Olive Oil Gazette Interviews

Cesar Cólliga Martínez - IOOC Tasting Panel Chief

2007-12-11T19:40:00.000+01:00

The panel of olive tasters is an integral part in the process of designating the extra virgin grade to a sample of olive oil. Aside from the fundamental requirement that it contain less than 0.8% oleic acid, among other restrictions on its chemical makeup, olive oil must pass through the noses and mouths of an officially approved panel to assure that it meets the sensory standards befitting a product of the highest quality. So who better to talk to about the art of olive oil tasting than a man bearing the official Spanish Ministry of Agriculture and International Olive Oil Council title of ‘tasting panel chief’, entitling him to set up panels throughout the E.U. and the member countries of the I.O.O.C., and who makes his living as a consultant assisting European denominations of origin and government bodies in establishing and receiving approval of their own.

Our interview today is with César Cólliga Martínez, a Madrid native holding a degree in agricultural and food chemistry from Universidad Autónoma de Madrid, who at 35 years of age has become one of the country's acknowledged experts in this field. Through his consulting firm, Arco Agroalimentaria, Mr. Cólliga has successfully guided the agriculture ministries of the autonomous communities of Murcia, Madrid and Castilla-La Mancha and Extremadura (ed. note: these political subdivisions can be considered the equivalent of individual states in the U.S.) and the Centre for Investigation and Quality Control of the Spanish Ministry of Health through the process of receiving official accreditation from the Spanish Ministry of Agriculture and the International Olive Oil Council. He is currently working with the Portuguese Protected Denomination of Origin, Tras Os Montes, to bring the skills of its tasting panel in line with what is required of a European P.D.O. The feather in Mr. Cólliga's cap is that no panel he has trained has ever failed to pass the rigorous certification test required for accreditation.

The interview was conducted, edited and translated by Charles Butler Mackay for The Olive Oil Gazette - The Spanish Olive Oil Industry News Source.

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C.B.: Is there a prescribed line of study to become an accredited olive oil taster?

C.G.: No, there is none, although courses are offered in several centres in Spain. To receive your accreditation, one has to pass the test. How you come to achieve the skills necessary is entirely up to yourself.

C.B.: In your case how did this happen?

C.G.: When I graduated from university, I first went into business as a commercial agent in the olive oil industry. This gave me the opportunity to come into direct contact with olive oils from most of the producing areas in Spain. When I saw the possibilities available for someone with those skills in the context of the modernization of the Spanish industry, I went on to learn as much as I could.

C.B.: What are the official requirements for a taster?

C.G.: In order to receive official accreditation, a candidate must twice successfully grade five samples of olive oil of known qualities in such a way that his assessment coincides with that already assigned by the Ministry of Agriculture. They send you five bottles, identified only by numbers, and you taste them and fill out the official grading form. If it doesn't coincide with what they have already decided are the characteristics of the oil, you don't get your license. And this process is repeated twice a year for a long as you hold your license.

C.B.: What are you fundamentally looking for when you first test an olive oil?

C.G.: The very first thing we want to find out is if the oil has any negative attributes and exactly what they are - anything that indicates that there might be faults stemming from an inadequate production process. If a taster finds defects in the oil, he first categorizes them by type and then describes their intensity.

C.B.: What do you do if you find any?

C.G.: The I.O.O.C. provides an official form for tasters to fill out. (ed. note: the reader may download a PDF copy of this form at the end of this interview.) It lists the possible defects, as well as the positive attributes, so we basically check off the problem areas if there are any. All tasters must use this form, by the way. That's how the process is standardized.

C.B.: What are the categories of undesirable smells?

C.G.: The most important ones are 'rancid', 'winey-vinegary', 'fusty', which is the flavour that derives from the fermentation that takes place when a producer leaves the fruit heaped up for a long period before delivering it to the press, 'muddy sediment', which is an off smell that results from the oil having been stored in vats that have not been regularly cleaned, allowing the accumulation of sediments, and 'musty-humid'.

C.B.: Are there more?

C.G.: Yes. We could also include 'hay-wood', an odour that occurs if the olives are allowed to freeze on the tree before harvesting.

C.B.: How does that happen?

C.G.: Well, if the fruit freezes, the molecular structure of the olive is broken and the oil ends up coming in contact with the pit, which imparts this odour. There are seven or eight more known defects, but these really are not very important.

C.B.: Obviously, the next question would be about the good qualities that a taster is looking for.

C.G.: Once we have determined that the defects, if any, are not sufficient to eliminate our olive oil sample from the extra virgin category, we go looking for the good points. The first, and most important point is that it must smell of olives. It is, after all, the juice of that fruit.

C.B.: And then?

C.G.: Next we detect what are called the 'green odours', and there are two of them. An extra virgin olive oil should smell of either lawn grass or green tree leaves. Those are the two options given on the form. For example, in the area we are in now (ed. note: Jaén province) where nearly all the olives are picual, the smell would be 'green leaves'. In reality, oil from this varietal reminds me very much of the smell of fig leaves, but that fine a distinction is not officially sanctioned.

C.B.: But the labels on bottles of olive oil are always making comparison to different fruits, and the like, so there must be more to it.

C.G.: That's the next step, to categorize the oil by the sensation of fresh fruit transmitted through its smell. The permitted choices are: apple, almond, tomato, plantain or artichoke.

