Why Is Olive Oil So Expensive? (10 Reasons)
Olive oil is a useful ingredient for cooking.
It’s also used in tons of different products.
When shopping for olive oil, you may discover that it’s become rather expensive.
Considering how frequently olive oil gets used, you may wonder what’s changed that’s made it so expensive.
Why Is Olive Oil So Expensive? (10 Reasons)
Olive oil can be as cheap as $6 for a small container.
However, extra virgin oil can often cost as much as $25 or more.
Manufacturing costs, the fact that olives are handpicked, and the sheer number of olives used to make olive oil are some of the reasons why olive oil can get expensive.
Let’s look at these reasons in more detail.
1. Extra Virgin Oil Is Expensive To Make
The process of making extra virgin oil is expensive and time-consuming.
It all starts with crushing the olives.
Olive oil manufacturers can’t use chemical means or heat to make extra virgin olive oil.
It makes the resulting oil not as pure.
The sample can’t have more than 0.8% oleic acid to qualify as extra virgin oil.
Some manufacturers will use human workers to crush each olive.
Those manufacturers tend to have the most expensive extra virgin olive oil.
Since their oil is essentially made by hand, they have to pay all those workers.
Others might use machines to press their olive oils into a pulp, but some manufacturers might see that as an impure process.
The next step to make extra virgin olive oil is to knead the pulp once it becomes a paste.
Manufacturers can’t make extra virgin olive oil until the pulp becomes thick enough to create a paste.
Once it becomes a paste, the workers knead the paste to squish out the liquid.
The liquid, contains water, olive oil, and residue.
To ensure they’re able to extract just the oil, the liquid goes into a centrifuge.
A centrifuge is used to separate different liquids.
Manufacturers use a centrifuge to separate the olive oil from the water.
The process isn’t complete once this has been done, either.
They then take that oil and further filter it to remove any remaining residue.
Then it’s finally bottled and sent off to the market.
Clearly, there are a ton of steps involved in making extra virgin olive oil.
As such, it is expensive to make.
To cover those costs, manufacturers sell their extra virgin olive oil bottles at high prices.
2. Cold-Pressing Manufacturing Processes
Part of the extra virgin olive oil production process, and some other olive oil processes, too, is cold-pressing.
A manufacturer can’t call their olive oil “extra virgin” if they don’t employ a cold-pressing manufacturing process.
Cold-pressing is when the temperature inside a facility is kept below a certain temperature.
If the temperature rises too high, then it can impact the quality of the olives.
If the olives become impure, then the olive oil is going to become impure.
Because of this, manufacturers keep a very close eye on the temperature of the facility during the pressing process.
Although manufacturers used to use stone wheels to press olives into a pulp, they’ve since switched to stainless steel presses.
While this results in more efficient pulp production, it’s also important for maintaining the right temperature.
Whether the company uses machines or human workers, the act of pressing generates heat.
This is because the process uses energy to flatten an object and expel its liquids.
Energy gets released as heat.
If the facility doesn’t have an efficient cooling system, then the area may become too hot.
As a result, the facility has to invest in high-quality cooling systems.
Another step of the process is the slow introduction of water.
If the water is too warm, then it can ruin the olive oil paste.
That means the company also has to ensure its water system is cold enough.
These extra factors add more cost to the production of olive oil.
To cover the costs and earn a profit, the manufacturer has to charge more for its olive oil.
3. Import Prices
Olive oil comes from olives.
Olives come from olive trees which are primarily grown in Greece.
As such, a lot of the olive oil that you buy comes from Greece.
Since there aren’t many, if any, olive oil producers in the United States, you’re usually buying an imported product.
Imported products are more expensive than domestic products because there are more steps involved in their supply chain.
You’re also faced with import fees.
Most countries have to pay some sort of fee to the government that they intend to ship into.
This is the government’s way of earning a bit of money to allow foreign countries to sell in their country.
