Dynamics of the Extra Virgin Olive Oil Market 2025

Dinamiche del Mercato dell'Olio Extravergine d'Oliva 2025
Extra virgin olive oil (EVO) is not only a premium food product, but also a cultural and nutritional symbol of the Mediterranean. It is an integral part of the Mediterranean diet and a fundamental resource for the global agricultural economy. 2025 promises to be a decisive year for this sector, marked by economic, climate, and geopolitical changes that will impact the entire production chain. In this article, we analyze the main trends in the EVO market, exploring the challenges and opportunities for Italian producers, and offering strategies for successfully navigating the future.

Key EVO Market Trends 2025


1. Price Evolution


In recent years, the price of extra virgin olive oil has undergone significant changes. From 2021 to 2024, the average price rose from €4-5/kg to €9-11/kg. A slight stabilization is expected for 2025, with prices potentially fluctuating between €8.40 and €9.70/kg. This trend is the result of several factors, including increased production in the European Union (+30%) and the influence of climate and geopolitical events.

However, despite this apparent stability, the market remains vulnerable to external shocks. Extreme weather events, geopolitical crises, and shifts in global demand can cause sudden price swings. It is crucial for producers and industry players to adopt risk management strategies to address this uncertainty.

2. Spanish Production Domination


Spain is the world leader in the production of extra virgin olive oil, accounting for approximately 50% of global production. This dominant position allows Spain to significantly influence international prices and dictate market trends. The efficiency of Spanish production processes, combined with favorable agricultural policies, poses a challenge to Italian producers.

However, Italy can compete by focusing on quality. The added value of Italian EVOO lies in its variety of cultivars, innovative production techniques, and strong territorial identity. Promoting these distinctive aspects can help Italian producers differentiate themselves and conquer high-value market niches.

3. Challenges for Italian Production


Italy is facing a number of significant challenges in the olive oil sector. Domestic production has declined by 30% compared to historical levels, due to the fragmentation of olive groves, the lack of technological innovation, and the impact of climate change. Many producers operate on a small scale, which limits economies of scale and makes it difficult to compete on price.

To overcome these challenges, it is necessary to invest in modern technologies, improve farm management, and foster cooperation among producers. Adopting sustainable agricultural practices and accessing innovation financing can be strategic levers for boosting the sector's competitiveness.

Analysis of the Factors Influencing the Market


Strengths and Weaknesses


Every sector has its strengths and weaknesses. In the case of Italian extra virgin olive oil:

  • Strengths: Italy is renowned for the quality of its olive oil, with numerous protected origin certifications. Italy is renowned for the quality of its olive oil, thanks to centuries-old tradition and the variety of cultivars that give its products unique characteristics. While protected origin (DOP) and protected geographical indication (IGP) certifications may represent added value for some producers, even those without these recognitions can offer excellent olive oil, guaranteed by artisanal and innovative practices, the use of modern and clean facilities that avoid fermentation or oxidation, traceability, and careful selection of raw materials.

  • Weaknesses: Fragmented production and the lack of modern infrastructure limit the ability to compete internationally. Furthermore, reliance on traditional cultivation methods can reduce production efficiency. 


Opportunities and Risks (A Practical Approach)


In addition to strengths and weaknesses, it is important to consider opportunities and threats:

  • Opportunity: The growing demand for sustainable and organic products represents an opportunity for Italian producers.

  • Risks: Climate change, international competition (particularly from Spain), and the instability of global markets pose threats to the sustainability of the sector.


Traditional hand-picking of olives in a sunny olive grove

External Factors Influencing the Market (Insights)



  • Political Factors: EU agricultural policies, such as subsidies for new plantings and sustainability regulations, directly influence production and competitiveness.

  • Economic Aspects: The cost of raw materials and logistics has a significant impact on profit margins. Furthermore, financial market volatility can affect global demand.

  • Social Trends: Consumers are increasingly concerned about the quality, traceability, and environmental impact of the products they purchase. This awareness offers new opportunities for producers investing in sustainability.

  • Technological Innovation: The adoption of advanced technologies, such as precision irrigation and IoT-based monitoring systems, can improve production efficiency and reduce environmental impact.

  • Environmental Factors: Climate change represents a major challenge for agriculture. Extreme events such as droughts, floods, and heat waves can compromise production.

  • Regulatory Issues: Food labeling and safety regulations are increasingly stringent, requiring producers to meet high standards to access international markets.


Risk Assessment


Climate Risks


Climate change is one of the main threats to EVOO production. A 2°C increase in average temperatures could reduce Italian production by 40% by 2030. To mitigate these risks, it is essential to invest in water management technologies, resilient agricultural practices, and more climate-resilient olive tree varieties.

Impact of Logistics Costs


Logistics and transportation costs are rising due to fluctuations in fuel prices and environmental sustainability policies. A 10% increase in transportation costs can increase the final price by approximately €1.20/kg. Optimizing logistics and promoting local production can reduce these costs.

Strategies for the Future



  1. Technological Innovation: The use of advanced technologies, such as crop monitoring sensors and smart irrigation, can improve efficiency and reduce costs.

  2. Territorial Development: Promote local identity and product quality through certifications and targeted marketing strategies.

  3. Collaboration and Aggregation: Foster cooperation between small producers to achieve economies of scale and improve competitiveness.

  4. Environmental Sustainability: Adopt sustainable agricultural practices to reduce environmental impact and meet the needs of an increasingly eco-conscious market.


Conclusion


The EVOO market in 2025 will be a dynamic and complex environment, characterized by significant challenges but also great opportunities. The key to success lies in the ability to adapt, innovate, and promote local excellence. Investing in technology, sustainability, and effective marketing strategies will be crucial to ensuring the sector's long-term competitiveness.