C.B.: Are these not just purely subjective categories, though?

C.G.: No. Not really. They derive from the chemistry of a given olive oil, which will share elements in common with the fruit that it smells of, the same as in wine.

C.B.: What's the next step?

C.G.: We call this first phase the 'direct analysis'. The second, the 'indirect', is the actual tasting of the olive oil in the mouth.

C.B.: What are you looking for there?

C.G.: The main sensations we're looking for in the mouth are bitterness and pungency.

C.B.: And these are mutually exclusive?

C.G.: No. No. They are distinct flavours to be found in olive oil.

C.B.: Okay. So we take a sip of the olive oil and what happens?

C.G.: We are first looking for the bitter sensation. To find it we let the oil move back along the tongue until it reaches here (indicates the jaw joint on his face), the back part of the tongue on the sides. Then I continue to swallow the oil until it reaches my throat (at which point the natural reaction, even for me, is to cough), and that is where I sense its pungency.

C.B.: But you notice nothing on the tip of the tongue, or anywhere else?

C.G.: No. Nothing. The tongue registers different classes of flavours in different physical locations. Sweetness is perceived on the tip, for example, and acidity on the sides of the tongue near the front. Anybody that tells you that something on the tip of the tongue tastes bitter is fooling himself. These are physical facts.

C.B.: So a sweet oil we would be able to notice when it enters the mouth.

C.G.: No. When we refer to an oil as 'sweet', we actually mean that it is lacking, relatively speaking, in the sensory qualities of bitterness and pungency. As the oil moves back along the tongue, the bitterness becomes more intense. Now, after testing for these two, a taster will concentrate on confirming the aromas that he had detected at the beginning.

C.B.: So, there must be some way of distinguishing between degrees of bitterness and pungency.

C.G.: What we do is give the oil a mark between one and ten for what is referred to as its 'intensity'. This scaling is the hardest thing to learn. In the test, they give you five samples of oil, each with its own characteristics, and you have to state that oil number one has a bitterness of three, number two, a seven, and so on - and get it right.

C.B.: Alright. Now lets take the case of a consumer who goes to the store and buys his bottle of extra virgin olive oil. It's possible that this person has never really noticed what a plantain or an artichoke smells like. What should this person be doing in order to distinguish between a good and a bad olive oil?

C.G.: The most important quality for this person is freshness. A high quality extra virgin olive oil will have the aroma and flavour of a fresh fruit juice. It will have a certain clean sharpness to it. The person should put the oil in a brandy snifter, which is a good substitute for a tasters' glass, cover it for few minutes, making sure it is around 28º centigrade (83º F), then take the lid off and breathe the aromas in through the nose. It should smell, I repeat, of freshness and should not transmit any sensation of mustiness, staleness, rancidity, or anything else disagreeable.

C.B.: And next?

C.G.: Then the person should try and appreciate the individual odours. Even if they know nothing of apples or almonds, they should be able to appreciate a certain complexity of aromas. But fundamentally it is a matter of finding an oil that gives the sensation of freshness and has a certain 'snap' to it. That is what a good extra virgin olive oil is.

C.B.: Extra virgin olive oils usually have something on the label that relates its acid content. Is that the same thing as the 'wine-vinegar' aroma that you mentioned in the list of undesirable characteristics?

C.G.: No. It is an error that is made very often on the part of consumers. But it has nothing to do with it. This refers to the oleic acid content of the olive oil. The maximum permitted by the I.O.O.C. for an oil classified as extra virgin is 0.8%, and this is an amount not detectable in the nose or mouth.

C.B.: What is about then?

C.G.: It is really a matter of freshness. The oleic acid contained in an olive on the tree is approximately zero.

C.B.: So where does this acidity come from?

C.G.: What happens is that the oil molecules in the olive can be broken up, so to say, in the process of harvesting, transporting or pressing and the parts that 'break off' and begin to float freely in the liquid are these fatty acids. That is what that number measures.

C.B.: What effect does this have on the quality of the olive?

C.G.: Simply, it's very difficult for an olive oil containing more than point-five percent acidity to have all the characteristic qualities of a good product that I mentioned before.

C.B.: So, for the consumer, this would be a method of pre-selecting on the store shelf.

C.G.: Exactly. The lower the acidity, the better the chance that you will be buying a good oil. Any extra virgin olive oil processed under optimal conditions will contain 0.5%, or less. It will be from olives harvested with some care and taken to the mill and pressed the same day. Any oil with a higher level is almost certain to suffer from one or another of the undesirable traits we talked about earlier.

C.B.: In the case of an oil produced under a denomination of origin, what is the process through which it becomes classified?

C.G.: The first test is of the molecular contents of the olive oil - the acidity we talked about earlier, the level of peroxides, as well as a few other factors. Secondly, every P.D.O. has its own officially sanctioned panel of tasters (my business, as I said, being their establishment). Samples are taken from distinct lots of oil that have passed the laboratory test and are assigned the label of virgin or extra virgin by the tasting panel.

C.B.: Do you think that this system is worthy of the consumer's trust?

C.G.: Listen, if a co-op, or other miller, gets caught passing off lesser grades as extra virgin not only do they pay a huge fine but they can expect to have inspectors all over them for the next few years of their lives. In my experience, the vast, vast majority (and I mean approaching 100%) of extra virgin designations given in Spain are completely legitimate.

