Holmes' oil firm surviving in spite of hard times

Paul Holmes with his brand of New Zealand grown and produced olive oil. Photo / Supplied

Last year was a challenging one for the brand and for the whole food industry, but we're surviving through difficult times, Paul Holmes says.

"I've learned everything the hard way. I was so naive. I thought I'd try a little exporting so off I went to China. You have to have the critical mass to really work a market like that. You can't do it by turning up once a year with a suitcase.

"I don't think there is any doubt that people have less disposable income now than they had a year or 18 months ago. It's been a challenging year to be perfectly honest. The food business is a very difficult business. You have to constantly keep at it. You have to constantly keep pushing."

The New Zealand olive oil industry will never be able to compete with European or even Australian production despite producing premium harvests, Holmes says.

The amount of extra virgin oil olive Spain, Italy, Greece and other countries in Europe produce could stock the world, he says.

His brand, Paul Holmes Olive Oil, produced through NZ Premium Foods of which he is a director and 40 per cent shareholder, sells about 3000 litres a year.

It's a modest production compared with that of his competitors.

"Back when we were planting our trees, the Australians were planting hundreds of thousands of acres. I spoke to a guy from Australia and he showed me pictures of an olive grove he represents and the trees went to the horizon."

Holmes says he and his business partner, Rachel Speedy, plan to diversify into vinegars and other products.

Even though the business is small, Holmes says volume is core to the health of the company and brand.

"I don't particularly want to be a boutique brand because that's not going to work. Volume is everything. When margins are slim, as they are in the food business, you've got to be doing volumes.

"That's our aim at the moment in New Zealand. The olive oil category in supermarkets is a very substantial revenue generator. New Zealanders in supermarkets alone spend over $30 million a year on olive oil, which is why we decided exporting is too hard for us at the moment. We simply don't have the financial clout."

Holmes says there is plenty of room for all New Zealand growers in the domestic market if "we get our price structures right".

He says the main reason competing with the European brands is so hard is because they get millions of euros in agriculture subsidies that allow them to produce oil much cheaper than New Zealand brands can.

"We've had to realise in the olive industry that we've really got to be more competitive price-wise. In the end price does matter. New Zealand olive oil is always going to be a bit of the premium end. At the same time it is a very beautiful product."

Holmes sells the olives to NZ Premium Foods. The olives are grown, pressed and bottled in the Hawkes Bay.