New Markets, New Opportunities—Olive Oil
Greece’s food and beverage sector relies on more than 525,000 farmers, about 11-12% of the country’s labour force, for its steady and reliable supply of raw materials. In the European Union, more than 70% of agricultural production is transformed into consumables of the food and beverage industries that employ more than 4 million persons.
Food and beverage account for 2 billion Euro of Greek exports, with major destinations Italy (22.2%), Germany (17.6%), United Kingdom (8%), United States (5.4%), and Spain (4.6%). In 2008, the Food and Beverage sector grew by 1.2 percent. Olive oil accounts for almost 12% of the sector’s exports. Globally, 2.2 million tons of olive oil are produced, about 77% in the EU. Spain, Italy, and Greece are the top producers.
The olive and olive oil sector is dynamic and export-oriented and has a significant effect on Greece’s economy.
Greek olive oil production exceeds 300,000 tons annually and Greece is the third largest olive oil producer in the world. Per capital annual domestic consumption—at 16 kilograms—is the highest in the world. More than one third of all production—up to 135,000 tons (the volume of olive oil produced is dependent on the volume and quality olive of the year’s crop, which varies year to year)—is exported.
Greece is home to 120 million olive trees, more than 12 per Greek citizen. Since up to 70% of Greece’s olive oil is Extra Virgin Olive Oil, the highest standard available, Greece is the world’s leading exporter of Extra Virgin Olive Oil.
Primary markets for Greek olive oil are those in the European Union and there has been a significant increase in recent years of exports to Canada, Australia, Japan, and the United States, as marketing programs, brand awareness, and standardization have improved.
Greece enjoys 16% of the global market and more than 450,000 families in Greece depend on olive oil as a primary or secondary source of income.
Greece produces about 120,000 tons of table olives per year and is one of the country’s most important agricultural exports.
The Organic Market
As the demand for organic products increases globally, Greece’s olive and olive oil producers are quickly transforming cultivated land to be organically certified.
The number of hectares devoted to the production of organic olive oil has risen from 5,500 in 1994 to more than 38,250 in 2007 and the number of hectares devoted to organic olives stands at more than 13,671. The production of organic olive oil has more than tripled since 1999 and in 2006 was well in excess of 3,200 tons, of which two thirds was exported. Millions of trees each year are being transformed to being organically certified and Greece is poised to continue to benefit greatly from the worldwide demand for organic olives and olive oil.
Food and Beverage in Greece
Food and beverage is the most dynamic and high-growth sector in Greek manufacturing, accounting for 25% of turnover, 24% of employment, 25% of total capital, and almost 25% of added value. Foreign companies have experienced high rates of success in this sector since the Greek market has shown robust growth for almost a decade. In addition, Greece serves as an ideal bridge to the emerging markets of Southeast Europe and the Eastern Mediterranean.
Growth has been almost double that of the entire manufacturing sector and food and beverage companies are the leading exporters in Greece, accounting for almost 20% of total export sales.
Greece’s food and beverage companies have created a large sales and distribution network in Southeast Europe, a strength that is reinforced by the dynamism of the Greek enterprises operating in the region. Topping the list of products exported are vegetables, fruits, olive oil, dairy products, fresh seafood, canned fruits, olives, raisins, wine, and tomato products. And as consumption of olive oil grows, Greece is ideally positioned to respond in this sector as it the third largest producer of olive oil in the world.
Advantages of Investing in Food and Beverage
• Low operating costs
• Abundant raw materials
• Access to emerging growth markets
• Mediterranean diet is attractive globally
• Highly experienced labour force
Investment opportunities include boutique and niche market goods, the entire gamut of mass market items, products marketed as “Mediterranean,” and the exploding organic food sector.