C.B.: What is your opinion of the 'electronic nose', to be used for olive oil selection, that is being developed in Sevilla at this time?

C.G.: It seems to me to be maybe a little too complicated a task for a series of electronic sensors. Keep in mind that olive oil contains more than five thousand volatile compounds. You can isolate the compounds that produce the aroma of a plantain and compare it to compounds contained in a sample of olive oil, but what you can't know is how many others actually contribute to that sensation. There has been much interest in the wine industry in the possibility of constructing such a machine, but, as far as I know, they have yet to come up with a satisfactory working system.

C.B.: In recent years in Spain, a fairly large number of P.D.O.'s have appeared. Do you think this is a positive development for the industry, or perhaps an evolution that only serves to confuse the consumer?

C.G.: It depends which consumer you're talking about. Within Spain, there are probably a large number of people that have a preference for olive oil from certain regions, for whatever reason, and are willing to pay a bit more for it. Outside of the country, it's probably irrelevant. Few people in Minnesota have even the faintest notion where Cazorla, for example, is or what picual or royal olive oil tastes like. The solution is simple. Exports are marked as 'Product of Spain' and domestic sales carry the P.D.O. label.

C.B.: I don't have any more questions, but is there something you'd like to add?

C.G.: Nothing. Just that anything you need in the way of information or commentary, feel free to call anytime.

C.B.: Thanks, César. You'll probably hear from me.

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Cesar Cólliga’s consulting company is Arco Agroalimentaria, S.L. He can be contacted at info@arcoagroalimentaria.com.

Download the IOOC form, Sensory Analysis of Olive Oil, here (PDF).

Juan Manuel Martínez - manager, Aceites Cazorla

2007-12-08T19:56:00.000+01:00

When our local co-operative mill, Aceites Cazorla S.C.A., settled accounts with its members (this writer included) last month at 2.44€ per kilo, our immediate reaction was to go over and congratulate its manager, Juan Manuel Martínez Martínez, on a job well done in what had been a fairly difficult market for producers. In fact, despite selling production almost entirely comprised of olive oil proceeding from picual olives - typically the cheapest on the market - he managed to distribute the co-op's earnings, after expenses, at about 4 eurocents under the national average price for all grades and varietals. We also thought that an interview with Mr. Martínez would be appropriate, right about now, seeing as Aceites Cazorla switches on its four conveyor belts for this year's harvest on Monday. We trust our readers will find it interesting.

This interview was conducted, edited and translated by Charles Butler Mackay for The Olive Oil Gazette - The Spanish Olive Oil Industry News Source.

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C.B.: How long have you been managing Aceites Cazorla?

J.M.M.: I started in December of 2000. So, almost seven years.

C.B.: Can you give us a short history of the co-op?

J.M.M.: The co-op first opened under the name 'Santísimo Cristo del Consuelo' in 1951 and over the years underwent various changes until the last major one, in 1998.

C.B.: What was that?

J.M.M.: Originally, the mill was located within the town limits of Cazorla. But, in that year, a deal was made for the property and a new tract was bought where we are now (ed. note: about two miles out of the town limits) and the new press was built from scratch, with all the most modern equipment of the time - which we continue to upgrade on a regular basis. The first crop pressed here was 1998-99.

C.B.: How many members do you have?

J.M.M.: Well, let's talk of active members. There are about 1,600.

C.B.: And how many kilos of olives pass through here in a year?

J.M.M.: It depends on the crop, of course, but last year we processed just short of 21 million kilos of fruit.

C.B.: And olive oil from that?

J.M.M.: 4,550,000 kilos. That's a bit over 21% net yield.

C.B.: The co-op mills the two olive varietals grown in this area separately. What percentages of each do you end up processing?

J.M.M.: That's right. The very late maturation of the royal olive allows us to open one line exclusively for this type at the beginning of February, when much of the picual has been harvested. In the end, about 6% of our oil is from this cultivar.

C.B.: What are the differences in the oil produced from these two?

J.M.M.: The picual produces an oil that is generally more piquant and strong-flavoured. The royal, on the other hand, is the exact opposite. Its oil is very light to the taste compared to many others. Many people prefer it for dressing salads, putting on their morning toast, and so on. Any use where they are consuming it directly.

C.B.: Are they processed differently?

J.M.M.: We do not filter the oil from the royal so as not to take away any of its flavour. On the other hand, this is done to the picual oil. Customers not familiar with this might be taken aback by the sediment that collects on the bottom of bottle or can of royal oil. But this has no more significance than it has with a bottle of wine.

C.B.: The co-op also has a bottling plant, right?

J.M.M.: That's correct.

C.B.: Has that been a successful venture?

J.M.M.: I think so. In the seven years I have been here, we increased our sales of packaged oil from 100,000 litres to over 700,000.

C.B.: Impressive!

J.M.M.: Yes, we're pleased.

C.B.: And these sales are primarily wholesale to distributors or directly to the consumer?

J.M.M.: We sell approximately 90% either directly to the public through our warehouse here at the side or to stores directly. We do not go through any middlemen, other than the shopkeepers themselves. We also ship olive oil directly to consumers throughout Spain, ordered either by phone or through our website.

C.B.: And what percentage of each varietal do you sell bottled?

J.M.M.: Here, the story changes. Despite the fact that it only figures marginally in production, 20% of our direct sales are extra virgin from the royal olive.

