Consumer demand for olive oil is set to strengthen, boosting industry revenue and profit
Los Angeles, CA (PRWEB) August 01, 2012
The Olive Oil Production industry has fared well over the five years to 2012 due to higher disposable income, greater demand from grocery wholesalers and olive oil's marketable health benefits. The industry has grown at an estimated annualized rate of 2.6% over the past five years, including a 4.3% increase in 2012, to reach $1.2 billion. Olive oil has received significant media attention for its health benefits, including its antioxidant, anti-inflammatory and anticlotting properties. Olive oil boasts these benefits due to the product's high phenolic compound content. According to IBISWorld industry analyst Lauren Setar, a growing number of health-conscious consumers is supporting industry demand. Additionally, the industry has faced increased demand for organic and certified extra-virgin olive oil, helping boost industry revenue and profit. Industry profit is estimated to rise as well.
Since olive oil is destined for consumption, the industry must adhere to significant regulation. Most recently, according to 2010 US Department of Agriculture (USDA) standards, olive oil producers can choose to have their oil tested for classification by the USDA. This process helps enhance a producer's reputation and differentiate the firm from its competitors. Although beneficial, testing can prove costly. As a result, regulation has curbed industry growth, says Setar. The industry experienced a decline in 2009, as it could not overcome globally depressed economic conditions. Due to decreased disposable income, many consumers switched to lower-priced cooking oils. With declining disposable income and lessened demand from grocery wholesalers, the industry's revenue fell 1.2% in 2009. The Olive Oil Production industry has low market share concentration, with no producer holding over 5.0% market share. Most industry operators are small, and the number of new entrants is increasing. For example, small farms, mills and wineries are adding olive plantings and processing facilities. Over the five years to 2012, industry firms have grown at an estimated average annual rate of 1.3% to 452 firms. Enterprises are set to continue increasing during the next five years, growing at an annualized rate of 0.8%.
Industry demand and revenue will strengthen over the five years to 2017. Consumers will remain conscious about their health and demand more olive oil for its health benefits. Revenue is expected to grow over the five years to 2017. During this time, a larger number of companies in the industry are likely to adopt the regulations necessary to become USDA-certified. This will enhance a company's reputation and provide it with a competitive advantage, which will be significant as the number of industry firms increases. Over the five years to 2017, the number of companies is expected to grow as more small producers enter the industry. For more information, visit IBISWorld’s Olive Oil Production in the US industry report page.
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IBISWorld industry Report Key Topics
This industry makes edible oil out of olives, including different grades like refined olive oil, virgin olive oil and extra-virgin olive oil. Generally, olive oil producers retail products to wholesalers, supermarkets and online retailers.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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