Depending on the country in question, they might face an expensive import fee or a reasonable one.
Since olive oil comes in bottles, a lot of protection needs to go into its shipping, too.
The bottles have a long way to travel from Greece to the United States.
Manufacturers don’t want their products to get destroyed on their journey to the states.
As such, they’ll ensure they use high-quality packaging to keep the bottles safe.
That adds further cost to the production and sale of olive oil.
Companies also have to deal with customs.
Even if they regularly ship products into the United States, everything needs to get checked.
That takes time, which means the company isn’t making money while their products are in a queue for customs investigation.
To cover that portion of time in which they’re not making money, they put an expensive price tag on olive oil.
Olive oil is expensive because it’s usually an imported product.
4. Hand-Picked in Olive Orchards
A lot of olive oil manufacturers don’t use machines to pick their olives.
They prefer to use authentic means of producing olive oil.
That means they hire actual workers to handpick each olive from the olive trees.
This makes producing olive oil a lot more expensive.
Human workers cost a lot more than machines.
Manufacturers only need to buy the machines, then rarely have to worry about paying for them again unless something breaks down.
Human workers require payment to work.
Many manufacturers don’t hire just any workers either.
They prefer experienced farmers who understand how to properly take olives from the trees.
The most important part of picking olives is ensuring that they’re not bruised.
That’s a major reason why some olive oil companies prefer human workers.
They’re concerned that a machine will be too harsh while harvesting.
It will end up bruising the olives which completely ruins them.
Human workers can adapt in the moment.
They have greater control over their fingers to ensure they don’t crush or bruise an olive while picking it.
Unfortunately, human workers are slower than machines.
While they may produce fewer bruised olives, they take more time to do so.
That means they get paid more since they spend more days clearing an orchard.
That results in higher costs for the manufacturer.
Since they have to cover more costs, they need to sell their olive oil at higher prices.
It ensures that those costs get covered and that the manufacturers still make a profit.
If you see cheap olive oil, then there’s a good chance that the company uses machines to harvest its olives.
Otherwise, olive oil is expensive because some companies use human workers to handpick their olives.
5. Large Quantities Of Olives Needed To Make Oil
Another reason olive oil is expensive is that it requires a large number of olives to actually make olive oil.
To make a single liter of olive oil, a company needs to harvest anywhere from 5,200 olives to 8,000 olives.
There is an exact number of olives required because the liquid content inside each olive can be different.
Some might have a lot of liquid in them while others may not.
The sheer number of olives required to make oil is high.
That makes olive oil expensive because it means more work, more time, and larger orchards.
To be profitable, an olive oil company has to produce enough bottles to make it worth the venture.
Selling a single bottle of olive oil, in most cases, isn’t going to be enough to have a successful business.
As such, they’re going to need several hundred thousand olives to make a lot of bottles of olive oil.
That first means they need a lot of space for their olive orchards.
Since most olive trees grow in Greece and the Mediterranean area, there’s a limited amount of land where they can grow.
The land is always expensive, especially for farming.
Farmers have to pay the initial price to acquire the land so they can start planting olives.
Then the farmers have to wait several years before an olive tree starts to produce olives.
It can sometimes even take a decade for a tree to start producing olives.
At that point, the farmer needs people to start harvesting the trees for them.
If they have a huge orchard, then they’re going to need a lot of workers.
The process of picking olives can take a long time.
After that comes the lengthy manufacturing process of processing oil from the olives.
At long last, the company is able to get the oil it needs and start selling its products.
Olive oil is expensive because of the sheer number of olives it takes to create the oil and the costs associated with that large scale.
6. Health Factor
Olive oil is also expensive because it’s healthy.
Olive oil is healthy for an abundance of reasons.
One of the main reasons people consider it healthy is that it contains many antioxidants.
Antioxidants help protect the body against the development of cancer.
They do this by removing free radicals from the body.
Free radicals can damage the body’s cells and kickstart the process of cancer.