C.B.: Do you blend the two?

J.M.M.: Yes, in fact, it is one of the great advantages that Aceites Cazorla has with respect to other producers of picual olive oil. All of our bottled production of this type contains a small percentage of oil from the other to reduce its inherent bitterness and make it more agreeable to the palate.

C.B.: What percentages?

J.M.M.: It changes depending on when the oil gets bottled. Early in the crop year, when the picual is at its most peppery, we might add 15% of the other. But as the first loses this flavour over time, we might reduce it to 5%. In this way we attain a very consistent product in terms of taste, regardless of the time that has passed since harvest.

C.B.: Does the oil you sell to the public carry the P.D.O. Sierra de Cazorla?

J.M.M.: Yes. Aceites Cazorla has made a decision to market only a quality product. All that we sell bottled or canned is extra virgin and carries the denomination sticker.

C.B.: That's a little more time consuming, isn't it, always sorting through the various categories of oils that get pressed?

J.M.M.: It would be, but we do a pre-selection. In contrast to the policy of many other mills, we distinguish, at the time the farmer delivers his olives, between those picked directly from the tree and those that have been collected off the ground. If we see that a delivery contains alot of soil, we assign the driver to a dedicated line, the oil from which is automatically classified as lampante. Now, our members know how it works and they automatically go to the correct bin.

C.B.: So what percentage of the olive oil you produce becomes graded as EVOO?

J.M.M.: In a normal year, it rounds out to about half. Last year we produced a little over two million kilos.

C.B.: And lampante?

J.M.M.: It generally turns out to be about twenty percent, with the remainder virgin.

C.B.: How much storage capacity does the co-op have?

J.M.M.: As it stands now, 4 million kilos. Having enough storage for a good crop shields us from the necessity of having to sell at whatever price just to make room for new deliveries.

C.B.: Does Aceites Cazorla belong to any larger organization of co-operatives?

J.M.M.: Yes. We've joined forces with the San Vicente mill in Mogón, about thirty kilometres from here, to form what is called a second degree co-operative. It is called Cazorla y Las Villas and it is intended to give the two associations a bit more bargaining strength in the bulk sales business.

C.B.: Have you seen the amount of oil produced here increase over the years you have been managing the co-op?

J.M.M.: In general, yes. Though you have to take into account the ups and downs of the crop from year to year.

C.B.: Is this because of increased production of olives?

J.M.M.: Yes, but not entirely. This year, for example, will be the first in which the members of a recently formed irrigation co-operative will be delivering a crop that has received a full quota of water. The 90,000 trees that this represents will certainly show up in this year's numbers. But, in the end, what counts for a member is the money which we distribute every October per kilo of oil delivered. And, in this aspect, we have a certain advantage over most of the other co-ops in the area and each year we see more olivareros deciding to deliver their crops here.

C.B.: How do you manage that?

J.M.M.: Well, it all comes down to the value added from our retail sales. The advantage we have is that we are the only co-op mill in Cazorla, a town which attracts alot of tourists every year and whose name is very well known to people throughout Spain because of its beautiful setting in the mountain range that is named after it.

C.B.: The announced end to the European Union olive oil subsidy is going to put some pressure on the co-operatives to make up what might be a sudden twenty percent drop in income for farmers. Do you have any thoughts on this challenge?

J.M.M.: First, you are going to see a large number of farmers converting their operations to intensive or super-intensive, if the conditions permit. So, in those cases, the problem does not fall on our shoulders.

C.B.: Yes, but in this area, with its small farms located on steep terrain, it is more difficult for individuals to take advantage of technological advances.

J.M.M.: The main contribution we can make is to continue to increase our sales of bottled olive oil because, when it comes to bulk, the price is dictated by the market at any point in time. Also, much of the money that now goes to olive oil subsidies will be deviated to what is called 'rural development'. What we are hoping is that the protection of the traditional olive grove, in areas like this that are not apt for modernization, will fall under that definition and that subsidies will continue to support to some degree.

C.B.: Every year, there are complaints from the bottling and merchandising sector of the olive oil business that the Spanish co-operatives conspire to fix a minimum price for bulk sales. Can you comment on that?

J.M.M.: No. That's completely and categorically false. Look, in Jaén alone there are about 350 co-ops and in Spain there are more than 1,900 olive mills. It's difficult to imagine that that many individuals are going to be able to get together to agree on prices. If anything, the problem lies at the other end. Six bottlers control 90% of the Spanish market. It's obviously alot easier for six to get together and agree on the maximum price they will pay for bulk olive oil than nearly 2,000 to do the same and fix a minimum. Each co-op director decides when and to whom he is going to sell according to his own criteria. In the end his responsibility is towards his members.

C.B.: Now that the new crop is on the verge of being delivered, do you have any predictions?

J.M.M.: Well, we believe we will end up milling more oil. That's almost certain. We're thinking that we'll end up processing about 22 million kilos of olives and producing maybe 4.7 million kilos of oil.

C.B.: And prices?

J.M.M.: That's a little more difficult. In general terms, we see them as following what took place in 2007. But, you never know. Bad weather could interfere with the harvest, for example. Prices are hard to predict.

C.B.: Thanks for your time, Manolo.

