Olive Industry Sees Surge in Demand as Diets Grow in Popularity

The Australian olive industry is expanding rapidly as shifting consumer diets and a push for diversification away from traditional wine grapes drive demand for extra virgin olive oil, according to the Australian Olive Association (AOA). In 2025, Australia produced 18,000 metric tons of olives, up 22% from 2023, with farmers in regions like the Adelaide Hills and River Murray investing in new orchards and processing facilities to meet rising export and domestic sales.

Olive oil production has become a key growth area, with small-scale producers such as Leon Bettio of Rio Vista Olives in the Adelaide Hills transitioning from wine grapes to olives. “We planted our first olive trees in 2021 after seeing demand for high-quality extra virgin olive oil triple in the past five years,” Bettio told the Australian Broadcasting Corporation. “The margins are better, and the market is stable compared to wine, which is subject to weather and global price swings.”

Michael Esposito, president of the AOA, said the shift reflects broader industry trends. “Farmers are diversifying because olive oil is a recession-resistant product,” he said. “Consumers are trading down from wine to olive oil, and health-conscious buyers are driving up demand for cold-pressed, single-origin oils.” The AOA reports that 65% of Australian olive oil is now exported, with the European Union and United States as the top markets.

Why are Australian farmers switching from wine grapes to olives?

Three key factors are accelerating the transition: market stability, higher profit margins, and changing consumer preferences. Unlike wine grapes, which face volatile global prices and climate risks, olive oil production offers predictable returns. According to a 2025 report by the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES), olive oil yields per hectare are 30% higher than wine grapes in Australia’s temperate zones, with lower labor costs for harvesting.

Data from the Australian Olive Association shows that the average price for extra virgin olive oil in Australia rose 15% between 2023 and 2025, outpacing wine prices, which fell 8% over the same period due to oversupply. “The economics are undeniable,” said Bettio. “A hectare of olives can generate $20,000 annually in revenue, compared to $12,000 for wine grapes.”

What regions are leading the olive oil boom?

The Adelaide Hills and River Murray regions account for 70% of Australia’s olive production, with smaller but fast-growing operations in Victoria’s Goulburn Valley and Tasmania. The AOA estimates that by 2028, these regions could collectively produce 30,000 metric tons of olives annually, up from 18,000 in 2025.

In the Adelaide Hills, family-owned businesses like Rio Vista Olives have invested in cold-press mills to meet demand for premium extra virgin oil. “We’re seeing younger farmers return to the land because olive oil is a sustainable, low-tech crop,” said Esposito. “It requires less water than wine grapes and thrives in Australia’s climate.”

How is the industry addressing quality and export challenges?

Quality control remains a priority as Australian producers compete with established Mediterranean suppliers. The AOA has introduced stricter certification standards for extra virgin olive oil, requiring chemical testing and sensory evaluations. “We’re positioning Australia as a niche player in the global market—focused on high-end, single-origin oils,” said Esposito.

Exports to the U.S. and EU have surged, but logistical hurdles persist. A 2025 trade report by the Department of Agriculture, Fisheries and Forestry (DAFF) noted that Australian olive oil faces tariffs of up to 10% in the EU and 15% in the U.S., compared to 0% for Italian or Spanish competitors. “We’re lobbying for better trade agreements,” said Bettio. “If we can reduce tariffs, Australian olive oil could capture 5% of the global market by 2030.”

What happens next for Australian olive oil?

Industry analysts predict continued growth, with the AOA forecasting a 25% increase in olive orchards by 2027. However, challenges remain, including labor shortages in processing and competition from larger Mediterranean producers. “The next frontier is value-added products—like infused oils and cosmetic-grade olive oil,” said Esposito. “That’s where the real profit lies.”

For now, Australian farmers are betting on diversification as a hedge against climate volatility and market fluctuations. With global olive oil demand projected to grow 4% annually through 2030, the shift from wine grapes to olives appears to be a calculated risk paying off.

Sources: Australian Olive Association (AOA), Australian Broadcasting Corporation, Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES), Department of Agriculture, Fisheries and Forestry (DAFF), Rio Vista Olives.