By removing those radicals in the body, the chance of developing cancer is reduced.
Some studies have also indicated that olive oil can help reduce the chances of having a stroke.
Since olive oil also helps remove some of the bad cholesterol in your body, it’s also believed to help reduce heart disease.
Clearly, olive oil is great for the body.
Because it’s healthier, a lot of people have an interest in cooking with it.
Cooking oil, in general, can sometimes be unhealthy because of the number of fats that it has in it.
Some of those fats aren’t healthy.
Olive oil has many healthy fats.
Since people typically want to eat food that’s healthier for them, they’re more inclined to buy olive oil.
Because there’s a greater demand for olive oil, the price of it increases.
Anything that ever gets the healthy label affixed to it tends to have a higher price tag.
For one, it’s because people believe that healthier products tend to cost more.
That reinforces the expensive price.
Secondly, if people believe that the product is going to help them live longer, then there’s going to be more interest in it.
Olive oil is expensive because it’s considered healthy.
7. Pest Protection
Another big factor that determines how expensive olive oil is is how much the manufacturer spends on pest protection.
Olive trees are notoriously resistant to most things.
They’re able to withstand freezing and hot temperatures.
However, they’re susceptible to diseases and pests.
This is because it’s easy for olives to become infected by diseases and pests.
If a pest infests a tree, then its olives aren’t going to contain as much liquid in them.
The pests are getting it all.
A disease can also impact the quality of olives.
If it doesn’t kill the tree outright, then it will make the olives less juicy.
As a result, farmers usually have less oil to sell.
Since it impacts their supply levels, prices for olive oil go up.
To ensure they’re able to keep their trees healthy, farmers spend a good amount of money on pest and disease protection.
Those investments can become pretty expensive for large orchards.
That’s because a lot of farmers also sell their products as organic olives.
To qualify as organic, they have to use a specific type of pest control.
Even using the wrong type of fertilizer can impact the health of the tree.
Olive oil is expensive because the costs associated with keeping the tree healthy and alive are high.
8. Supply Chain Costs
Olive oil is also expensive because of supply chain costs.
Olive oil passes through a lot of hands before it finally ends up in your kitchen.
It starts on a farm.
Then it gets put on a truck and heads to a manufacturing facility.
From the facility, it might go to a bottling facility.
Then it’s on another truck and taken to the harbor.
It’s loaded onto a ship, and then the ship goes to the United States.
From the United States, it goes back onto a truck.
The truck might take it to a specific market or a warehouse.
Eventually, it ends up at your grocery store.
All these steps cost money.
To cover those costs, the olive oil company puts a high price on their product.
9. High Demand
Another reason olive oil is expensive is because of the high demand for it.
Olive oil is attractive to many different people.
Those interested in healthy cooking buy it.
Those who follow a plant-based diet are likely to buy it.
Even those who just love the taste of olive oil buy it.
Of course, it isn’t just olive oil that has a lot of demand for it either.
Olives, themselves, are in high demand.
They’re a healthy addition to salads and other meals.
Some cosmetic companies also use olives in their products.
Because there are so many different industries and buyers interested in olives and olive oil, it means there’s a lot of demand.
Without enough supply to meet demand, the price of oil gets higher.
Whenever olive prices increase, olive oil prices also increase.
10. Grade Quality
A final reason olive oil is expensive has to do with its grade.
You’ll find that authentic extra virgin olive oil is the most expensive grade.
Olive oil that’s just advertised as “olive oil” tends to be the cheapest.
That’s because some grades of olive oil go through more manufacturing steps than others.
They’re more expensive to make.
High grades of olive oil also tend to get produced less than impure grades of olive oil.
With a high demand for pure olive oil, the price goes up.
Olive oil is expensive when you choose a higher grade quality.
Conclusion
Olive oil is a useful cooking ingredient that can make meals healthier.
The factors listed above are some of the reasons why olive oil can get so expensive.