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Aceites Cazorla, S.C.A.
Crta. Peal-Cazorla, k.m. 10.5
Cazorla 23470
Jaén, Spain
Telephone: (34)953 724031
E-mail: cazorla@aceitescazorla.com
Web: http://www.aceitescazorla.com

Ana Fernández Arimany – Director-General, MFAO

2007-09-06T20:20:00.000+02:00

One of the most notable differences between the work cultures of Europe, Spain in this case, and North America falls under the general category of ‘labour mobility’. This is to say that the relative ease with which people move from opportunity to opportunity west of the Atlantic Ocean is countered by the very typical old world custom of getting your first job, hopefully with the government, and proceeding to stay there until retirement – with all that this might imply as to the flexibility of economies on this continent. Directly contrary to this stereotype, The Olive Oil Gazette presents to its readers the dynamic young woman who honoured us with an hour of conversation at her office at the olive oil futures market, MFAO, in Jaén last Wednesday.

Ana Fernández Arimany took on the role of Director General of the Sociedad Rectora del Mercado de Futuros del Aceite de Oliva in September of 2006 following a ten year long career in the stock futures market, in her home town of Madrid, that began as a telephone order clerk for market makers at the financial futures and options exchange, the MEFF. From there, she moved to institutional sales at Grupo Santander national banking subsidiary, Banesto, and finally, before assuming her present post, to that of sales manager at the brokerage house, Nordkapp.

The interview was conducted and edited by Charles Butler Mackay for The Olive Oil Gazette - The Spanish Olive Oil Industry News Source.

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C.B.: How did you get involved in the financial markets?

A.F.: Basically, it is because I’ve always liked numbers. When I was a child, I always thought I would end up being a mathematician so, having an affinity for business and the markets comes naturally to me.

C.B.: What is your educational background?

A.F.: I graduated with a combined degree in law and business.

C.B.: Law? Where does that come from?

A.F.: My father is a lawyer, so it’s in the family. But, more importantly, I knew that I was probably going to be taking more career risks than are normal, so I wanted to have something I could fall back on in the event that things didn’t work out as planned.

C.B.: And the MFAO? Managing a futures market in a small provincial capital probably did not figure in your original plans.

A.F.: No. Certainly not. It all came about from a very small ad I came across in a newspaper. I followed up on it only because it sounded interesting. The selection process was very slow, however, and in the meantime I had moved from Banesto to Nordkapp.

C.B.: That, in itself, was quite a change.

A.F.: Yes. But it appealed to me because working in a smaller brokerage you end up doing a bit of everything and learning it all. In the big houses, you end up with your specialty and that’s all.

C.B.: It must have been quite a shock, accustoming yourself to the world of olive oil.

A.F.: Yes, it took some getting used to. This is a very different business and culture than what I had come from.

C.B.: In what sense?

A.F.: I think that agricultural people are fundamentally different than financial types and it’s our task to convince them of the benefits of an innovation.

C.B.: Has the MFAO progressed during your period at the helm?

A.F.: I believe so. To this point we have seen more or less 20% more volume transacted than last year.

C.B.: Is the MFAO self-supporting financially?

A.F.: No. Not yet. But my personal goal is to have the exchange turn a profit soon, which will happen if we continue to grow at the current pace.

C.B.: Are the users of this market primarily nationals?

A.F.: As it stands, yes. But we have recently opened accounts for various Italian interests which have been active in the market. For us, it is fundamental that we sign on buyers and sellers from that country. They, after all, continue to be the big players in the commercialization of olive oil.

C.B.: I know a couple of American importers that are interested in participating, but the conditions for opening an account are not to their liking. Are you aware of any cases like this?

A.F.: Yes, I am. We are a new market and are only beginning to be of interest to the American brokerage houses. In the meantime, our customers currently have to operate through facilities provided by our shareholding banks. This, of course, requires the opening of a bank account in Spain in order to trade and this system has too many requirements for North American investors.

C.B.: I imagine that plans are being made to facilitate this process on the other side of the Atlantic.

A.F.: Yes. We are currently talking with the BBVA, which has various American subsidiaries and an extensive branch network in the U.S., to see if we can come up with some workable plan. We very much want to attract business from over there because of the very long experience they have with agricultural futures markets.

C.B.: Following the closing of the May 2007 contract, the MFAO sent a notice possibly expressing its displeasure at the very high level of open interest on delivery day. Can you comment on this?

A.F.: Sure. As it stands, market participants are holding for delivery around 25% of the total volume for any given contract. We would prefer that they use the MFAO as a hedging/price protection mechanism rather than a secondary cash market.

C.B.: What would you consider an acceptable level for deliveries?

A.F.: (firmly and with conviction) Ten percent.

C.B.: How are you going to accomplish this?

A.F.: By opening more accounts from the olive oil sector, teaching people how to use it, and attracting speculators to the market.

C.B.: Do you have any other goals for the near term?

A.F.: Yes. We would like to see more participation in the MFAO on the part of the Spanish olive oil co-operatives, seeing as they effectively control the production end of the equation here.

C.B.: I have to agree on that. Producers seem to have missed an opportunity to lock in a very good price between February and April of this year.

A.F.: That’s true. We are really just starting out and people from the olive oil sector do not yet know our market.

C.B.: I’ve noticed over the last few months a fairly large discrepancy between the cash price for olive oil, as published by PoolRed, and the futures prices. Can you explain this?

