SA Olive; the Past, Present and Future of the Olive Industry

By Leonard Arangis, Executive Manager, SA Olive

Background:
SA Olive transformed from an association into a Section 21 company a couple of years ago. Currently there are close to 150 members, and we are working on growing the participation over the next few years. It is important to understand that there are 3 predominant types of olive farmers. Some are running nurseries for the production of plant-material, some farm with table olives and others with oil olives. While one obviously finds combinations of the above, there are currently many obstacles facing local producers. In the face of the economic down-turn we find that our country has become somewhat of a dumping ground for oils, and to a lesser extent table olives.

This is due to the fact that SA producers only provide 20-30% of the domestic olive oil, and 50% of the table olive, consumption. Currently; we produce around 2 million litres of oil while the annual consumption is approximately 6 million litres and produce around 2 million tons of table olives while consumption hovers at around 4 million tons. It is therefore important that we maintain a steady flow of imports in order to compensate for these shortages. Unfortunately a large percentage of these oils are coming in at such a low base price that it is difficult for local producers to compete or even gain listings at retail outlets. The playing fields are simply not level.

The Good News and Immediate Action Plan:
The good news is that there is huge potential for growth in the industry. We are aware of many new orchards coming into production in conjunction with the fact that the local market is growing fast when it comes to olive products. The new emerging markets, and associated demographics, are experimenting and taking to new cuisine styles at an ever increasing rate by frequenting various cuisine offerings, such as Italian restaurants, more and more. This tendency is bringing them into contact with a new way of eating and preparing food. If we add the fact that everybody is aiming for a healthier lifestyle it becomes clearer to see why this market is in a growth-phase.

For the moment SA Olive will be focusing on getting statutory levies in place for local as well as imported olive products. This, in turn, will lead to a bigger budget which will thus facilitate a stronger generic marketing campaign and various other improvements. We’ll also be looking at updating our legislation and standards. By doing this SA Olive will be able to do regular tests on oils to maintain the set of standards laid down by law. This, together with the new Consumer Protection Act, will lead to better standards as well as better all round controls. We shall do everything possible to enhance our own industry.

Job creation is high on our list of priorities. Olive production is very labour intensive and the quality of locally produced oils is indicative of the fact that we have great harvesting teams and practices. The empowerment of these people including a clear BEE strategy will form a strong back-bone for future strategies. Currently we have 10 000 permanent workers employed, and an additional 30 000 in our seasonal workforce. This could easily grow to an extra 30 000 permanent jobs being created, if we can grow our local production to meet with the expanding demand.

The predominant cultivation areas and respective proportional market contribution, at the moment, are as follows: Western Cape (50%), Eastern Cape (15%), Northern Cape (10%), Free State (10%), Gauteng (10%), and Natal (5%). This is a great spread over the different provinces and we are buoyant enough to grow further in each of these areas.

It is difficult to make accurate predictions for 2020, but we can all have a dream. Here is our 10 point dream:
1. Ours would be to have created an even playing field when it comes to domestic products versus imports.
2. We would like to be close to a production level of 10 million litres, and furthermore provide for close to 50% of our consumption.
3. We would like to have farmers from all demographics, and be at least 20% black-owned, as an industry sector.
4. We would like to export around 3 million litres to countries around the world and become revered for our impeccable quality and standards.
5. To become an industry, working hand in hand with government, to prevent fraudulent oils reaching our shores.
6. We would like to have a clear policy and policing of quality standards and labelling.
7. SA Olive would be at the forefront of developing new, and better, farming methods and plant materials.
8. We would like to have enough money to be a fully fledged member of the IOC.
9. To have a country full of informed consumers working together with our generic marketing vision.
10. To have many beautiful olive themed lodges/spa’s around the country, turning this theme into one of the leading tourism incentives in our country.