Olive Oil Market – Insights
Olive oil is extracted from olives and is considered as one of the healthy oil types, owing to its health benefits such as lowering of blood pressure. Olive oil is offered as extra virgin olive oil, virgin olive oil, and lampante olive oil according to the method of production and composition of fatty acids in the oil. For instance, virgin olive oil is the oil derived from the fruit of olive tree (Olea europaea L.) by mechanical extraction method such as by washing, decantation, centrifugation, and filtration.
Increasing awareness regarding health benefits offered by olive oil is expected to drive the market growth over the forecast period. Olive oil contains monounsaturated fatty acids, which are considered as healthy fats. Monounsaturated fatty acids reduce bad cholesterol that is low-density polysaccharides (LDL) and triglycerides. Therefore, olive oil is considered as an effective solution for patients of coronary heart disease.
Moreover, key players in the market are focused on various strategies such as acquisitions and capacity expansion, in order to cater to increasing demand for olive oil. For instance, in May 2019, Solfrut, a Latin American agricultural company, announced its plans of renovating its existing olive oil production plant in Argentina. The renovation is expected to increase olive oil storage capacity to 4,000 tons. This project is expected to be completed by 2021.
Moreover, in February 2014, Cargill Inc. announced signing of an agreement with Dalmia Continental Pvt. Ltd (DCPL) to acquire its Leonardo Olive Oil business. Leonardo is a major olive oil brand and has significant presence in countries such as India. Therefore, the acquisition is expected to strengthen the market presence of Cargill Inc. in India.
Furthermore, Europe held significant market share in the global olive oil market in 2018 and is expected to maintain its dominance over the forecast period. This is attributed to increasing consumption of olive oil in the region in end-use industries. According to data released by Food and Agriculture Organization of the United Nations in January 2019, Europe accounted for largest market share in global virgin olive oil production accounting for 74.3% during 2004 to 2014. As per the same source, Spain ranked first in the list of top 5 global virgin olive oil producers during 2004 to 2014.
According to Coherent Market Insights’ analysis, the global olive oil market was pegged at 3,026.6 KT in 2018 and is expected to register a CAGR of 1.0% in terms of revenue, over the forecast period (2019–2027), to reach 3,299.9 KT by 2027.
Figure 1. Global Olive Oil Market Share (%), By Region, 2018
Source: Coherent Market Insights, 2018-19
According to Coherent Market Insights’ analysis, Asia Pacific is expected to gain significant traction in the global olive oil market over the forecast period. This is attributed to increasing awareness regarding health benefits of olive oil in the region. For instance, according to Olive Oil Import Data for (FY 2017-18) published by Indian Olive Association in 2018, import of total olive oil was pegged at 11,254.44 MT in FY 2015-2016 (Apr-Mar), which increased to 12,812.55 in FY 2016-2017 (Apr-Mar). As per the same source, import of virgin olive oil was pegged at 1,623.05 MT in FY 2015-2016 (Apr-Mar), which increased to 1,809.66 in FY 2016-2017 (Apr-Mar).
Figure 2. Global Olive Oil Market Share (%), By Product Type, 2018
Source: Coherent Market Insights, 2018-19
Furthermore, lesser side effects of natural products compared to chemical counterparts has increased demand for beauty products formulated with botanical extracts. This in turn is expected to boost use of olive oil in personal care products. Personal care products blended with olive oil extracts offer various skin benefits such as it is considered to be emollient and offers soothing effect. Moreover, presence of antioxidants in olive oil is considered to slow down aging of skin. Therefore, key players in the market are focused on developing new products blended with olive oil. For instance, Frantoio EVO del BORGO produces beauty & personal care products that are formulated with olive oil including body cream, facial cream, hands cream, liquid soap, burroacao and bubble bath, and lipstick.
Major players operating in the global olive oil market include Cargill, Inc., SOVENA, DEOLEO, COLAVITAS.p.a., Olivezia, Stone Axe Estate, PORTTABLE Produtos Alimentares, Lda., Castellodi Albola, Planeta, Empresa Esporão S.A., and Domaine De Marquiliani (Kermit Lynch Wine Merchant).
Olive oil has various health benefits such as presence of antioxidants and low level of saturated fats and therefore, is widely used for culinary applications. Moreover, olive oil is also used in personal care products, owing to its moisturizing effect. However, availability of alternatives is expected to restrain growth of the market. Other vegetable oils such as soy oil, palm oil, corn oil, and coconut oil are already available in the market, which is expected to pose a threat to growth of the global olive oil market. Moreover, olive oil production is limited to only certain geographic locations such as Europe and North America. Such factors are expected to pose a challenge to olive oil market growth.
Increasing demand for olive oil is attributed to rising awareness regarding health benefits of olive oil such as anti-cancer effects. This is expected to boost its consumption and in turn, drive the market growth. For instance, according to data released by International Olive Oil Council in November 2018, the U.S. olive oil consumption increased from 258 thousand tons in 2009-10 to 295 thousand tons in 2014-15. Moreover, according to data released by the U.S. Department of Agricultural, Economic Research Service, in March 2019, world olive oil production was 2.40 million metric tons in 2014-15, which increased to 3.26 million metric tons in 2017-18.
Moreover, olive oil industry waste is being considered as a potential raw material for production of bio-based fuels. Non-renewable energy sources such as crude oil are depleting at high rate. However, energy demand is increasing with rising population. Therefore, there is rising need for development of sustainable resources. For instance, according to a research paper, ‘Production of Biodiesel from an Olive Oil Industry Waste’ released at the RCN Conference on Pan American Biofuel and Bioenergy Sustainability in 2016, ‘Alperujo’ (blend of water, oil, cellulose, lignin, proteins, and carbohydrates) is a waste product obtained from the process of olive oil extraction. The byproduct can be successfully used as feedstock to obtain biodiesel.
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