A.F.: That may stem from the slight difference between the contract specification and the measures used by PoolRed. We have just finished making some adjustments to the specs, taking effect on the March 2008 contract, that bring the two more in line. You can note that the recent upward movement in contracts dated from that month outward have brought the two figures closer together.

C.B.: I have heard various complaints from sellers of olive oil that the figure published by PoolRed is not representative of real cash prices, causing perhaps some confusion in the market. Is it a reasonable proxy for spot?

A.F.: It is and it isn’t. PoolRed calculates its quote on the basis of figures voluntarily provided by industry participants and then publishes a five-day, volume-weighted average as today’s price. In this sense, it is more useful as a tool to view the trend of prices, rather than a hard number.

C.B.: Among the first thing one notices, when looking at the contract price arrays, is that the distant months seem to trade at the same price as the nearby, at least in the same crop year. Why is there no financial calculation made for time by participants?

A.F.: That was exactly the same question I asked when I first got here. Why is there no carry? The answer was, basically, ‘Because there’s no carry’. And it’s as simple as that. The players are simply buying and selling at a price, thinking about the next crop and the carryover, and ignoring storage, interest and whatever. It’s just the way it is.

C.B.: What an opportunity that presents to an investor, being able to place your order as far out as you want and wait for the price to come to you – no contango, no roll.

A.F.: Sure it is.

C.B.: Your vision for the MFAO?

A.F.: That’s easy. That it stand on its own two feet.

C.B.: Thanks very much for your time.

______________________________

For further information about the olive oil futures market, contact:

MFAO
Calle Nogal, 62
23006 Jaén
Spain

Telephone: +34 953 24 52 50
Fax: +34 953 23 13 43
mfao@mfao.es
www.mfao.es

José Vico Lizana - Potosí 10, S.A.

2007-07-30T18:20:00.000+02:00

Among the winners of the annual Spanish Ministry of Agriculture olive oil awards, outstanding, in this publication's opinion, was the first prize in the taste category of ‘sweet green fruit’ presented to a cold-pressed extra virgin, by the name of Fuenroble, pressed entirely from picual olives in the province of Jaén. Both experience and handed-down wisdom would have it that this varietal, which comprises over 90% of the province's production, would never even be considered 'sweet', let alone make it on to any short list for an award as such. So, given the opportunity, The Olive Oil Gazette made the trip to Orcera in the sublimely beautiful Sierra de Segura to interview the man behind this accomplishment - José Vico Lizana, managing director of the press named Potosi 10, S.A.

Mr. Vico, a native of Úbeda (Jaén) and an agricultural engineer by training, has been the guiding force behind Potosí 10 since its inception in 1998, supervising not only the milling but also the actual olive plantations themselves. Under his mandate, this press has won thirteen national and international awards and it takes no more than a few minutes in his presence to find oneself seduced by his personal quest to produce the highest quality olive oil possible. Hopefully, the following excerpts from the two hours of conversation this writer enjoyed with him will have a similar effect on the reader.

The interview was conducted, translated and edited by Charles Butler Mackay for The Olive Oil Gazette - The Spanish Olive Oil Industry News Source.

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C.B.: Can you tell us a bit about your history with Potosí 10?

J.V.: I began working for the owners of this mill in 1987. The family had decided to reinvigorate the extensive but unproductive nineteenth century olive plantations they have in the area and they hired me, as an agricultural engineer, to supervise that project. At the root, we are farmers.

C.B.: Improve them? In what sense?

J.V.: In terms of the quality of the olive oil they produced because it was obvious to the owners that the only way to make these properties work economically was to produce a quality olive oil and bottle it and sell it themselves. The business of selling in bulk by the tanker load was just not viable.

C.B.: But the press wasn’t built yet.

J.V.: No. We began milling our olives through one of the local cooperatives. Unfortunately, we found out that the level of quality control there made it impossible to achieve our goals.

C.B.: Why would that be?

J.V.: Basically, the co-ops are not very strict in controlling the source of the olives that are brought in for harvest – meaning separating those collected from the ground from those harvested directly from the tree or distinguishing between zones of production. In the end they wind up mixing everything together, making it impossible to have any guarantee of quality, no matter how much care you took with your own.

C.B.: So, the challenge has been quality right from the beginning?

J.V.: That’s right. We grow our olives in areas that are right on the border between productive agricultural land and mountain. In areas that are more purely agricultural, with the same costs a grower can harvest several times the quantity of olives that we do. Mountainous zones are difficult and expensive to work because of the steep terrain and because the soil tends to be less fertile and more shallow. The trouble is the cost per tree in terms of care and maintenance is identical. Then you have to add to this the much greater harvesting expenses per kilo of oil produced.

C.B.: What is the average production of these properties?

J.V.: Irrigated trees give us an average of thirty kilos of olives per tree, the rest fourteen or fifteen.

Ed. note: The unirrigated trees belonging to this writer, by no means the most productive in the province, produce a yearly average of thirty kilos a year each.

C.B.: Are you saying that Potosí 10 only presses olives from the properties of its owners?

J.V.: More or less. About 80% come from our own groves and the remaining 20% via contracts we have with other growers.

C.B.: The terms of these agreements would have to be fairly strict, given your insistence on quality.

J.V.: The main conditions are that the grower must deliver the olives during the month of November, all the fruit must be collected from the tree, with none from the ground and it must be delivered on the day it is picked.

C.B.: Do you physically supervise the harvest, in these cases?

