At dawn, the grass is still covered with frost as men carrying long poles circle a tree, their breath forming small clouds. A diesel engine of a tractor is fired up and, as its mechanical arm begins to vibrate the tree trunk, the men begin to beat the branches with their poles. A shower of small spheres fills the air, falling on the netting spread beneath the tree.

It is olive harvest time in Andalusia, the region of Spain that accounts for 80 percent of the country’s olive production. Overall, Spain accounts for almost 45 percent of the world’s olives. “We are where we have to be—in the middle of the world’s crop,” said Alvaro Díaz de Lope, who is general manager of the joint venture called Mercaóleo. Cargill is a 50-50 partner with Hojiblanca, a cooperative representing 50,000 Spanish olive farmers.

Joining artisan tradition with world-class technology
and skills

Cargill and its cooperative partner, Hojiblanca, want to bring together the romance and artisan tradition of olive oil with world-class scale, technology and skills—a combination designed to deliver an extraordinary, high-value product to a wider global audience. Specifically, the joint venture will concentrate on private-label bottling for some of the major names in the retail food and foodservice industries all over the world.

The Mercaóleo joint venture includes investment of €18 million in a new oil bottling plant at Angequera, near Malaga in addition to the working capital required to operate at full capacity.

“If you ask a farmer what is the best olive oil in the world, he will say, ‘Why, the olive oil that comes from my farm,’” said Díaz de Lope. “That is not just ego. People grow up with the olive oil in their district, and they get accustomed to the flavor.”

“The joint venture gives us a much deeper personal connection with Spanish farmers—the agricultural end of the supply chain,” explained Díaz de Lope as he watched the harvest. “We have to be in the fields to see how the crop is doing and taste the oil. Physically, you have to be here.”

From tree to table - Creating a global olive oil supply chain

Adela Ortega, general manager of Cargill refined oils in Spain recognizes the opportunity. “Creating a global supply chain—from tree to table—will require a lot of finesse in commercializing what has been an artisan industry,” she said. “We are combining the care and traditions of the olive farmers of Andalusia with Cargill’s reputation for quality, food safety, risk management and marketing. It is the best of both worlds. “From start to finish, we have a story that nobody else can tell. So far, people have been very receptive to this story.”

Antonio Luque, Hojiblanca’s general manager, agrees. “Thousands of families are depending on this joint venture, so the relationship between the partners is very important,” he said. “We have a strong belief that our future is going to be improved because of the relationship with Cargill. This is a combination of two families for the benefit of us all.”