Growing Pains

Most U.S. olive oil producers belong to the California Olive Oil Council (COOC), an industry organization which promotes California olive oil. Members of the board have designed a new membership agreement which specifies a code of conduct. Their goal is to put California olive oil in a premium category where quality, better taste and truth in labeling justifies the higher price compared to imported and non certified oils.

COOC members must agree to a list of conditions to renew their membership this July.  While most producers embrace the spirit of the agreement, many have found problems with some of the wording.

One of the more controversial agreements is that members must certify all oils they sell as extra virgin through the COOC seal program. Previously, members could submit some oils for seal certification but still sell other products labeled California Extra Virgin without the seal. This allowed a premium line with premium packaging and the COOC seal as well as a cheaper line without the costs associated with certification.

Most California producers are passionate about olive oil and are eager to make a quality product and have it labeled thus but monetary concerns have upset some. One member has quit the COOC board to protest the new agreement. Some producers make as many as 50 separate lots of oil representing many varietals picked at many times of the year. Each lot would require certification.

Costs of certification includes chemical testing by an independent lab, submission of oil to the COOC tasting panel with the appropriate fee and then optional purchase of the COOC seal sticker. Chemical analysis costs range from $35 to $75 not including shipping and oil costs. The COOC submission fee is $150 for the first oil tested then $100 for each additional tested oil. Small producers which make less than 100 gallons per year can certify an oil for $50.

While costs of certification seems at first small, per unit cost can be substantial for a small grower. As Nancy Ash pointed out in her marketing seminar during Pieralisi Day in Sacramento, small incremental additional costs turn into large increases in retail price.

It is ironic that universal testing will be used to guarantee conformation to the IOOC standards while in many European countries producers need not send any oil for certification in order to label their oil extra virgin.  Instead oils are randomly tested, with penalties for mislabeling or fraud.  Some have suggested a similar system for the U.S.

Producer to producer or broker deals also get complicated.  If company A, a COOC member, runs out of their own oil before the end of the year they will often buy oil made from the same varietal from another producer or broker. Under the new agreement, to sell company B’s oil, company A must make sure it is also certified by the COOC. If Company B’s oil wasn’t already certified, then Company A must submit it for testing. According to Lisa Deane, who brokers oil through the Olive Oil Source, many small California producers are buying a single drum to finish out the year on one of their labels. Getting a single 55 gallon drum certified would be costly and encourages buyers to demand that the oil is already certified.

Even if Company A is buying oil which has been previously certified, it must ask for consent from the COOC for a sublicense agreement. The sublicense may or may not be granted by the COOC at its sole discretion. Many producers are reluctant to let others know where they are getting their oil.  According to COOC board member Ridgley Evers, possibly proprietary information on who is sublicensing from whom would not be available to COOC members or even the board, but would be kept under seal by the executive assistant. Ridgley says the wording of the sublicense agreement is not yet available for member perusal.

Marketing consultants encourage California producers to create a product line which may also contain imported oil, oil and vinegar dressings or “dippers”, flavored oil, etc. If a California producer uses or sells imported oil labeled as extra virgin, then to comply with the COOC member agreement, the foreign oils must also be certified. Ridgley says that certification must come from the distributor or broker who sold the oil. That can be in the form of a chemical analysis done in the US, an IOOC certification from the country of origin or any written document stating that the oil is extra virgin according to the upstream supplier. In the case of a small producer buying 20 gallons of oil at Costco to use in a small run of sauce or dressing, the certificate can be in the form of the retail label.

Many producers currently make flavored oils labeled as California Extra Virgin olive oil. Under the membership agreement this would not be allowed. Using the IOOC regulations as a model, no olive oil can be labeled extra virgin if it contains anything other than olives.

If you made and certified an oil, then infused it with a dry herb, Ridgley says that “made with California Extra Virgin olive oil” would be acceptable on the label to differentiate it from cheap infusions made with refined oil.

Infusions typically don't have the same  intensity as oil made with fresh fruit or herbs pressed with the olives.  Most of the flavored oil winners at the L.A. County Fair have been made in this manner. However labeling oil produced by mixing olives and fruit in the press gets tricky. Because the oil never exists by itself, it cannot be certified extra virgin by the COOC panel. Nick Sciabica of Nick Sciabica and Sons says that their fruit oils, one of which won best of show at this year’s L.A. county fair, test out at .3 % acidity so it makes the grade as far as both organoleptic and chemical analysis. It could not be labeled as olive oil though and cannot even advertise that it was made with extra virgin olive oil.  COOC Board member Sue Ellery of Stella Cadente, who won an award for her lemon oil, says she is in a quandary as far as how to label it.

The membership agreement states that the oil certification is only good for 2 years. At the end of 2 years, the producer must notify the distribution channel that the oil no longer complies with the COOC standards. While it is true that most oils should be consumed in less than two years, some oils have longer legs and there is a provision to resubmit the oil so that it is certified for another two years. It is up to the producer to notify resellers that their oil may no longer be extra virgin at any point in its life. It may be difficult for a producer to know or control how distributors or retailers store or display their oil. We have all seen oil ageing quickly under the heat lamps on a supermarket deli counter.

All members shall pay to the COOC a licensing fee for every “vessel” that contains the COOC seal. It is unfortunate that no minimum size was stated. Single serving packs and bottles of California oil for the airline and other food service industry, wedding and corporate gift bottles and other small containers could not be economically labeled. This type of product is widely distributed throughout the US and could give California olive oil and the COOC a more visible profile if an equitable fee schedule could be created.

