Dive Brief:

• California's production of olive oil is slowly increasing, but it still only accounts for about 5.8% of the total consumed in the U.S., with a production potential that is still largely untapped, Vincent Ricchiuti, director of operations for ENZO Olive Oil, told Food Navigator. 

• One obvious solution is to plant more olive trees, but the problem is finding enough space for them, Ricchiuti said. Almond orchards and other crops in California take precedence, even though almonds need about 25% more water than olives.

• Consumer education about olive oil, how to use it and what makes a good product is another big hurdle the industry needs to get over, Ricchiuti told Food Navigator. He said that when buying olive oil, consumers should check for a harvest date on the bottle and buy within a year to 18 months of that date for best quality.

Dive Insight:

While the U.S. is the world's third-largest market for olive oil, Americans get most of it from Italy — even though, as Ricchiuti pointed out, the U.S. could produce a lot more of its own. The 400-plus olive growers in California produced a record 4 million gallons from an estimated 40,000 acres during the 2015-16 harvest, according to the California Olive Oil Council. The group estimates that 3,500 new acres will be planted annually through 2020. More than 75 varieties of olives are grown in California to make olive oil, which results in proprietary blends unique to the state.

Despite this product availability, many Americans aren't very familiar with the product and don't use it as much as Europeans do. Six out of 10 Americans never buy olive oil, Bloomberg reported. Total olive oil consumption in the U.S. has tripled since 1990, yet per-capita consumption is still only 0.8 liters, a tenth of what an Italian consumer uses in a year,.

These low consumption rates could be price-related, especially because there is a wider — and cheaper — range of oils on the market today than in past years. Another issue is that confidence in the product has been tainted by olive oil fraud — products mixed with lower-quality oil, adulterated or deceptively labeled. Italian producer Bellucci has taken advantage of this uncertainty by creating an app to keep track of the milling and bottling processes carried out by its growers in Italy. Consumers can trace any bottle of the company's extra virgin olive oil to its point of origin.

However, domestically grown and produced olive oil may present an edge in the market. Industry trade groups and agricultural agencies can keep a much closer watch on olive oil production. It's easier to guarantee authenticity when everything is produced on U.S. soil, and marketing campaigns touting this could win over skeptical consumers. Educational marketing, revamped packaging and even in-store displays could help capture more consumer attention. Olives are high in vitamin E and full of antioxidants and monosaturated fat, value-adds that today's health-conscious consumers desire. If producers can push these health benefits — and assure consumers that their products are the real deal — it could give the sector momentum.

The timing to shift more production to California might also be right. A bacterium recently found in Italy, France and Spain is threatening olive crops there. Olive oil production is down in the European Union — which produces 73% of the world's olive oil — and imported prices are up.