A key part of R&D’s role is choosing the right ingredients for the job. If you (or your marketing team) is set on using olive oil, you will need to decide which grade is right for what you’re trying to accomplish.
Two of the most common grades are Extra Virgin Olive Oil and Pure Olive Oil (also called just ‘Olive Oil’).
There are a few key differences between these two types of olive oil when you look at them from your R&D or corporate chef’s eye’s. There’s also a few differences in how these grades are priced, which you should understand if you’re on the purchasing side of things.
Pure Olive Oil
Pure Olive Oil has a light color.
Pure Olive Oil has a mild flavor, without much taste to it. It won’t strongly affect the taste of your product that you put it in, similar to canola, sunflower or soybean oil.
Pure Olive Oil doesn’t have much taste, which means that it also doesn’t have much smell to it. The aroma will be very mild.
Mild Qualities Are Produced From Refining
Wondering how all these qualities of Pure Olive Oil came to be? This oil is produced using high heat refining. This process removes much of the color and flavor of the oil, which makes it more like a conventional fry oil than a special EVOO.
If you’re curious exactly how Pure Olive Oil is made, you can learn more here.
Extra Virgin Olive Oil
Wide Variety of Colors
Extra Virgin Olive Oil comes in a wide variety of colors, from light yellow to dark green. In opposition to what many people believe, the color of olive oil doesn’t indicate its quality. It all depends on when it is harvested, how ripe the olives are, and they type of olives that are used.
Wide Variety of Flavors
Extra Virgin Olive Oil also comes in a wide-variety of lush flavors. You will find some oils that are mild, buttery or sweet, and others that are more pungent, strong and/or peppery. The flavors each depend on the varietals of olives that are used to make that particular oil, as well as other crop related discussions like the amount of rainfall, and other qualities that can be imparted by the soil.
EVOO Is Unrefined
Extra Virgin Olive Oil is an unrefined olive oil, which means that it’s literally just fresh squeezed olive juice. It is an oil that’s cold pressed (or cold spun, really) and produced without heat from the first crushing of the olives.
If you need an unrefined olive oil, Extra Virgin Olive Oil or Virgin Olive Oil are your options.
Pricing of EVOO vs. Pure Olive Oil
In a perfect market, Extra Virgin Olive Oil is the most expensive, high quality oil. When the discussion of supply and demand comes into play in the bulk market (because olive oil, after all, is sort of a commodity but not exactly), this can sometimes skew the price discussion when you’re comparing EVOO and Pure Olive Oil.
I’d like to compare two different crop seasons to show you what happens with the pricing depending on how good the olive supply is — we’ll first look at a harvest season that is ideal and then we’ll compare to one that’s not, to help you see the differences in price that can happen.
Why does this matter? Well, the commodity market can actually skew the price to quality scale of EVOO vs. Pure Olive Oil so this discussion answers the question,
Why does my Pure Olive Oil cost more than Extra Virgin right now?
In A Bountiful Olive Harvest Season
In the perfect harvest season, olive oil is plentiful. There are large reserves held in Spain from last year (why Spain, you ask? Learn here.) There’s lots of olive oil being produced this next year too. Every country around Spain is also producing plentifully. This means that there’s lots of EVOO to go around, so some of it will end up becoming Refined Olive Oil, and then blended into Pure Olive Oil.
Curious about this process? Learn more about how Pure Olive Oil is made.
In this market, prices make complete sense: EVOO prices are the highest, and Pomace is at the lowest. Pure Olive Oil falls somewhere in the middle between the two (maybe slightly on the higher EVOO side, but not much) and Refined Olive Oil prices come in just below Pure Olive Oil. You can see this price comparison mapped out below.
Ah, life is good. And the price of Pure Olive Oil makes sense.
In A Poor Olive Harvest Season
In a poor harvest season, Extra Virgin Olive Oil is in high demand and in low supply. Spain is low on their reserves, and their crop for the year is not looking good. Farmers are taking the best possible care of the olives that they do have, in the hopes of preserving the majority of their olives for the best oil (EVOO), and making the most money possible from their harvest.
Because of the low supply of EVOO, there’s not many olives that are available to be refined into Pure Olive Oil. In the meantime, this Pure Olive Oil is still in consistently high demand from consumers and bulk users, and now there’s a low supply. Prices of Pure Olive Oil, in this poor market, will often rise to the same price of EVOO, or fall just below it or even above it.
How Sourcing Models Can Confuse The Price Comparison
This discussion gets even more confusing when it comes to suppliers like Centra Foods. We source oils from all over the globe, which means that in poor harvest seasons, we may buy entire crops from our partners in South America instead of Spain.
Last year, the cost of EVOO from South America was more competitive than in Spain, so that’s where we got our inventory from. The cost of Pure Olive Oil, which still came from Spain (they produce the most of this oil, and it can’t always be found in other markets), was then higher than the price of the EVOO from a different more competitive region.
All of this pricing is really was a result of the global commodity market and supply and demand — not the quality of the oil itself. In a good market, the price of EVOO and Pure will return to exactly what it should be.