Why Olive Oil Is So Expensive

Let's figure out why olive oil, real saffron and vanilla are so expensive!

November 10, 2023・

16 min read

While the cost of food has shot up as of late, some food items like olive oil and saffron have always had soaring price points and the reasons why are astounding. Let's delve into the unbelievable reasons why some supermarket mainstays cost so much.

How Olive Oil Is Made

The global olive oil market was put at an astronomical $12.3bn in 2022 alone, and it’s predicted to keep growing. But why is something seemingly so simple such a lucrative goldmine?

To find out, let’s start things off with the basics. What actually is olive oil? It’s the fat extracted from olives, which is delicious to eat, can keep you looking pretty, and has a ton of health benefits too.

But, not all olives are created equally. There are more factors that affect the quality of a finished bottle of olive oil than you could shake a big leafy branch at. Altitude, harvest times, and the methods of harvesting all have a huge impact on what goes into the bottle on your supermarket shelves.

But the most important thing is the "cultivar", that’s the type of olive itself and the way farmers have bred them over centuries to produce the best oil. So, if the best olives make the best olive oil, where can you find the best olives? Luckily, olive trees are quite hardy and will bear fruit in a whole load of different climates. But, they prefer a little Mediterranean sunshine.

Spain, Italy, Morocco, Turkey, and Greece are the largest producers, with Spain growing a whopping twice as many olives as their second biggest competitor. You might believe that all they need to do is get the best olives, give them a squeeze, and that’s 30 bucks a bottle. But it's not that simple or easy.

It takes between 3 and 5 years for a new olive tree to grow any olives. And when fruit eventually does grow, farmers need to bring in the harvest at the right time to make the most of their yield.

That can differ depending on location but typically, throughout September and October, the olives accumulate a large amount of oil and get all juicy and fat. As the weather cools and the days get shorter throughout November, the oil accruement slows down.

By now the olives are so ripe that they begin falling off the tree, but if they hit the ground, the oil within them starts to break down and can be ruined. So, workers have to move fast and pick the precious fruit before it falls to avoid wasting what they’ve painstakingly waited for.

Roughly, it takes about 50 lbs of those super-fat olives to make a gallon of oil. That’s a colossal 36,000 olives. And each tree will only produce between 33 and 44 lbs of olives in a year. So, in order to make any money, farmers need more than a couple of trees to produce anything to sell. But the more trees you have, the more land you need to grow the trees.

That also means more workers are needed to help pick those olives. Even with the best olive pickers in the world, it might be worth considering calling in the big guns to help you out. Nowadays, nearly all olive harvesting is done in one of two ways, either by machine or by hand and each has its pros and cons.

Mechanical harvesting has grown increasingly popular as it’s a much quicker way of bringing in a massive yield. Large machines grip onto the trunks of olive trees and shake them really hard to release the fruits. Then they either fall into a sort of net, or a special device sucks them up.

Using those hulking machines, just one farmer can bring in a ridiculous 141 tons of olives every day. That’s about the same weight as a blue whale! However, there’s a drawback. The roughhousing at the hands of those machines isn’t exactly easy on the trees and can damage them. Plus, industrial farming machines can easily cost upwards of an eyewatering $100,000. That’s a mammoth cost to burden before you’ve even got any olive oil to sell.

As such, many olive oil purists and small-scale farmers prefer to keep things a little bit old school. Their technique involves people with experience putting a net beneath the tree then standing around and striking it with a big stick.

If a machine giving it a little shake is gonna damage it, surely beating it about can’t be good either? However, they’re not dishing out the beat down of the century on that leafy pinata, it only gets hit hard enough to dislodge the fruit.

On the other hand, while it’s lighter on the trees, it’s also lighter on yield. The number of olives produced by manual labor is much, much lower, at around 460 lbs a day, which isn’t even a quarter of a ton.

That’s over 560 times less olives. Sure, you’ve saved forking out loads of money for a big machine to do the work, but now you’re stuck with the wage bill for the huge legion of tree whackers you hired instead.

Once all the fruit is brought in it gets weighed to establish the quantity, then washed to clear off any unwanted dirt and debris. After that, it’s straight into a mill to be crushed. Crushing the fruit breaks down the plant tissues and releases some of the oils which turns the olives into a goopy homogenous paste.

Spain’s largest producer of olive oil crushes up to 2,200 tons of olives every single day. Furthermore, the whole harvest needs to be processed within 24 hours of bringing in the fruit to avoid fermentation or oxidation ruining the final flavor.

The next significant factor to consider is the temperature. Temperature control is of utmost importance in producing the best quality olive oil. If temperatures exceed 122 °F, the oil will begin losing all the nutritional benefits.

Even though, 122 degrees sounds like a lot and you would think that all the olives would melt away, traditional mills don’t have that problem. But inside the largest, most modern industrial machines, things get pretty toasty. As a result, those newer olive handling machines have to be specially configured to keep things nice and cool.

Finally, we can actually begin extracting olive oil. In the past, the most popular method for extracting the oil was arranging it in layers. Each of those layers is filled with olive goop and put under a lot of pressure to squeeze out the oil.

