Analyzing the Global Commodity Chain for Olive Oil Production and Distribution

Abstract

Globalization increased the complexity of the olive oil value chain: this work analyzes its features and evolution using the Global Commodity Chain framework to provide sector stakeholders with insights on core actors and phenomena. Results show that olive oil is produced in Mediterranean areas - though new producers are growing - and globally traded and consumed, spreading in non-traditional countries in USA, Europe and Asia. Spain – focused on quantity - and Greece – with high quality but low promotional strength - are the core bulk exporters. Italy is the main bulk importer, which it blends, bottles and sells in global markets exploiting the Italian reputation but competing on price: this represents the dominant and debated scenario, where MNCs lead reducing the competitiveness of weaker higher quality regional producers. With globalization, new actors appeared; regulations intensified to combat fraud. The power of demand increased; authority shifted to large bottlers and retailers; fragmented producers suffer from agricultural squeeze, except for efficient Spanish cooperatives. Actors upgraded improving products, processes and international reach; relationships became modular, where however quality and brand promotion entail stronger coordination, bulk production and focus on quantity result in more price-driven relations. Future prospects will continue in these directions: cooperation, balance between quality and efficiency and international markets are key to succeed.