Sovena captures U.S. olive-oil lead

ROME — Our Neolithic ancestors enjoyed olives 10,000 years ago. After the deluge, a dove returned to Noah’s ark with an olive branch, a symbol of life. The Israelites, during their 40-year sojourn in the desert, used pure olive oil in the mishkan (portable-tabernacle) service and later both in the Temple service and in anointing kings. The goddess Athena brought the olive to Greece as a gift, which was useful for light, heat, food, medicine, and perfume. Olives and olive oil have a long, rich heritage that started before humans even developed language.

While the olive tree is native to Asia Minor, and 95 percent of the world’s production originates in the Mediterranean region, consumption of olive oil is worldwide. In the United States, Sovena USA, headquartered in Rome, has captured the lead as the largest importer of olive oil in North America. With 11 percent of the total market share, the company is riding a growth wave as Americans and Canadians consume more olive oil in their diet. According to the North American Olive Oil Association, “… household penetration [in the U.S.] of olive oil has grown from about 30 percent five years ago to more than 50 percent today.”

“The statistics are really interesting,” says Brett A. Milligan, the CEO of Sovena USA. “On a per-capita basis, the Greeks consume olive oil at the rate of about 24 liters per-person every year. Spain and Italy average about 15 and 13 liters [respectively]. In North America, average consumption is only about one liter, but the U.S. market is so large that it represents the third largest in the world, buying 9 percent of total production.” The growth in North American olive-oil consumption is illustrated by figures shared in a video by Stephen M. Mandia, Sovena USA’s chairman of the board: “In 1991, the U.S. [olive-oil] market imported 50,000 metric tons; today we import nearly 300,000 metric tons.” Milligan adds that “U.S. consumption grew 5.6 percent just since last year.”

Sovena USA launched its American operations in 2005 when it bought an 80 percent share of the East Coast Olive Co., located in Utica and owned by Mandia. The company bought the remaining 20 percent share in 2010. In 2007, Sovena built a new, state-of-the-art packaging and distribution plant at Griffiss Park, adding additions in 2009 and 2012.

The plant, which sits on 32 acres, currently includes 195,000 square feet and contains 70 giant storage tanks, finished inventory, multiple packaging and labeling lines, offices, and a blow-molding, bottle-manufacturing facility. (The bottle-making operation is owned by Logoplaste, an international company that pioneered in-house manufacturing of plastic bottles for companies such as Coca-Cola, Heinz, Nestle, and Johnson & Johnson. Logoplaste produces 34 different containers for Sovena USA.)

“The plant is fed by five railroad lines, which deliver, on average, seven tank cars per-day,” says Steven Paul Barnes, Sr., the plant manager. Each railroad car holds 24,000 gallons of oil. “Sovena runs two, 10-hour shifts four days a week, and Logoplaste runs three shifts a day, six days a week. Sovena employs 10 just to maintain the equipment in the plant.”

“The Rome plant employs about 170 [workers] of Sovena and another 40 to 50 for Logoplaste,” adds Milligan … “Sovena’s North American sales are now $250 million annually … This facility handles about 100 million liters of [olive, corn, soybean, grape] oil annually, [which translates into] 6 million cases. This makes us the largest bulk-importer and packager of high-quality olive oil in North America.”

Sovena USA is part of the Sovena Group, a privately owned company headquartered in Lisbon, Portugal, which employs 1,200. “In 2012, the Sovena Group became the largest grower of olives in the world and is now the largest olive-oil company in the world,” says Milligan. “The Sovena Group produces 6 percent of the world’s olive-– oil …

“The company controls all of the steps from growing and processing the olives to shipping, packaging, and distributing them … Our North American customers include retail chains, where we supply over 60 percent of the U.S. private-label business; food-service businesses; and very large industrial accounts like bakeries, cookie manufacturers, and salad-dressing companies … We sell both direct and through distributors,” notes Milligan.

“Our business plan is straightforward,” says Milligan. “As our logo [states], we produce ‘olive oil for the world.’ We buy our olives from many countries like Spain, Italy, Greece, Tunisia, and Morocco. In the winter months, we can even buy olives from Australia, New Zealand, South Africa, and several South American countries. The olives are processed in Europe and the oil is shipped to our New Jersey terminal, either for storage or for immediate trans-shipment to Rome [NY]. We control the process from tree to bottle. Sovena USA has another advantage because many of its competitors are not located in the U.S. We also customize our products for the customer.” Barnes, the plant manager, adds that “Sovena USA offers such a wide variety of products that its customers [benefit from] one-stop shopping.”

“The oils are stored by origin [country] and by grade [type],” notes Milligan. “Because we package the product here in the U.S., we only need to keep an eight-day supply instead of an eight-week inventory to allow enough lead time to receive packaged goods from Europe. This means we don’t have to tie up a lot of money in inventory.” Barnes says that the company keeps 20 days of inventory on hand in case of emergencies.

There’s more to making olive oil than crushing olives, bottling, the liquid, and distributing the oil. “This is a very technical business,” says Gabriel (Gabi) Estevez,” who holds a Ph.D. in refining olive oil and serves as Sovena USA’s chief operating officer. A native of Seville, Spain, Estevez has been employed at Sovena for 13 years, seven in the U.S.

“My job is to oversee the procurement process of olive oil [designated for Sovena USA],” continues Estevez … “We have teams in Spain and Portugal who help me to select the best olive-oil lots before receiving them … When I came [to America], I had to develop a customer portfolio of U.S. preferences … I grew up in Seville, where the [extra-virgin] olive oil is bolder, more pungent (peppery), and more flavorful. Americans like a milder [version], so I need to blend oils to the correct profile.” The blending to Estevez’s specifications can occur overseas or locally at the Rome plant.

“I have a panel-testing group of six to eight [employees] to help me get the [proper] blend. The results [of the panel tastings] are interpreted by the group. I train each member of the team here at our test laboratory, which is the only IOC- (International Olive Council) approved, analytical lab in the country,” says Estevez.

Milligan, 52, says he was “always in the food business. My father was the president of a Unilever food company. I have spent more than 30 years, starting in 1984 with the Mario Olive Co. of Omaha, then moving in 1993 to the Lindsay Olive Co. (in Detroit and Chicago, now a trademark of Bell-Carter Foods, Inc.), Torbitt & Castleman Co. in 1998 (a private-label food manufacturer in Louisville specializing in barbecue sauce, table syrups, and jams and jellies, bought by Ralcorp in 2000), and then Torbitt Dry Products division in Sheboygan, Wisc. My next move, in 2003, was to the A. Camacho Co. in Tampa, a global leader in Spanish olives. I became the CEO of Mario Camacho Foods, a merger between the Mario Olive Co. and A. Camacho, Inc. until July 2012 when Steve Mandia convinced me to join Sovena USA.” Milligan has been married for 24 years to his wife, Amy. The couple has three, teenage daughters.

“The U.S. is a huge market for olive oil,” says Milligan. “Consumption of olive oil here continues to rise as the consumption of vegetable oil declines. The potential to increase the [per-capita] consumption is substantial. Sovena USA is in a great position to increase its market share and dominate what is a fractured market.”

As America discovers the gift of Athena, the future for Sovena USA is indeed bright.

Contact Poltenson at npoltenson@cnybj.com