J.V.: Yes, we do.

C.B.: How does Potosí 10 determine the price that is paid to these growers?

J.V.: Well, in the same way that any other private, non-cooperative mill does – by percentage of oil extracted and a market price.

C.B.: But you must be paying something extra to compensate for the all the expenses you outlined above. How do you calculate that?

J.V.: We do, but it depends on a wide range of factors – weather damage, particularly. In general terms, we pay the January producer price plus an amount that wouldn’t be below 10% of that value. But I can’t give a precise figure because of all the factors that go into the calculation. The end result of all this is that we are forced to sell our olive oil bottled. Shipping it in tanker trucks does not cover our costs.

C.B.: Where did you get the name ‘Potosí 10’?

J.V.: As you probably know, Potosí, in Bolivia, was the source of much of the wealth in precious metals that Spain received from its American colonies. It is also a word that, according to the dictionary of the Royal Academy (which Mr. Vico pulls from the bookshelf), means ‘extraordinary richness’ – hence the Spanish expression ‘It’s worth a potosí’. We felt that it was an appropriate description of what we were trying to accomplish here.

C.B.: Was the project successful right from the beginning?

J.V.: No way! The first few years were disastrous.

C.B.: How do you mean?

J.V.: I mean we weren’t able to extract an extra virgin olive oil that met our quality requirements, speaking in terms of flavour characteristics. What we managed to produce was an oil that was not really distinguishable from any other produced from picual olives – very good in terms of health benefits, very resistant to oxidization but excessively spicy, bitter and strong-tasting. In the end, we were not able to successfully commercialize our oil at a price that took into account the costs involved.

C.B.: Obviously, you found a solution to the problem.

J.V.: Yes, we started to pick and mill our crop on the 2nd of November each year, rather than the traditional mid-December. By December 15th, the mill is closed.

Ed. note: The co-ops in Jaén province do not generally start up the presses until early December, and the grand part of deliveries are made after Christmas holidays. Virtually any olive grower in the region would characterize Potosí’s strategy as pure insanity.

C.B.: How did this novel idea occur to you?

J.V.: It’s not like we woke up one morning knowing that that was the solution to our problem. It was more a logical process. Fundamental is the fact that you cannot produce a quality olive oil if you are including olives that have previously fallen from the trees, and the situation that any grower encounters in January is exactly that – a certain significant percentage of the crop brought to the ground by winds and rain. Speaking of picual olives, the advantage they have is that they are among the easiest to harvest because of their weak physical attachment to the tree. The other side of the coin is that they fall of their own accord with great facility.

C.B.: Obviously, beginning so early has its disadvantages also.

J.V.: Yes. The first problem is the elevated water content of the olives at that time of year, and the consequent lowering of the percentage of oil they contain. Fruit picked in January in this area will give you an average water content of 43% and will produce 21 or 22% of its weight in oil. Taking out the approximately 3% that ends up emulsified, you end up with around 18 kilos of oil for every 100 kilos of olives. In early November, not only does the oil content fall to 14 or 15% and the water rise to 62%, but the percentage of unextractable oil reaches nearly 5%. The end result is a drop of nearly 50% in the quantity of oil it is possible to press from a given weight of olives.

C.B.: Are there any factors that mitigate this effect?

J.V.: First, it is more economical to harvest early. You get 100% of your crop from the tree and avoid the extra cost of picking it from the ground. Second, you lose fewer olives, or avoid the loss of quality that comes from infestation of the fruit with the larvae of insects or the arrival of freezing weather.

C.B.: This would be contrary to the general wisdom of the area that has it that it is best to wait until after the first cold weather reduces the water content of the fruit.

J.V.: Effectively, but the result is an olive oil that is only suitable for selling in bulk.

C.B.: Why do the co-ops not open earlier, if all this is true?

J.V.: Simply put, it does not interest them economically. Their costs are derived more from the weight of the olives milled than the amount of oil extracted. In effect, water content is their enemy. On top of this, there exist also physical difficulties in separating the water from the oil in immature fruit due to its internal structure.

C.B.: What would cause that?

J.V.: In immature fruit, the oil is contained in sacs located within what is known as the ‘olive water’. Later in the year, these sacs break down of their own accord as part of the natural evolution of the fruit, but in November the mill must physically break down this barrier in the crushing process, making it far more expensive and time consuming.

C.B.: Obviously, the end result in terms of the flavour characteristics of your olive oil has been outstanding. Can you elaborate on this?

J.V.: The most notable change, in the organoleptic sense, is that the bitter and spicy components of the flavour become much more balanced and bouquet becomes noticeably more elaborate if the olives are picked just as they are changing colour from green to black. Our changeover to these dates brought us immediate recognition when we won the 2005 Ministry of Agriculture prize in the Bitter Green Fruit category. We were the first from Jaén to ever achieve this and it gave us the boost we needed to continue with the project.

C.B.: But, hold on. Did you not receive the same award this year for the same olive oil in the ‘sweet’ category?

J.V.: This is what I mean when I say that our techniques result in a very balanced and flavourful product. The producer does not decide in which category the entry will be placed. We merely send our sample, with the required proofs of origin, and so on, to the sponsoring organization and the tasters themselves, in blind test conditions, decide to which class it will be allocated. Fuenroble is an olive oil with such a spectacular range of flavours that it has, alternately, been placed and won awards in two, usually mutually exclusive categories.