However, nowadays technology has afforded us a more high-tech solution to extraction called centrifugation. Those clever machines, called centrifuges, can separate particles in a liquid according to density. They spin the liquid super fast, which causes particles of higher density, that’s our oil, to separate from the water and debris.

Centrifugation has become more favored as it makes better oils at less cost. It’s a win-win situation. Out of all the 1,700 olive oil producers in Spain, only 0.5% still use the old-school pressing system.

At last, we’ve got our oil! All that’s left to do before packing it up and shipping it off is the quality control. This might sound boring but it’s really important in determining how much the oil is actually worth.

Extra Virgin Olive Oil VS Olive Oil

Have you ever wondered what the difference between olive oil and extra virgin olive oil is? Essentially, it’s a marker of certain flavor profiles and taste characteristics in the oil. Extra virgin is the tippy top shelf best you can get, but in order for oil to be extra virgin it has to have less than 1% acidity.

Low acidity levels indicate that fats in the oil haven’t broken down into fatty oleic acid. It also retains many more antioxidants, vitamins, and minerals. Basically, extra virgin oil not only tastes better but it’s better for you.

Virgin olive oil is the next step down, it’s made the same way as the extra virgin olive oil, except the acidity can be up to 2%. That doesn’t sound like a lot, but when you think that it’s over twice as much as the top-shelf stuff, it’s a huge reduction in quality.

As for the plain Olive Oil, you should stay clear of it. It might only be a quarter of the price, but you’d be lucky if even a quarter of it is actually the good stuff. If you check the label you will notice that those cheaper olive oils are packed out with cheaper oils.

But what actually are those cheaper oils? And what makes them cheap? Let’s take vegetable oil, the majority of cheap vegetable oils you see on the shelves are made from oil palm fruit. Those plants naturally grow in tropical rainforests and are evergreen and perennial, meaning they produce fruit throughout the whole year.

While an olive produces 10-20% of its weight in extra virgin olive oil, palm fruit is around 56% oil. In fact, one hectare of land could produce 0.3 tons of olive oil, but a staggering 3.2 tons of palm oil. That’s more than ten times the amount!

Because of that, biodiverse natural rainforests are being leveled to make way for more production-efficient but far less ecologically viable oil palm plantations. But that’s another story entirely.

As you have learned, by volume alone, olive oil isn’t exactly the most efficient product in the world, but that doesn’t mean it’s not worth the effort. The most expensive olive oil you can buy is Lambda Ultra Premium Extra Virgin Olive Oil.

Just 500ml, which is a little over two cups, is gonna set you back a shocking $12,800. Each bottle even comes in its own bespoke hand-crafted box, with two white gold plates, one of which is adorned with the name of the buyer. It’s supposedly well-regarded for its pungent fruity flavors.

In quick summary, olive oil is so expensive because making it is complicated. You need to buy the land, plant the trees, wait for them to bear fruit, wait again for the right time to harvest them, and then rush through all the other steps to produce the olive oil before the fruit goes bad. But olive oil isn’t the most complicated food to produce. Let's investigate other delicacies!

Why Saffron Is So Expensive

Saffron is a red spice used in European, South Asian, and Middle Eastern foods for its distinctive sweet and floral flavors. Not only is it delicious, but historically it’s been used in ancient beauty treatments, clothing dyes, and even as a traditional medicine.

In fact, saffron has always been highly coveted, and at times its pound-for-pound price has rocketed to over three times that of gold. It’s still extortionately high today, with the very best saffron fetching a mind-blowing $5,000 per pound.

That's because harvesting that steep seasoning is an incredibly intensive process. Saffron is picked from the Crocus sativus flower and is actually the stigma, or pollen receptor of the flower.

Each flower will only ever produce three stigmas, so once they’re gone, they’re gone. As if that wasn’t enough, each strand is so exceptionally fragile that any machine will damage them.

Saffron farmers have to painstakingly pluck the flowers by hand, then take the stigmas from them. And all that picking has to be done before sunrise, because the strands are so delicate that simply being exposed to the sun is enough to damage them.

What’s more, one full-time farmer harvesting saffron all day rarely collects more than the weight of a single jellybean’s worth. And then all the little strands must be dried out. That process varies from country to country but can take up to 10 days.

That sounds like back-breaking work and for the two to three weeks a year that those flowers bloom, it is! The entire year’s harvest happens in mere days. Factoring in the labor costs and the astounding complexities of producing the spice, it’s no surprise that saffron is the most expensive spice in the world by a colossal margin.

It’s a good job you only need the tiniest pinch to flavor your food, otherwise, all those Biryanis would have you re-mortgaging your house. You might be thinking that you have saffron in your cupboard, and only paid a few dollars for it. But are you certain what you’ve got is the real deal?

When there’s not a lot of product to go around, and prices keep going up, it opens up the market to cheap counterfeits. In a 2019 raid at a factory in Alicante, Spain, authorities seized an eye-watering $900,000 worth of bootlegged saffron ready to be shipped throughout Europe.