Members must agree to the fee schedule when they renew their membership this July. According to the COOC the fee schedule will not be published until November 2003. 

As said earlier, the purpose of the agreement is to get all California producers selling a premium and properly labeled oil. Then an advertising campaign can let American consumers know that unless they see the COOC seal on olive oil, they cannot be certain that it is truly extra virgin. 

Another reason for the agreement relates to self-regulation.  The COOC is actively trying to enforce appellation and labeling in the U.S.  Board members have suggested that the FDA, USDA and state agencies will be more willing to enforce improperly labeled foreign oils when the COOC holds its own producers more accountable.

Hopefully board members can incorporate the concerns of producers in this currently unfinished agreement.

Pieralisi Day Seminar on Olive Pressing

On June 8th the Olive Oil Source sponsored a  complimentary seminar for olive growers stressing what happens after the olives come off the trees.  The seminar in Sacramento was flush with an audience of mostly current growers, some of whom have experimented with the home press while waiting for their trees to reach production age.

Pieralisi factory representative Claudio Vignoli gave an extensive presentation on the differences between two and three phase decanter centrifuges.  He also presented the newest equipment designed to optimize flavor and preserve antioxidants.  Pieralisi has a new two stage hammer mill which preserves the advantages of this type of mill while decreasing bitterness and increasing yield.  The Genius line of automated mills with central controls and covered malaxation tanks was also introduced.

Nick Sciabica of Nick Sciabica and Sons Olive Oil gave a computer slide presentation on maximizing flavor and efficiency from a decanter olive oil press.

After lunch in the rotunda, Jeffry Guffey from Production Finance, LLC explained farm equipment leasing options.  Nancy Ash gave a stimulating talk on olive oil marketing.  She covered pricing through the distribution network, label and bottle considerations, and examined working with brokers and supermarket chains.  Extremely positive feedback on the event makes a repeat next year very likely.

Nancy Ash explains packaging

Olive Oil and Your Health

Following is a summary of some recent research into the effects of olive oil.  Some of these intriguing preliminary studies may not pan out in human studies.

Breast Cancer - M Solanas from the Department of Cell Biology in Barcelona reported in the International Journal of Oncology that olive oil slowed breast cancer in rats.  A corn oil diet stimulated more cancers than a control diet while olive oil led to fewer and smaller tumors than the control diet. Solanas M - Int J Oncol - 01-Oct-2002; 21(4): 745-53

Dietary Fat and Cancer - L Kushi from Kaiser Permanente in Oakland found that based on current studies there is no evidence to support recommendations to lower total fat to lower cancer risk.  While decreasing red meat has been shown to decrease the risk of colorectal, prostate and breast cancer, there is little evidence that lowering plant fats would do the same.  In fact, there is evidence that increasing intake of monosaturated fats such as olive oil would decrease breast cancer risk. Kushi L - Am J Med - 30-Dec-2002; 113

Bioactive compounds - Kris-Etherton and others at the  graduate program in Nutrition, Pennsylvania State University reviewed these constituent which typically occur in small quantities in foods.  Phenolic compounds which include the Flavenoids, are potent antioxidants which can deter cancer and cardiovascular disease.  Phytoestrogens in soy foods, hydroxytyrosol in olives, Resveratron in nuts and lycopene in tomatoes have all shown cancer fighting properties.  While more research is needed, enough is known to recommend a diet rich in these bioactive compounds.  Kris-Etherton PM - Am J Med - 30-Dec-2002; 113 Suppl 9B: 71S-88S

First International Seminar on Olive Oil and Table Olive Marketing Strategies 

The IOOC organized its first marketing strategy seminar in response to the realization that as olive oil becomes more of a global  commodity marketing strategies which are consumer oriented vs. product oriented become more important.  The seminar has important implications for California producers.

Conclusions and recommendations were summarized in an article in Olivae, the official publication of the IOOC. Call was made for better cooperation on a North South and South South level to modernize the industry.  The Olive oil sector is more than a source of income and employment.  It involves land management,  conservation, preservation of family farms and protection of  cultural values. Quality needs more attention through upgrading growing, processing and storage technologies. While cost leadership has in the past been an appealing marketing strategy, differentiation of olive oil as a quality product makes more sense in today's global oil market. Promotion needs to be intensified.  Per capita consumption of olive oil is still low, especially in high-income  countries.  Younger consumers consume less oil so they are important targets of education and marketing activities.

So what does this mean for the California Olive Oil business?  Producers here have tried to distinguish  themselves as a premium segment of a  premium oil.  Higher olive oil quality will help increase olive oil acceptance and consumption but will make it more difficult for US producers to  differentiate on quality.  Labels, containers, regional flavor and appellation may become more important as the tide of quality worldwide rises.

Spreadable Olive Oil?

Researchers at the Indian Institute of Science in Bangalore have found a new way to solidify oil at room temperature.  The usual way to make plant oils into a spreadable margarine bar is to saturate the oil with hydrogen atoms in a process called hydrogenation.  This type of saturated fat has been found to have deleterious health effects.

Biochemist Ram Rajasekharan found that the Indian berry (Garcinia indica) accumulates a fat so hard it has been called "concrete oil."  Mixing a small part of the berry fat with a liquid plant oil such as sunflower oil causes the mixture to gel at room temperature.

Northwest Food Manufacturing & Packaging Exposition January 18-21, 2004 Oregon Convention Center - Portland, Oregon