The price of groceries in the United States has risen 13.1% over the past 12 months, according to the latest data from the Bureau of Labor Statistics, the largest such increase since 1979.
This tangible increase in the prices of all types of food products, ranging from fruits and vegetables (9.3%) to dairy products (14.9%), has changed the buying habits of grocery stores in the United States.
The retail olive oil category is gaining a unit share over other cooking oils and fats because there hasn’t been as much price inflation.
A report from Attest, a research firm, interviewed “2,000 Nationally Representative Working Age Americans” and found that average weekly grocery spending was up 14.5% from six months ago.
To cope with rising prices, Attest found that six in 10 people are buying less premium or luxury foods. They also found a 24.9% drop in meatless or flexitarian diets, with one in two consumers switching to cheaper brands.
See also:Rising Olive Oil Prices Not Slowing Consumption in Europe
Although Attest has not collected any data on olive oil consumption trends, its findings echo patterns identified in the latest U.S. Department of Agriculture Global Oilseeds Market Report. .
USDA data indicates that olive oil consumption in the United States has fallen from 395,000 tons in the 2020/21 marketing year (which runs from August to July) to 381,000 tonnes at the end of 2021/22.
Not all grades of olive oil performed equally, however, with importers and U.S. producers reporting no declines in extra virgin olive oil sales.
“[It’s] tough times for sure,” said Joseph R. Porfaci, executive director of the North American Olive Oil Association (NAOOA), a trade group. Olive Oil Times. “But the olive oil situation is not so bad.
“The total U.S. retail pourable oil market (olive oil plus corn, canola, soybeans, etc.) is down 4.5% in volume, but the olive oil category itself- even is only down 1.7% in volume,” he added, citing 52-week data. until August 13.
Furthermore, there is no evidence that sales of extra virgin olive oil have declined at all. “In fact, in the extra virgin category for pack sizes between 10 and 19 ounces, the specialty sector (priced at over $0.75 an ounce) has grown steadily over the past five years” , said Profaci.
“For the current year to date, volume in the specialty sector is again up compared to the rest of this part of the extra virgin olive oil category,” he added.
While there hasn’t been any specific research into why other premium food sales have fallen as extra virgin olive oil has steadily increased its upward trend, Profaci believes that the health benefits and unique flavor profile of extra virgin olive oil have kept customers from sacrificing it for alternatives. .
“There really is no acceptable substitute for those who are passionate about cooking with olive oil,” he said.
Nick Potter, Costco’s assistant buyer for olive oil and other products, has seen a similar trend at the world’s fifth-largest retailer.
“For Costco, we were lucky. Olive oil sales are doing well,” he told Olive Oil Times. “Our sales have increased over the past year.
Despite some modest price increases, Potter said Costco members don’t seem to care. This may be due to similar price increases for other edible oils, such as canola or sunflower.
Along with retailers and importers, growers in the United States also experienced a similar trend of flat or increasing sales, despite inflation.
“We haven’t experienced a downward trend in our sales,” said Jeffrey Campbell, executive vice president of sales for California Olive Ranch, the largest U.S. olive oil producer. Olive Oil Times. “In fact, we are seeing an acceleration in our units and dollars over the last quarter. »
While Campbell confirmed that COR had raised prices over the past 12 months to “account for inflation,” he added, it hadn’t impacted sales.
Conversely, he agreed with Potter that inflation in the canola and sunflower oil sectors made olive oil a more attractive option for some consumers.
“The retail olive oil category is gaining a unit share over other cooking oils and fats because there hasn’t been as much price inflation,” he said.
Campbell also thinks growing consumer awareness of the health benefits of olive oil has made shoppers less likely to substitute it with other cooking oils.
California Olive Ranch was not alone in seeing this trend among American growers. Marisa Bloch, general manager of Pasolivo in central California, said the company raised prices slightly due to inflation, but saw no drop in sales.
“We are fortunate to have a very loyal customer base,” Bloch told Olive Oil Times. She added that educating consumers about the health benefits of extra virgin olive oil is key to increasing consumption in the United States.
“Many of our customers have seen the health benefits of our oils, such as lowering their cholesterol, so they keep buying because it’s a food they definitely don’t want to give up,” Bloch said.
While California is responsible for nearly all olive oil production in the United States, farmers and millers in other states have confirmed the same trend: consumers may reduce other food products by luxury, but extra virgin olive oil seems to be the exception.
Pioneering Oregon olive oil producer Paul Durant says his company had to raise prices slightly last year to offset pressure on input costs from inflation, but his customers continue to buy olive oil.
“We are fortunate that over 65% of our sales are direct to consumer,” he told Olive Oil Times. “We also self-distribute our oils, so we are very close to our distributor partners. We made a major effort to demonstrate to their customer base which definitely resulted in strong sales on their behalf and on our behalf.
Instead, Durant said the results of the 2022 olive harvest will have more impact on prices than inflation.
“The real key for us this year will be performance,” he concluded. “Last year was rough. If I can reduce my unit costs on the yield side, that will relieve me a lot of other pricing pressures. »