Liquid gold: How olive oil became a global essential

Almost everyone has an olive oil story. It might be an Italian nonna who swore by a spoonful each morning “for the heart” or the half-empty bottle on your kitchen bench that goes into everything from roast potatoes to chocolate cake.

"What was once a staple of Mediterranean diets has become a truly global food. Yet after two poor Mediterranean harvests, the global olive oil supply has tightened and prices have risen sharply."

In Melbourne cafés, baristas now make olive oil lattes, in Tokyo, pastry chefs drizzle it over vanilla ice cream and in Los Angeles, fast-casual burger chains are switching to olive oil mayonnaise for clean label appeal.

What was once a staple of Mediterranean diets has become a truly global food. Yet after two poor Mediterranean harvests, the global olive oil supply has tightened and prices have risen sharply. To alleviate this, producers outside Europe are increasingly filling the supply gap - Australia’s counter-seasonal harvest lands just as northern stocks run low.

From tradition to turbulence

Olive oil has been around for thousands of years - at least six millennia by some accounts. It was never just food: ancient Greeks used it as perfume and skin balm, Romans as medicine, Egyptians as lamp fuel in temples. Until relatively recently it was largely a Mediterranean delicacy, both produced and consumed close to home, with Spain, Italy and Greece still providing around two-thirds of global output.

Recent events have contributed to a fundamental shift in the centre of olive oil production. Over the 2023 and 2024 harvests, searing drought and record heat across southern Europe slashed yields by up to forty per cent. Spain’s crop fell from about 1.4 million tonnes to under 700,000 tonnes - its weakest in a decade.

Prices more than doubled, peaking in 2024 at the equivalent of around A$15,000 a tonne on European export data, while shortages in Spain, Italy and Greece reportedly sparked supermarket thefts, rationing by exporters and substitution in restaurant kitchens with sunflower or grapeseed oils.

New-world groves in Australia, California, Chile and Argentina are filling more of the demand - scaling high-density orchards, investing in water efficiency and accelerating traceability and premium branding.

MOUNT ZERO VIDEO HERE

Australia’s time to shine

As recently as the 1990s, few imagined Australia would make world-class olive oil. In 2024–25, production sits near 19,000 tonnes, with industry ambition to double by 2035 as high-density groves mature. The olive belt stretches across Victoria’s Goulburn Valley and Sunraysia–Mallee, South Australia’s Adelaide Plains and Riverland, and Western Australia’s Swan Valley and Margaret River. Super-high-density planting, mechanical harvesting and precision irrigation now lift both yield and consistency. Australians use around 50,000 tonnes of olive oil each year, which works out to about two litres per person - roughly four standard 500 ml bottles.

Around two thirds of that volume is imported and one third produced locally. Per-capita use has more than doubled since the 1990s as olive oil has shifted from an occasional indulgence to an almost every day ingredient. Brands such as Cobram Estate and Alto have built scale and reputation at home while also growing sales into Asia and the US, alongside regional producers like

Mount Zero that have earned strong followings among chefs and consumers.

Australians - like consumers in many nontraditional olive oil markets - are becoming more selective and better informed about how oils are made. The most recognisable indicator is the extra virgin label, which in Australia is governed by an industry standard. In plain terms, extra virgin oil is made only by pressing the olives, with no heat or chemicals, and must pass strict taste and acidity tests. Virgin olive oil is made the same way but has a gentler flavour and slightly higher acidity, so it sits just below extra virgin in quality.

Like producers elsewhere, Australian growers are addressing climate risks proactively. They are shifting toward drought-tolerant varieties, using precision drip irrigation with soil-moisture sensing, and investing in on-farm renewables, such as solar irrigation pumps or biomass boilers that turn prunings or olive pomace (the pulp left after pressing the oil) into heat for hot water or space heating at mills.

Further afield, new production regions are reshaping the olive map. In California, modern closely-planted orchards now cover the Central Valley, with producers like California Olive Ranch and Corto Olive Co. using mechanised harvesting, solar-powered mills and regenerative farming, often milling oil within hours of harvest. In South America, Argentina and Chile have scaled quickly for export, while in North Africa, Morocco has emerged as a major global producer and Tunisia is bottling more under its own premium labels. In New Zealand, the Hawke’s Bay and Wairarapa regions are producing award-winning extra virgin olive oils - especially from the stony soils of Wairarapa, which deliver distinctly green, grassy oils with a strong peppery finish.

Globally, innovation is also transforming every link in the olive chain. On farms, drones and soil sensors monitor tree health, precision irrigation maximises water efficiency and new cultivars promise resilience against climate stress. In mills, continuous cold-press systems and nitrogen sealed storage keep freshness intact. Cobram Estate’s Ultra Premium Fresh Pressed range, for example, is harvested and cold-pressed within hours, often inside a six-hour window.

