive. Olives are frequently hand-picked and pressed on the same day, for reasons of quality. These factors keep Greece from being a mass market producer.
The flip side of this situation is that bottled Greek olive oil offers a high quality level, with more than 80 percent of classed as extra virgin. Only 50 percent of Italian oil, and 40 percent of Spanish, can gain that classification.
Greek exporters, who realize that they cannot compete on a mass-market basis, have decided to carve out a niche among Westerners willing to spend top dollar on olive oil. The Greeks have begun to stress “estate” oils, which are produced on a small scale by traditional methods, such as hand-picked, stone-ground oil. The result is that many small companies are vying for a market with undetermined potential.
Take Blauel, located in the wild Mani area of the Peloponnese. Run by an Austrian, all of Blauel’s oil is either organic or organic-in-transition, according to an article on Greece.gr (“Extra Virgin Territory”).
The company has been able to export this “image” to high-end stores around the world, including Whole Foods in the United States, Britain’s Wet and Wild and Germany’s Rapunzel.
Another premium producer and winner of several international design awards is Gaea, which believes that “packaging and design, although costly,” is its most valuable investment.
There are signs that this approach is starting to catch on.
“Last year, Greece had the highest rate of increase in organic farming in Europe,” says George Dimitriadis of Biolea, located on the island of Crete.
According to Dimitriadis, it is in Greece’s best interests to develop this potential. Since mass production is not a realistic option, Greek estate exporters are increasingly important to the industry.
Dimitriadis said: “I do not believe in a status competition with the Italians for dominance of the U.S. market or any other market. It is inevitable they will lose their grip, but I do not think that we will see another olive oil producing country establishing the same position on the U.S. market ever again.
“There are new olive oil producing countries coming onto the world market continuously. Countries with very cheap labor costs like China and India, and countries with very high industrial technology like the U.S., Australia and New Zealand will all offer different olive oils.
“We are more likely to see the olive oil market fragment into a huge range of regional, specialty and other kinds of olive oil.”
Should this compelling prediction come to pass, the Greeks will not emerge the big winner — no one will — but neither will they lose ground. Instead, they will carve out a comfortable niche.
The 2004 Athens Olympics is also expected to give a big boost to Greece and the Greek economy in general. With any luck, olive oil exporters will be among the prime beneficiaries.
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