While many products that line our supermarket shelves might be labeled as saffron, they could easily be corn silk dyed to look like saffron, or in the case of the warehouse in Alicante, real saffron cut with other substances like cheap plant fibers.

But how can you make sure you’re getting the authentic experience? Price is a good starting point. If a deal seems too good to be true, then it probably is. Don’t get scammed trying to cut costs. Secondly, choose a reputable seller.

Iran produces 90% of the world's saffron, but Iranian saffron is arguably not the best, that prize goes to Kashmiri saffron, which is made from longer stigmas. Of course, better produce means a much bigger price tag.

Why Vanilla Is So Expensive

Whether that’s in your morning coffee, your favorite sugary snacks, or eating an entire tub of ice cream crying over your ex, the world’s second most expensive spice is vanilla. In its purest pod form, the so-called “boring flavor” sells for $600 per pound.

You might be surprised to know that the vanilla flavor you get in your lattes and puddings is actually an artificial compound called synthetic vanillin. Chemically it’s close to the real vanillin found in vanilla pods, but in reality, it’s made from a similar yet different molecule such as eugenol, which is extracted from aromatic spices like cinnamon, cloves, and nutmeg.

The eugenol goes through a process known as isomerization, which jiggles about the arrangement of the atoms into something more akin to organic vanillin called isoeugenol. Then it gets mixed with an alkali and undergoes an oxidation process where it’s combined with oxygen! That completes the big transformation needed for it to flavor all your favorite snacks.

Nowadays, it’s far more common for vanilla-flavored products to contain “fake” vanilla than to have even been in the same room as any actual vanilla. That's because the real vanilla comes from a particular type of orchid that originated from southern America and Mexico.

However, that’s not where the majority of the world’s vanilla comes from anymore. In the late 1700s, a large part of the global vanilla trade was moved to Madagascar, but farmers failed to account for one small problem. The orchids can only be pollinated by the Mexican Melipona bee, and they were all back in Mexico.

And no bees mean no beans. After decades of failing to produce any vanilla pods, the farmers had to become busy little bees and do the pollinating themselves. But they did figure out a way of doing it.

Vanilla orchids have both male and female reproductive parts, they’ve got the facilities but they need a little extra help. That’s where the farmers come in. They take a thin, pointy little stick and lift the delicate membrane that keeps the male and female parts separate. Then they bring the two sections together by pinching their thumb and forefinger.

That pollinates the plant and a vanilla pod will almost immediately begin to form, even though that makes it sound a lot easier than it is. It is finicky, fiddly work and it’s only made harder by the fact that vanilla orchids bloom just one morning every year.

Nine months after they’ve been pollinated, the pods are ready to be picked, but then they have to go through a lengthy curing process. First, they’re blanched in hot water before being placed in large sweat containers for between 36 and 48 hours. That is where the beans begin to change from green to brown.

From then, they alternate between drying in the sun during the day and going back to the sweat box at night, on and off for between five and fifteen days. After that, they go for another, slower period of drying indoors in a well-ventilated room atop special drying racks.

The whole process from growing and pollinating to finally having beans to export takes about a year. During that time, every 5 to 7 lbs of green beans shrinks down to just one pound of processed vanilla.

Cacao

Have you ever given a thought to how the chocolate for your favorite candy bars is made? And you would be surprised to know that, cacao, the plant chocolate comes from, is incredibly hard to farm.

Because the cacao pods all ripen at different times, farmers have to keep an eye on them all year round. Each pod contains between 20 and 50 beans sat in a white pulpy fruit. Those pods are hacked down from the tree with machetes, split, and all that beany goodness is scooped out.

But the choccy beans in their untamed, unsweetened form are incredibly bitter. Before they can become delicious chocolate they have to be fermented for 6 to 10 days to destroy the seed coat around the outside of the bean and improve the flavor.

Next, the beans are dried for between 5 and 10 days before being sorted and sold on. It takes one tree an entire year to produce enough beans to make a little over a pound of cocoa, so farmers need a lot of trees and that means a lot of work.

You’re probably wondering how cocoa has wound up in an article about expensive foods, as candy bars are just a couple of bucks. Is this not real chocolate? Not quite, it’s definitely real chocolate. In fact, in most of the Western world chocolate is pretty inexpensive.

Sadly, that’s not the case for the farmers who grow it. Over a third of the world’s cocoa produce comes from the Ivory Coast, but many farmers who spend their entire lives growing and processing the beans have no idea what chocolate even tastes like.

Chocolate candy bars in the Ivory Coast cost about $2.70, which isn’t a lot to you or me, but it’s about a third of a farmer’s daily pay. In order for most of us to enjoy cheap chocolate, the farmers right at the end of the supply chain get paid way less for their product.

That doesn’t mean you should feel bad for enjoying a delicious, sweet treat every now and then. Just try and buy more fair trade-marked goods, those ensure farmers are given a guaranteed minimum price for all their hard work!

I hope you were amazed at this analysis of why some delicacies are so expensive and how they are made. Thanks for reading!