World - Olive Oil (Virgin) - Market Analysis, Forecast, Size, Trends and Insights
Global Olive Oil Market: Rising Demand in Asia to Buoy Weak Market Growth
IndexBox has just published a new report "World - Olive Oil (Virgin) - Market Analysis, Forecast, Size, Trends and Insights". Here is a summary of the report’s key findings.
Virgin Olive Oil Consumption Is Falling For The Third Consecutive Year
Virgin olive oil is a popular ingredient in Mediterranean cuisine, especially in Spain, Italy, and Greece. It is a staple of the Mediterranean diet and is widely used in the restaurant and catering industry and at home. Over the past ten years, however, the market has been mostly expanding in countries where the tradition of olive oil consumption has remained relatively weaker – such as Japan, China, and the USA.
It is heavily advertised as a healthy substitute for other vegetable oils due to its various biochemical characteristics, but its consumption is very much determined by income and fluctuations in price.
According to IndexBox estimates, in 2017, approx. X tonnes of virgin olive oil was consumed worldwide, a decline of -X% against the previous year. Overall, virgin olive oil consumption continues to indicate a slight negative trend. The price of olive oil has been rising for the past four years, and this has caused the main European consumers – Spain and Italy – to cut back in terms of consumption. These two Mediterranean countries comprise X% of the global consumption volume and have been experiencing weak or virtually negligible economic growth and consistently high unemployment since the 2008 global crisis. Since 2014, the price of virgin olive oil has also been suffering severe supply-side pressure from numerous droughts in Spain and a bacterial disease in Italy.
Therefore, considering the high price and income elasticity of virgin olive oil demand, global consumption is weakening; the rapid rise in consumption in the emerging economy countries and the USA is yet not sufficient to boost global figures.
The most prominent rate of growth was recorded in 2010, when it surged by X% against the previous year, as the global economy was recovering from the 2007-X financial crisis. Global virgin olive oil consumption peaked at X tonnes in 2011; however, from 2012 to 2017, it stood at a somewhat lower level.
Global virgin olive oil market revenue amounted to $X in 2017, increasing by X% against the previous year. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers' margins, which will be included in the final consumer price). In general, virgin olive oil consumption continues to indicate a relatively flat trend pattern, where price increases were usually annihilated by the falling demand.
Spain accounts for more than half of global virgin olive oil consumption
The country with by far the largest volume of virgin olive oil consumption was Spain (X tonnes), accounting for X% of total consumption. Moreover, virgin olive oil consumption in Spain exceeded the figures recorded by the world's second largest consumer, Italy (X tonnes), threefold. The U.S. (X tonnes) ranked third in terms of total consumption with a X% share. Spain and Italy have a longstanding tradition of virgin olive oil consumption, while in the USA olive oil has been popular due to successful campaigns advertising its health benefits.
In Spain, virgin olive oil consumption decreased by an average annual rate of -X% over the period from 2007-2017. This overall decrease in consumption has its origins in the general downwards trend in terms of consumption that has been a factor since 2012. In 2012 and 2014, Spain was hit by severe droughts; this was followed by a decrease in production and associated increases in price. At that time, unemployment in Spain was around X%, which had dramatic implications for the Spanish economy overall and the consumption of virgin olive oil in particular. As a result, Spanish consumption has fallen by X% since 2007 and by almost X% since 2015.
Against the rapid deterioration of economic indicators in Italy due to the aftermath of the 2008 crisis, the demand for virgin olive oil has continued to fall and is also expected to contract further in the future. Then in 2014, the Xyllela Fastidiosa infestation hit crop production in Italy and yield figures decreased substantially. Overall, Italy recorded a -X% per year average annual rate of consumption between 2007-2017, recording the worst dynamic trend amongst the top consuming countries.
The USA, and several Northern African and Asian countries, unlike Spain and Italy, have seen their consumption surge, due to rising incomes and increasing attention to healthy eating habits and diet.
Virgin olive oil consumption is set to turn to moderate growth, due to the expanding Asian markets and income growth in Europe
Despite being depressed by the shrinking demand for virgin olive oil worldwide, the market is expected to launch its slow recovery in the near future and then expand gradually in the medium term.
Italy and Spain still assume a large share of consumption and are currently experiencing a contraction in demand. However, since 2015, the fall in consumption has been decelerating, as the market is recovering, and economic performance figures have shown slow, but stable growth, with declining unemployment rates. On the other hand, the market is still volatile and might remain vulnerable to yet another strong hit if adverse weather conditions strike crop production again in the following X years.
At the same time, other countries are expected to show strong consumption growth in the intermediate term. Japan has just agreed on free trade conditions with the EU in the summer of 2018 and is now expected to attract virgin olive oil produced in Europe. The Japanese market is as yet unsaturated, and European healthy habits are becoming popular there; thus the market has promising prospects for expansion in the medium-to-long term. Chinese demand for virgin olive oil is growing too, as the relatively high-income part of the population is moving towards healthy food consumption and a Western lifestyle.
The healthy eating trend is expected to boom in the USA in the nearest future and is assumed to affect virgin olive oil consumption significantly.
Overall, high and rising virgin olive oil prices, economic volatility and the expectation of natural disasters affecting crop production in the two major consuming countries – Spain and Italy – are expected to be the main factors curtailing the global consumption growth indices for this product. Along with the USA, China and Japan are expected to substantially affect the market in the medium-long term; medium term consumption projection figures indicate a relatively weak average annual growth of +X% up to 2025.
Do you want to know more about the global olive oil market? Get the latest trends and insight from our report. It includes a wide range of statistics on
- olive oil market share
- olive oil prices
- olive oil industry
- olive oil sales
- olive oil import
- olive oil export
- olive oil market forecast
- olive oil price forecast
- key olive oil producers
Source: IndexBox AI Platform
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