Why Is Olive Oil So Expensive? (Detailed Answer)

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No doubt, olive oil isn’t cheap for most people, especially if you live in an area where people don’t grow olives. There’s a reason why it was called liquid gold in the past. Here are a few of the most important things that made olive oil such an expensive food.

Key Takeaways:

  • Olives don’t grow everywhere, which is one of the biggest reasons why the price of olive oil is high.
  • There’s a lot of manual labor in olive groves.
  • A pretty short lifespan and great health benefits also increase the price of olive oil.

7 Reasons Why Olive Oil Is Expensive

why is olive oil expensive

Let’s finally see the reasons why olive oil is such an expensive product.

1. Olives Yield Only Up To 20% Oil From The Fruit

You can get only up to 20 liters of olive oil on 100kg of fruit. I know it doesn’t sound so bad right now, but mostly, people get around 15%. And the average olive tree produces anywhere between  10 to 70kg of fruit.

For instance, you can get almost 100 liters of orange juice from 100kg of oranges. Now, you probably understand the difference.

Also, depending on the mill properties and machinery, the best mills can only extract around 92% of the oil content from the fruit.

2. Most Olive Growers Do Everything Manually

Only large companies have the machinery to gather olives quickly. Most people still do it manually, and the whole process is harder and requires more people, which means more wages = costs.

Professional olive harvesting machinery is very expensive, and people mostly use hand tools only when picking olives.

3. Olive Trees Can’t Go Anywhere

Even though olive trees are pretty resistant, they can’t grow everywhere in the world. Olive trees like a Mediterranean-like climate, which is warm summers with mild winters.

Even if you manage to grow an olive tree in a place where it doesn’t naturally grow, it probably won’t yield any fruits.

Also, olive trees need at least 3-5 years to start producing fruit. This means that olive growers need to work with a loss for a few years.

Furthermore, every year is different, and so is the olive yield. Some years, olive trees just won’t grow enough fruits, and in order to be safer, companies always charge a bit more, just in case the next year goes bad.

Just a quick example, here in my country (Croatia), olive oil is usually ca. two times cheaper when compared to the USA. That’s because a lot of people in Dalmatia (a region in Croatia) grow olives, and olive oil availability is much better than in the USA.

4. Olive Oil Has a Shelf Life

Unlike wine or honey, olive oil has a shelf life, and that’s also one of the reasons why the olive oil price is expensive. Olive oil is only good for 18-24 months from the harvest date, which means that the stocks are limited.

So, no one can make a large amount of olive oil and sell it through the 5 years period, which is possible with some other types of oils.

Also, if not stored properly, olive oil can’t last even close to 24 months. Professional grade containers made from inox can cost pretty much for large companies, which adds up to the olive oil price.

5. Olive Growers Mostly Produce Extra Virgin Olive Oil

Not all types of olive oils are expensive. The most expensive type of olive oil is extra virgin olive oil (EVOO). And olive growers mostly produce that. For instance, over 85% of olive oil produced in Greece is extra virgin.

Companies wouldn’t produce so much extra virgin olive oil if there’s no demand for it. So, people mostly want to buy extra virgin olive oil – since it’s the healthiest one.

Extra virgin olive oil requires specific access to growing olives, fertilizing, harvesting, and, in the end, oil production. All that adds up to the price.

6. Olive Oil Has Great Health Benefits

Both consumers and olive growers know the health benefits of olive oil, and that’s also one of the reasons why the price tag is a bit high.

More and more, people realize that olive oil is extremely healthy, and they’re switching from other types of oil (mostly canola and sunflower) to olive oil. With higher demand, prices are higher.

7. Production Costs (Watering, Fertilizing, Extracting, etc.)

Last but not least, production costs. This is probably the number 1. reason why olive oil is expensive. Even though growing olives isn’t expensive for ordinary people who grow a few olive trees, the costs of producing olive oil can be high for large olive growers.

Olive growers invest a lot of money in growing olives because they want to get more fruit every year, but they also want to produce high-quality oils so that they can compete with others in the space.

Is It Really Expensive? (My Opinion)

I mostly write only objective content, without my opinion in it, but in this article, I should give you my opinion. Is olive oil really so expensive? I think it’s not.

If we compare it to some other types of oil, yes, it’s expensive. But how much olive oil do you consume? On average, the olive oil consumption in the USA is only 1 liter per capita. So, even if the oil price is a bit higher, people don’t consume so much of it.

Hopefully, that number will increase, but still, olive oil is mostly used in small quantities, and spending a few bucks more to get a healthy oil shouldn’t be a problem for most people.

So, in my opinion, even though olive oil prices are pretty high when we take consumption into account, it doesn’t add up a lot to families’ cost of food.

Think About Growing Your Own Olives

family planting an olive tree, illustration

Whoever lives in an area that’s suitable for olive tree growth, I suggest you plant a few olive trees for your family’s needs. You only need 3-5 trees, which isn’t a lot of work, and it can easily become your new weekend hobby.

That way, you can save some money, and even better, you’ll produce your own olive oil, which will probably be much better and healthier than most olive oils in the shops.