From kitchen to lifestyle

Olive oil has shifted from a simple cooking fat to a lifestyle choice. Global consumption has climbed by more than 20 per cent in the past decade. In Australia, it has more than doubled since the1990s, and in the US it has tripled since the 1980s. Across Asia, use is rising fast as middle-class households embrace the Mediterranean diet and see olive oil as a marker of health and quality.

Health is central to that appeal. Olive oil sits at the heart of the Mediterranean diet, linked to lower cholesterol, anti-inflammatory benefits and longer life. For older consumers it may be seen as improving heart health and moderation, while for younger ones it ties in with natural eating, wellness and authenticity.

Labels now highlight harvest dates, regions and certification, while packaging innovation helps preserve freshness and convey value. Dark bottles protect antioxidants, refill pouches cut freight emissions and elegant gift designs have made olive oil an affordable indulgence that now sits comfortably beside wine and chocolate - the kind of thing you’d bring to a dinner party and watch disappear faster than the shiraz.

That shift has spilled well beyond the kitchen. In the US and Japan, bakers and ice-cream makers use olive oil instead of butter. In Asia, cosmetics companies are turning olive by-products into moisturisers and serums, and food companies are creating functional oils enriched with omega-3s or plant sterols for ageing consumers.

Even with new competition from sunflower, canola, avocado and coconut oils, olive oil’s blend of flavour, science and heritage gives it remarkable staying power. Few ingredients move so easily from a Michelin-star kitchen to a home frypan or a skincare label. Its versatility is its edge - the same bottle can finish a Tuscan bruschetta, lift a Japanese sashimi plate and smooth a Californian smoothie.

The investment angle

For capital allocators, olives may be attractive now for practical reasons: the crop is perennial and long lived, orchards are land-backed, cashflows come from annual harvests and pricing has strengthened as Mediterranean supply tightened. Modern groves are also highly mechanised and relatively water efficient compared with many permanent plantings, which lowers unit costs and makes scale viable.

Australia’s early 2000s olive expansions tested that model. Some ventures stumbled on timing, yet the core economics held: high-density planting, mechanical harvesting and consistent extra virgin quality create reliable throughput for mills and brands.

Today, the capital mix is broader and more disciplined. Listed producers such as Cobram Estate show how vertical integration - orchard, mill and brand - lifts margins and supports exports to Asia and the US. Private capital from family offices and super funds is re-engaging for land appreciation, operational yield and ESG alignment. Corporate partners in food and wellness are taking strategic stakes to secure premium oil for fortified foods, cosmetics and nutraceuticals.

In comparison with other permanent crops, olives tend to offer relative stability: lower frost exposure than grapes, less dependence on pollination and peak irrigation than almonds, and productive lives that can exceed forty years. Yields take time to build, although mature blocks can deliver steady cashflow with flexibility around land and water use.

Globally, capital is being deployed to diversify climate risk. Spanish co-operatives are backing orchards in Morocco and Chile, Californian groups are trialling regenerative systems for carbon credits, and Australian producers are exploring sustainability-linked finance for new plantings and mill upgrades. For investors seeking real assets with defensible brands, health-linked demand and credible sustainability, olives may now fit the brief.

What comes next

Olive oil’s next chapter will be shaped by climate, credibility and creativity. Mediterranean harvests will rebound but remain unpredictable, keeping the door open for newer producers in Australia, Argentina and North Africa. Innovation is spreading from orchard to supermarket shelf - fortified oils, olive-based snacks, functional foods and skincare are giving the old staple a fresh twist. In Japan, chefs are drizzling it over gelato; in Melbourne, mixologists are using it in cocktails.

Asia’s expanding middle class is the biggest growth story. Consumers in China, Japan and South Korea increasingly prefer mild, fruity oils and are drawn to clean, certified, traceable supply – an area where Australian producers have a distinct edge. At home, Australians are likely to keep trading up, choosing freshness and provenance over price as olive oil settles into its dual role as both everyday essential and affordable indulgence.

Water scarcity and heat are pushing adoption of drought-tolerant varieties, precision irrigation and renewable-powered mills, while rising global prices and year-round demand make efficiency and branding even more valuable.

For a product that once sat quietly at the back of the pantry, olive oil now plays the lead. It has raced off Spanish shelves, been poured over desserts in Tokyo and mixed into cocktails from California to Carlton. For consumers it’s flavour and health in one bottle; for producers it’s adaptation and innovation; for investors it’s a living, sustainable story - the world’s oldest oil with a distinctly modern shine.

Gerry Karam is Head of Food, Beverage and Agribusiness – Institutional at ANZ