Europe's olive shortage could affect some local retailers
When Rick Petrocelly, owner of The Olive Tap in Long Grove, heard about the olive shortage in Europe, he knew it could lead to some modest price increases.
Bad weather and pests have reduced the olive crops in Italy and other European countries, where a lot of olive oil is produced and later sold on his store shelves.
"We work with a lot of artisan producers, who are award-winning and very competitive. They are not like the bulk producers that provide olives for the grocery store brands," Petrocelly said. "Many did not have any crops or very small crops this year, so it is affecting our products."
Petrocelly said certain bottles of olive oil containing ascolane olives were increased about $1 per bottle. Yet other olive products, such as jars of arbequina olives or eating olives, remain the same and are untouched by the shortage. The Olive Tap has nine other locations across the U.S. and its products are sold in about 20 specialty stores.
The Olive Tap, like other specialty olive oil stores around the suburbs, are reviewing their product lines in the wake of reports about a shortage reported last week in Europe. Some retailers specializing in gourmet oils and other olive products may absorb any price increases in order to keep prices stable on their shelves and remain competitive for consumers.
The combination of bad weather and pests hit the harvest in Southern Europe, most of all in Italy, where production is about half from last fall. That's led to Italian wholesale prices increasing in mid-February, compared with a year earlier. That translates to shelf price increases of 15 percent to 20 percent in Italy, Associated Press reported this week.
In other countries, the ultimate price increases will depend on several factors, such as how much retailers take on the costs themselves and the change in currency values. The United States, for example, is likely to see a more modest rise in price as a stronger dollar keeps a lid on the cost of imports, the AP said.
And a reduction in global stocks won't mean stores will be out, but it could lead to higher prices. But die-hard foodies will likely go along with it, said Jeff Weidauer, vice president of marketing and strategy for Little Rock, Arkansas-based Vestcom, which works with many retailers in the Chicago and suburban market.
"But most consumers are probably going to change to other oils as a substitute," Weidauer said. "And frankly, a lot of that behavior will be driven by how much media coverage the shortage receives. The biggest change for U.S. supermarkets will be the demand shift for olive oil once prices do go up, and adjusting to the change in behavior from consumers so they don't go out of stock on alternatives."
Unlike Petrocelly, Olive 'n Vinnie's in Glen Ellyn has not received any increase in price notices from importers, said co-owner Karen Evensen.
"This shortage could affect us, but we are fortunate that we import olive oils from all over the world, such as Australia and elsewhere," Evensen said. "So a shortage in Italy won't affect us. We're so diversified that we're not worried."
• The Associated Press contributed to this report.