Among the many questions that surround the sometimes almost “mysterious” world of olive oil, there is no doubt that concerning the price: how much must an extra virgin olive oil cost? Answering this question is at least as difficult as it is to answer a question like what should cost a wine. Immediately one would answer, it depends …! The parameters involved, namely those regarding the price of oil, are many and quite diverse. Rather than answering what should be the cost, I prefer to calculate the bottom price below which one no longer can buy a decent Italian extra virgin olive oil. In the period of harvest and production of oil (i.e. between October and December), you can easily visit some cooperatives in Southern Italy (including the areas of cheaper production) and find that the average price from cooperative local olives producers is about 53 $ per 100 kg. Assuming you want to get a decent olive oil, you should follow the processes of production which aim at quality rather than quantity. In such a situation we can say that the yield of oil will average 15%. Which means that a ton of olives produces about 150 liters of oil. Therefore, 1 liter of oil costs about $ 3.5 only for raw material (olives). At the cost of raw materials one must also add, as a minimum: 1) the costs of processing (pressing of the olives) 2) The costs of oil storage (temperature-controlled rooms and tanks under nitrogen) 3) costs of bottling 4) the cost of packaging (bottles, capsules, labels, etc.) 5) transportation costs (from manufacturer to point of sale) 6) revenues of the producer / bottler
7) the sales point revenues.
The quantification of the costs above is not easy, because it obviously depends on the areas of production, on the processing methods used, on packaging materials, etc.. But we can certainly say that, assuming 1.35 $ per liter for the costs above is quite correct.
Finally, considering revenues around 30% (which could be 40% and 20% for the producer and the retailer) as an average, the two steps (producer and point of sale) lead us to conclude that: at less than 8 – 9 $ per liter is mathematically impossible to buy Italian extra virgin olive oil.
Downside? Olive oil to 2,6 $ per liter available in supermarkets, can be neither quality oil nor Italian. In the best case (i.e when it’s made without the addition of refined oil) is made from olives that come from Tunisia or Morocco.
Nothing against Tunisian or Moroccan olives, of course, it’s just that to get a quality oil you should squeeze the olives within 24 hours of collection Now, imagine that olives can arrive in Italy after a trip by boat from Tunisia and piled in huge quantities! Because more than half the oil produced in Italy come from Tunisian or Moroccan olives, and these countries export most of their olives.
Having determined the minimum price below which is really difficult to buy 100% Italian extra virgin olive oil, one might ask why there is a wide range of extra virgin olive oil prices that are certainly superior to the one just seen.
The fact is that the price relates to an oil which I have called “decent” i.e., an oil that is made with Italian olives and that can really be considered extra virgin. This does not mean that such oil is, from a qualitative point of view, the best, for both the palate and to health. If you want to produce higher quality oil, you must meet a number of conditions that, starting from the cultivation of olive trees, through the olive harvest, to their transformation to stocking oil, require great care and professionalism.
Without entering into the merits of these requirements which are discussed in the following article that explains how to do the oil quality, but it is interesting to note that all these processes on the one hand tend to increase costs and on the other to decrease the yield of the olives in oil, the fact that the latter results in a final increase in the cost of the oil.
Finally it should be noted that the oil, although with a different value from the wine, is now entered in kitchens all over the world and there is no great chef who does not know how to recognize its important sensory and healthy properties. Hence it emerges that even a hedonistic feature such as, the type of bottle or label began increasingly to be taken into consideration when choosing. All features that tend to make prices levitate.
I end with my personal suggestions and guidance on pricing. Speaking of a 500 ml bottle (which I always recommend, because it is consumed first, thus avoiding the dangerous oxidation of the oil) I would say that when we place ourselves in a price range that goes from 9 $ to 10 $ we are sure that the product is of high quality.
Below this price you can still find good oils but it’s harder to know how to choose.
Above this price you can get to real excellence, and sayin whether or not the price is worth it, is highly subjective: in my case, when it comes to excellence of the quality level, I’m willing to pay.
The choice is yours!