The dramatic price increase of Olive Oil

It is extraordinary what is happening in the olive oil market this year, particularly in the more niche, higher quality Extra Virgin Olive Oil segment. The prices have now broken every historical record, with no signs of slowing down.

The main driver relates to significantly less yield (output) expected in most of the world's major producing countries. Extreme heat, wildfires and drought have decimated much of the world’s olive harvest yet again, driving prices for olive oil to a record high of close to $10,000 per metric ton. And this price relates to the benchmark quality of EVOO, and not the high end product. On our own groves, as we are midway this year’s harvest, the yield is estimated at a minus 70% compared to previous year 2022. That is on top of the fact that 2022 had already been a challenging year for us. The extreme weather conditions in Greece, with early heat waves and upsetting forest fires, followed by unusual weather phenomenons during the otherwise hot dry Greek summer, (we even had hail), has taken its toll on the olive tree’s delicate flowers and fruit. 

On top of the low yield, we are also experiencing the harsh reality of significantly higher costs at every step of the product’s life cycle. From lack of workers and thus increased labour costs to picking the olives and pruning the trees, to higher manufacturing costs to purchase and produce our bottles, to significantly higher transport costs (at home, at destination but mainly in between) due to energy prices and shipping route disturbances, to higher warehousing costs (note: our products need to be stored in temperature controlled environment), and even to the 2% hike in GST..

At Papa’s Grove, we have until now refrained from raising our prices, despite the post-COVID inflation boom. In fact, we have not changed our pricing since we launched in 2015, absorbing along the way every cost increase we had suffered. 

Unfortunately, the pressing need has come for us to also undergo a  price review, so that we can continue offering our liquid gold. 

To some producers, it would be easy just to cut corners and keep price lower, but this is not what we stand for.  We hope customers will continue to appreciate the higher quality and guarantee that comes with Papa’s Grove.

These are challenging times….

(graph source indexmundi)