C.B.: Very impressive, José.

J.V.: Thank you. The surprise for us throughout the development of our olive oil was that its bitterness decreased as the olives were harvested less mature. It goes against the normal logic of a fruit sweetening as it ripens. But regardless, it was just as much a tremendous shock for us when we were awarded the ‘sweet’ prize this year. We would never have imagined. In the end it leaves us with the problem of how really to define the characteristics of the picual.

C.B.: Is there a manner in which you personally prefer to characterize the olive oils from Potosí 10?

J.V.: I like to think of the range of flavours in our products as if speaking of instruments in an orchestra. There’s a grand difference between listening to a trumpet playing its part by itself and another in its place in the symphony which is analogous to that of the flavour of an olive oil that is absolutely dominated by one aspect compared to another that is balanced.

C.B.: You really feel this in your heart and soul, don’t you?

J.V.: (laughs).

C.B.: Is there any specific process that you follow within the olive groves themselves that are distinct from the usual?

J.V.: One of the advantages to harvesting early is that we avoid much of the problem of weed growth and the attendant overuse of herbicides coinciding with the harvest. One treatment with a pre-emergent type is all we need.

C.B.: As to the use of pesticides?

J.V.: We are also able to eliminate a good part of those treatments by harvesting in November while absolutely eliminating the flavour consequences of there being insect larva contained in the olive.

Ed. note: One of the undesirable flavours that professional tasters categorize is translated to English as ‘worm’, and derives from the presence of insect larva in the originating crop.

C.B.: Does anyone think that Potosí 10 is manipulating the specific batches that are submitted to competitions?

J.V.: No! And it would be impossible in any regard. All of our oil is produced from picual olives harvested within the boundaries of the P.D.O. Sierra de Segura and certified as such by its regulating council.

C.B.: Do you think that the results you have achieved contain any message for the olive growers and oil producers of Jaén province?

J.V.: Absolutely. The picual has always been considered a bit of a substandard varietal with regards to the quality of the oil it produces. The result of this is that the grand part of the production is sold, at reduced prices, in bulk to bottlers primarily located in Italy. The oil is there blended, not just to mask its taste, but to impart its excellent storage life to the other varieties in the mix. The consequence of this is that growers seeking a superior product have turned to planting other types of varietals. Potosí 10 has shown that this not necessary. What is needed is a change in the growing and harvesting techniques typical of this province.

C.B.: Under what brand names does Potosí 10 market its olive oils?

J.V.: Our premier label is ‘Fuenroble’, which is named after one of our olive groves. We also sell another cold-pressed oil behind the label, ‘Odoliva’, and a series of flavoured oils under the name ‘Rumba’.

C.B.: Flavours?

J.V.: They are bottled with any of various aromatic plants from the region, such as rosemary, thyme, garlic, and so on.

C.B.: What other products do you derive from the olive?

J.V.: We now market a collection of personal care products under the labels ‘Herboliva’ and ‘Farmoliva’, depending on whether they are to be sold in stores or pharmacies. Aside from their value as creams and soaps, they have the added advantage of imparting many of the health benefits of olive oil, but through absorption by the skin.

C.B.: What products do you offer?

J.V.: Currently we have seven on the market. They are: a lip balm, a skin cream that is 47% olive oil, an after sun lotion, a shaving cream, a body milk, a shower gel and an exfoliant whose abrasive component is ground olive pits.

C.B.: What distinguishes your products from the many similar on the market?

J.V.: That’s easy. The large part of ‘olive oil’ cosmetic products on the market ‘contain’ olive oil, be it 1 %. Ours are made from olive oil.

C.B.: How are sales?

J.V.: Fantastic! These products are what put our business over the top. One of our important markets right now is South Korea. As far as we are concerned, the future of the olive oil business lies in products of this type more than it does in the oil itself.

C.B.: Why is that?

J.V.: As we see it, the task of requiring that the consumer be able to differentiate sufficiently between qualities and varieties of olive oil to make the more expensive production of excellent oils truly profitable is too large.

C.B.: But that might be more typical of the Spanish consumer, no?

J.V.: Yes. I am referring to sales inside of Spain where the product is used daily and price is more important than flavour quality.

C.B.: I noticed a number of very sophisticated looking machines in your laboratory. Can you give us an idea of how technology has aided Potosí in overcoming the challenges faced?

J.V.: For us, modern technology is fundamental. For example, by using a near infrared spectrometer programmed with the desired characteristics of acidity, peroxide content, and so on, we can know with certainty which quality of oil we are going to get from a given trailer load of olives. We take a sample, pass it through the machine, and in fifteen minutes we know which batch that load will be part of. We have the oil pressed, stored and categorized within three or four hours of the arrival of the tractor from the groves.

C.B.: With obvious results.

J.V.: That’s right. Year in, year out, over 90% of the olive oil we produce is classified as extra virgin by the P.D.O. - a figure far in excess of that of any other mill and one that can’t be achieved without rigorous controls in place throughout the process.

C.B.: Thanks very much, José.

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Fuenroble cold-pressed, extra virgin olive oil, along with the company’s other brands, Odoliva and Rumba, and its Farmoliva and Herboliva line of skin care products are all produced by Potosí 10, S.A., Carretera de Hornos, s/n, Orcera (Jaén) 23370. Their website can be accessed at www.potosi10.com.