Eurof Uppington on decommodifying olive oil, the largest and most fraudulent crop in the Mediterranean

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A conversation with Amfora’s CEO, Eurof Uppington, about the billion-dollar olive industry, decommodifying olive oil, paying our farmers premium prices, and more.

Such a key species in the Mediterranean, a region hit hard by climate change and political unrest, the olive tree. Extremely high-quality olive oil could almost be medicine, but most of the industry has commodified olive oil and is only looking for the bare minimum quality with the lowest price.

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How do we decommodify this crucial crop, and pay farmers for quality? What can we learn here and apply elsewhere, on other key crops in other regions?

From Farm to Market 

When olives are freshly pressed, they have a fluorescent green color, a fragrant smell, and they’re quite high in polyphenols, a nutrient. As olive farmers would normally have a small production (without their own mill) and very little market power, they sell their produce to brokers, who then commodify the produce by selling them to brands and agri businesses. It undergoes many processes (storing, packaging, blending, trading, etc.) before the actual product reaches the consumers, which results in the end product’s quality loss. 

“You lose all of the terroir, you lose everything that made that oil unique. To be honest, it’s a terrible industry.” – Eurof Uppington

Extra Virgin Olive Oil 

Even statistics can tell that compared to the amount of olive oil that’s produced, there is way more quantity that’s sold. So many bottles of olive oil would say “extra virgin,” but in reality, to be considered extra virgin, olive oil has to satisfy so many nutrient requirements. These include having a low free fatty acid level (0.8% or less) and passing certain taste tests. Olive oil also has level beyond the extra virgin, which has something to do with having a high polyphenol level (above 250 milligrams per kilo). 

“So if you only have to meet the criteria for 0.8, you can just mix it in with any old stuff. A few years ago, they were using paraffin to bulk it up.” – Eurof Uppington

From B2B to B2C

Eurof’s company, Amfora, started as B2C (business to consumer). It has been hard to manage because as it turned out true high-quality olive oil comes in liters, which is very different from what most consumers are used to getting in supermarkets (in small bottles). Amfora slowly shifted to B2B (business to business) and started supplying olive oil to restaurants as a side hustle. This side hustle became a better fit for Amfora’s business model as about 90% of their transactions now are restaurants, with a churn rate that is almost close to zero. 

“We’ve never really lost a client. We lost one client, that’s because his uncle started producing olive oil, and he was obliged to take that one. But we haven’t had any customer churn. It’s an incredibly sticky, incredibly addictive product.” – Eurof Uppington

The  Secret in Decommodification

Decommodifying extra virgin olive oil and getting rid of the food chain and the ecosystem between farmers and consumers give way for a 30% gross margin. It’s a win-win for farmers who can earn twice as much, as well as for consumers who will get the maximum nutrient density by paying the exact same amount they do now. The best thing is that the more regenerative the farmers are, the more earnings they could get as a premium price. The potential of the olive oil industry, which managed to increase its market share by 1% despite the economic crisis the pandemic brought, is key.

“The beauty of our model is that we can pay our farmers two times what they can get in the market.” – Eurof Uppington

Other Points Discussed 

Koen and Eurof also talked about: 

  • How olive trees bring biodiversity to Mediterranean lands;
  • Investing in technology;
  • The extractive agricultural ecosystem;
  • The astounding impacts of pushing for high nutrient density;
  • Distribution infrastructure for the regenerative agricultural community and supporting farmers.

To know more about Eurof Uppington and Amfora, download and listen to this episode. 

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The above references an opinion and is for information and educational purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.

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