Olive oil, a staple on Brazilian tables, has seen its price climb significantly in recent months. That increase, which reached as much as 80% in 2023, is having a major impact on the bar and restaurant industry, on top of hitting consumers' wallets directly.
As the world's second-largest importer and seventh-largest consumer of the product, according to data from the International Olive Council (IOC), Brazil has been feeling the pinch of rising prices — with little relief in sight for the short term.
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What's driving the price surge
Ricardo Castanho, an olive oil specialist and instructor at the Brazilian Sommelier Association of São Paulo (ABS-SP), points out that among the factors behind the current situation, environmental imbalance is one of the biggest culprits.
“Climate change hit the 2022-2023 harvest hard. The world's main producing regions, like Spain, Italy, and Portugal, were badly affected. That took a heavy toll on the total volume of olive oil produced worldwide, which normally topped 3.3 million tons but dropped to 2.7 million,” he explains.
In 2022, the global olive oil harvest was the worst on record, down 26% from the historical average. The specialist adds: “as in any market, that drop in supply pushed prices up, and we saw a wave of repricing.”
Impact on the food-service industry
The rising cost of the ingredient has real consequences for businesses in the sector. As costs climb, profitability can take a hit, often leading to price increases passed on to the end consumer through higher menu prices.
Finding alternatives brings its own set of challenges, since swapping in other vegetable oils can change the flavor and quality of dishes.
Attention to the quality and origin of olive oil also needs to be sharper, since the market becomes more vulnerable to adulterated products. Seeking out trustworthy suppliers and choosing certified products with quality seals from reputable, legitimate organizations can make all the difference.
to Adriana Lara, head of education and productivity at Abrasel, says this is the top concern right now when it comes to buying olive oil. “Looking for cheaper alternatives from other suppliers can be risky, because it leaves buyers exposed to food fraud — the term used for intentional food adulteration for financial gain,” she says.
Beyond stressing the importance of trustworthy suppliers, Adriana, who is also a food safety specialist, says the hit to bar and restaurant profits is very real. “Quality products come at a price. Good-quality olive oil deteriorates slowly, while a blend of oils — the most common form of fraud — tends to oxidize faster and change the product,” she explains.
The price increase seen at retail is significant and strains household budgets, which can lead to lower consumption. Origin also needs to be watched closely here, since shoppers should stick to trusted brands with quality seals to avoid buying a fraudulent product.
