Chile looks to global markets to promote premium olive oil

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Chile looks to global markets to promote premium olive oil

To set its product apart from international competitors, the Chilean olive oil sector has its focus set on forming strategic alliances through industry body ChileOliva. One such partnership has been with the World Environment Center (WEC) to Olives_arbequines006optimize clean production practices and energy efficiency.

In 2010, the U.S. Department of State established a cooperation agreement with WEC to support the private sector in saving money and protecting the environment. The agreement focuses on small and mid-sized companies in countries that have signed a free trade agreement with the U.S. Chile is among these countries.

WEC project consultant for Chile, José Miguel Lehuedé, explained the partnership to and the technical assistance provided to participating businesses to build greener practices.

"At the WEC, we are dedicated to finding sectors that meet a series of criteria defined by the U.S. Department of State that have to do with commercial relations. Second, there is criteria from WEC that has to do with the industry's situation and operational characteristics for project success," Lehuedé said.

The Chilean olive sector was of high interest for the U.S. Department of State, Lehuedé explained, not just for its nutritional value but also for the growth expectations of this young industry.

"The invitation to participate was made with the projection that ChileOliva would move toward the market requirements at any moment," he said.

"From the WEC's point of view, this was a sector that, being new, had not much explored topics like clean production and energy efficiency."

The pilot project began in May 2011 with nine companies affiliated with ChileOliva. Combined, these companies represent 70%  of the sector's production.

The initial phase of the project focused on olive oil processing plants in order to improve management and expand the range of possibilities for the sector.

During the project, 95 recommendations and action plans were made. In September 2013, 53 were implemented.

"Various opportunities were identified, basically related to energy and water management. While water consumption relates in large part to crop irrigation, some situations were identified in which water management was not totally in tune," he said.

"The situation was the same with energy. A great part of energy consumption has to do with water pumps in the field. So reduction of water movement could reduce energy consumption."

Another opportunity identified was the possibility of improving processing of unused pits.

"When we started the project, there were many companies that had boilers for the pits. But some of these ran on oil or gas, which has significant costs, especially for companies located far away. Fuel transport elevated costs," Lehuedé said.

"It was suggested that companies with boilers run on fossil fuels replace them with a biomass boiler to incinerate the olive pits."

Making a mark among the big dogs

In a market dominated by large producers, Chile is currently competing to achieve premium product quality rather than large volume. Around 90% of total national olive oil production is considered extra virgin.

"Today ChileOliva is focused on consolidating its market position through a quality product. It is creating space for itself and setting itself apart from other places of origin where there is not so much focus on quality," Lehuedé said.

Between 2008 and 2012, the main markets for Chilean olive oil were the U.S., Spain, Italy, Brazil, Venezuela and Canada. In recent years, export destinations have diversified. The product reached 42 countries in 2012, including Colombia, Mexico, England and Japan.

ChileOliva general manager Gabriela Moglia explained that many olive oil markets can be complicated to enter, given market saturation and dominance by well-established producers.

"The world olive oil industry is complex because there are five businesses that drive the global business. It is very difficult to enter," she said.

"With the market as difficult and complex as it is, businesses must be efficient. There is the issue of cost, so we look for businesses that are more competitive and efficient to reduce costs."

Photo: Arbequina olives, a variety from Spain that is grown in Chile, by Victor M. Vicente Selvas via Wikimedia Commons


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