Listen to this article
This is a question that should be asked by anyone who wants to be part of the olive oil industry.
Setting up an olive oil company or having your own olive oil business is an interesting decision.
A report from the Ministry of Agriculture of Spain says the following:
“The forecasts indicate stability in the production and the olive oil market in the current 2021/22 season and in line with the average of the last four.
During the past campaign, record levels of commercialization were registered worldwide in olive oil.
The average prices of all categories are 52.4% above those of the previous year, in Spain.
Estimates place the olive oil campaign in Spain at around 1.3 million tons and 570,000 tons for table olives, a figure that indicates stability in the olive oil production and market in the 2021/2022 campaign. in line with the average of the last four seasons and slightly below last season.”
This means that, despite all the particularly difficult situation due to Covid-19, olive oil and its commercialization have remained within the agri-food sector without suffering serious losses.
Ex-EU exports, with the United States being the world's leading importer of olive oil, accounted for 35% of European exports, that is, 3.8% more than in the same period of the previous season according to the IOC. Likewise, the International Olive Council also declares that intra-community trade has also remained stable, and in general with a slight increase in exchanges.
This means that, despite being a difficult market and sometimes not very profitable for the farmer, it is a sector that is on the rise and has great growth potential.
Now, the fact that it is one of the healthiest fats in the world is not a condition that necessarily by itself leads olive oil to be the most consumed fat.
On the contrary, it is one of the least consumed fats in the world, as indicated by its approximate 2% consumption compared to the rest of fats in the world. This 2% of consumption means that we have a market share to reach of 98%. In this scenario, it seems that entering the olive oil industry through a business or a company that belongs to the sector can be a good investment.
To know if you are ready to set up a company in the olive oil sector you have to ask yourself a series of questions and you will undoubtedly have to acquire training in the different subjects or areas that are part of the entire value chain, already that they are all closely related, and the relationship between them is a transversal relationship.
We are going to see in what subjects you must have some basic notions to set up a company in the olive oil sector.
Do I have knowledge about olive oil tasting and sensory analysis?
This is the first question you have to address. Knowing what quality you are going to work with or with what quality you want to associate with is necessary to address your business model. Even if you have a consulting company or are not a producer, you will still have to know the different classifications and qualities of virgin olive oil, since your ultimate goal will be to sell olive oil, either you or your clients.
Do I have knowledge about olive groves?
It is not about being an expert in olive grove management, but it is about having basic notions about the olive grove and its cultivation. The different varieties of olive tree, as well as the characteristics of each olive variety, and how the variety affects stability or sensory analysis, will be important to be able to make certain decisions, especially if you are going to relate to the purchase or the sale of olive oil. Knowing how to identify if an olive grove is in good condition or how pruning can affect production is training that will help you make your business or company profitable in the olive oil sector.
What do I know about making olive oil?
Having knowledge about production will help you to know which cooperative or oil mill to take your olives, know which cooperative or oil mill to buy oil from, improve the quality of the oil you work with, you will be able to advise on quality and main defects. As in other areas of knowledge, in order to be an olive oil expert, it is not about being a specialist in each one of them, but about having basic notions that help you understand certain processes.
Am I Ready for Marketing and Marketing?
You cannot have knowledge and be prepared in tasting, olive groves and elaboration and then not know how you are going to sell or what marketing is the most appropriate for the company you are going to set up.
Knowing the olive oil markets is crucial before setting up your company, knowing which will be the target you have to address or how you have to position yourself in front of your potential clients is undoubtedly what will differentiate you from your competition.
Marketing in olive oil today is a tool that will help you differentiate yourself and professionalize yourself.
All your business model that you have designed, must necessarily be accompanied by a whole marketing strategy that helps you not to go off the previously designed path. You have to differentiate yourself, adapt to market situations and decisions and change your path every time a complication arises or so your advisors tell you.
Having training in these areas will make you an expert consultant in olive oil and in this way you will be able to set up a company within the sector with initial viability guarantees. On the other hand, this knowledge will save you a series of financial, personal and temporary investments that you will appreciate without any doubt.
Do I have my own business model?
Having a business model will allow you to set objectives and goals, as well as the ideal route to achieve them. It is important that the business model you have is your own, this means that, based on all the previous training that we have discussed, you create a path to follow to achieve your final goal. You have to be part of the work path that you and your team have to carry out. You can commission an external company to carry out the business model for you, but you have to be in each and every one of the points where they are going to work, since the training is yours, and your conclusions and decisions will already be based on some specific knowledge of the olive oil sector.
To have a good foundation in the company you are going to set up, it is important that you are prepared and become an expert olive oil consultant, but of your own company. This will be what leads your business to have certain guarantees of profitable viability.
Do I have a team?
Like investing in training, investing in human resources, that is, in equipment, is a priority. Although at the beginning we are talking about a single person, it must be clear that to grow you need a good team and that this team is good.
The staff you work with must also be trained and you have to be in the same line, share the business model and make decisions by consensus. Knowing all the areas we have talked about, as well as mastering English are priorities that you must take into account when forming your team.
Do you know what you have to invest in?
If you are going to set up a company in the olive oil sector, it is to make it profitable and to give you some benefits.
Once you have analyzed and seen the possible benefits, you have to focus on investing. Investment is not just an economic expense, it is the combination of company resources (economic, labor or material) that you assign to increase profits or the capital that you already have, as well as to grow or develop production in a way more modern and according to the situation in question.
The main objective of the investment in olive oil is to increase the capital of the olive oil mill, cooperative, or your particular and specific company that you want to set up.
Here they would enter among other functions:
- Own and team training.
- Cost reduction if I increase the total volume of production.
- Diversification due to the development of other areas of activity that have arisen due to particular situations (understand here for example the social situation COVID-19)
- The purchase or organization of new companies.
The investment will be one of your best allies for growth.
All these questions would be the first premises that you have to take into account to be able to assess whether you are prepared to set up a company in the olive oil sector, whether you are a producer or if you only want to market oil or if you want to help other companies through be an expert olive consultant.
As we said at the beginning, the olive oil sector is on the rise and has a long history. Now, becoming experts in the olive oil industry and becoming our own consultants will be the first step that we recommend to avoid delays in time and cost savings.