Spanish EVOO, leader in sales in the US

Spanish olive oil, leader in sales in the US over Italian olive oil

The trade relationship between the European Union and the United States has seen significant shifts, with a new agreement placing a 15% tariff on most European imports. This pact, while aiming to avert a broader trade war, has raised concerns among European agricultural sectors. Despite these challenges, Spanish EVOO, a leader in sales in the US, is demonstrating resilience and a strong market position. For the first time, Spanish olive oil is not only out-selling its competitors in the U.S. but is also exporting more bottled olive oil than bulk, marking a new milestone in a key, highly competitive market.

The EU-US agreement has left many European agricultural products, including wine and spirits, subject to tariffs, while the EU has agreed to eliminate tariffs on a wide range of US agricultural goods. This perceived imbalance has drawn criticism from European farming organizations like COPA-COGECA and ASAJA, who argue that the deal unfairly benefits the US at the expense of European farmers. They see this as a “strategic error” that harms an industry already facing rising costs and global competition.

Market Strength and Promotional Strategy

Despite the new tariffs, the olive oil sector remains cautiously optimistic. Rafael Pico, from the Spanish Olive Oil Interprofessional, believes the 15% tariff will have an influence on exports, but won’t cause a significant decrease. This confidence stems from a few key factors. First, many of Spain’s competitors already face similar or higher tariffs. Second, the U.S. market presents enormous potential for growth. American consumers are increasingly health-conscious and see olive oil as a healthy, though more expensive, option. Furthermore, the high per capita income in the U.S. allows consumers to afford premium products like olive oil.

To minimize any potential negative impact from the tariffs and to capitalize on this growing demand, the Spanish Olive Oil Interprofessional is already planning a new promotional campaign. This proactive strategy is designed to maintain and expand the presence of Spanish olive oil, a leader in sales in the US, by highlighting its health benefits and premium quality. The focus on packaged sales further reinforces this premium positioning, as it demonstrates a shift from being a bulk commodity to a valued consumer product.

Broader Concerns and Future Outlook

While the olive oil industry is navigating the new trade landscape, the broader agricultural community remains highly critical. Organizations like ASAJA and COAG argue that the agreement is an “unbalanced commercial agenda” that uses European agriculture as a bargaining chip. They are concerned that the pact gives US products preferential access to the EU market without equivalent benefits for European producers. This, they claim, creates an unfair playing field.

The new trade rules also raise concerns about differing production standards, as the US allows practices related to animal welfare, GMOs, and environmental regulations that are not permitted in the EU. This adds another layer of complexity, with European farmers potentially facing a competitive disadvantage.

While the new trade agreement presents challenges for the entire European agricultural sector, Spanish olive oil, a leader in sales in the US, is in a strong position to withstand the new tariffs. Its shift to packaged sales, combined with a targeted promotional strategy and a market that values health and quality, provides a solid foundation for continued success in the American market, despite the broader political and economic headwinds.