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

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

SPEAKER_01: 0:00

Such a key species in the Mediterranean, a region hit hard by climate change and political unrest, and we don't talk about it very often, the olive tree. Extremely high quality olive oil could almost be called a medicine, but most of the industry has commodified and is only looking for the bare minimum quality and the lowest price. How do we decommodify this crucial crop and pay farmers for quality? And what can we learn here and apply elsewhere on other key crops in other regions? Welcome to another episode of investors, big and small, and consumers start paying much more attention to the dirt slash soil underneath our feet. In March last year, we launched our membership community to make it easy for fans to support our work. And so many of you have joined as a member. We've launched different types of benefits, exclusive content, Q&A webinars with former guests, Ask Me Anything sessions, plus so much more to come in the future. For more information on the different tiers, benefits and how to become a member, check gumroad.com slash investingbridgeandegg or find the link below. Thank you. Welcome to another episode, today about olive oil. Good extra virgin olive oil is a superfood, but good fresh oil is very hard to find. So my guest of today started Amphora, who helps customers to get their healthy, nutritious oil they need when they need it. They work with their farmers to grow their businesses and preserve their communities, and they source their oils straight from small, family-run producers in Greece, who are too small to access the export markets by themselves. And they deliver it directly to your kitchen. In zero waste, reusable containers. There's so much to unpack them. Welcome, Erov. Thank you very much. And you don't have an olive oil background. You don't have a very Greek name. So how did you end up selling basically direct-to-consumer extra virgin olive oil?

SPEAKER_00: 2:17

Well, I'm not Greek, as you say. I'm actually originally from Wales in the UK, but I married a Greek. My wife is from a very small village community in the northern part of Greece in Ipirus. And that was really the start of everything. When I went to visit that village in 2003, I think, It basically was a revelation for me. Everything that we were eating was from there. It was the epitome of local and seasonal. The vegetables were grown on the other side of the valley by my mother-in-law. The other vegetables were foraged. And everything came with this olive oil. which they make themselves as well. And it was A, unutterably delicious. And B, there was just something so meaningful about it. There was just something so wonderful about having everything, knowing exactly where it's from and everything just being utterly untouched. Just incredibly natural. And that's how I started getting into this. But it took me about more than 20 years from that point for actually to start Amphora. I was working in finance as a portfolio manager. And at a certain point, I just thought to myself, I've got to try this before I drop dead. I had this idea. So I actually, I was unemployed for a while. We were living in London. After I came back from the village, I went to these shops and I could see these incredibly expensive olive oils. And then the next time I went to the village, I went to see Uncle Yanis. And I said, Yanis, have you seen the prices of olive oil? And he goes, oh, it's very hard for us. You know, we don't get those prices. And I say, but you should. I mean, the markup is insane. And they said, yeah, we just get five euros a kilo for a rollover. I said, I'll pay six. And I took 70 liters back to London. I put it in these sort of tasteful little bottles. I found a little shop around the corner, a wine shop, sold out immediately. It was a great business. But it didn't seem to me very scalable. And I was earning a salary or was about to earn a salary as a portfolio manager. So I kept doing it in the background and sold some products to friends and colleagues. But to do it big scale, I felt there wasn't the distribution. There wasn't the ability to leverage distribution. I would have to hire lots of salespeople. I would have to have a huge amount of infrastructure in order to be able to make this into a real business. But really what happened since then is that we have the internet. We have companies like Airbnb. We have these long tail business models. And it struck me that matching a customer to a farmer was going to be wonderful for both of them. And all they needed was to have someone to do it for them. And that's really how I got into Amphra. That was the start.

SPEAKER_01: 5:47

So thank you so much for that. And I mean, there's so much to unpack there, but let's start with the markup. Let's simply, let's say that London shop where you went to when you came back from the trip in Greece, an expensive bottle of oil, olive oil, because I think most people have no clue how it gets so expensive and what the farmer actually gets. Because you say five euros a kilo, what does it even mean in oil? What does it mean for the farmer? Let's unpack a bit the economics currently for olive oil.

SPEAKER_00: 6:11

Well, in fact, as I later found out, five euros a kilo is a really good price for it to So the way a liter of olive oil gets to an end customer, obviously, it comes from the farmer. The farmer, however, typically doesn't have their own olive mill. So they take it to the communal mill. And then you have to pay the mill guy. A lot of farmers take the product back themselves for their own use or to give to friends and relations or to sell themselves.

SPEAKER_01: 6:46

So that five euros a kilo is for like olives that haven't been pressed yet?

SPEAKER_00: 6:50

No, no. This is the price that farmers will get from, they don't get five euros a kilo. They're going to be getting something like 150 to 250. There's actually a spot price for olive oil at the moment in the market, a bulk price that It's a commodity that you could trade like frozen orange juice or pork bellies. And the price in Crete, where a lot of our farmers is currently around three euros, 10 per kilo. And that's as recording in February. That's not necessarily what the farmer gets. The farmers are very, they're generally family farmers. They have small production. They don't have a lot of market power. The market power belongs in the brokers in the cities, something like Iraklion or Chania. And then they will buy the olive oil from the mill or from the farmer. And then that gets sold into the food system. And it gets sold to blenders or to agri businesses or to brands themselves and then they get stored they get blended it gets traded and eventually it'll find itself find its way after some period of storage it goes into a container such as a 5-litre can or typically a half-litre bottle, it then finds its way to a warehouse at the retailer, or in our case, it goes to what we call a Grossist, which is one of the companies like Trans Gourmet here in Switzerland that sell directly to restaurants. So there's just five or six different levels.

SPEAKER_01: 8:36

And then what would a bottle cost? Like half a litre then, what would it cost? So

SPEAKER_00: 8:40

in a supermarket in Switzerland, you're looking at something like a price of 12 or 13 francs a litre, which is the same as US dollars. That's the average price for olive oil in a supermarket context. And for a restaurant, which is what we generally sell to, the price can vary between$8 a litre up to around$15.

SPEAKER_01: 9:05

And I'm scared to ask, what's the quality of this oil?

SPEAKER_00: 9:09

That's the problem. The quality just gets worse with every step. The product which comes out of the mill from the farmer is this pristine, extra virgin product which is huge and hugely high in polyphenols and it's fresh I don't know if you've ever seen fresh olive oil but it has this amazing fluorescent green color it's one of the most the smell is incredible it's just a beautiful thing and At each step, it gets diluted. It gets mixed with other farmers' products. Sometimes it'll be stored in these tanks in southern Italy with olive oil from the previous harvests. And so you lose all the terroir. You lose everything that made that oil unique. And to be honest, it's a terrible industry. I mean, this is not what consumers want. It's how the industry has sort of evolved to fit the current food system. And all of these brands like Bertolli or Colavita or Monini, they all try to get olive oil which tastes the same way year and also was cheap enough for them to make a margin on in the face of these supermarkets who were charging them vast marketing fees. And so they would blend it with inferior grades from Spain or from Tunisia just so it met the conditions for it to be extra virgin and wasn't better than that

SPEAKER_01: 10:49

and just for us dummies what are the conditions for extra virgin it has to do with acidity i think right or what are the conditions and of course there's a range and continuum as always

SPEAKER_00: 10:59

yeah so to be extra virgin you have to have what's called free fatty acid content of 0.8 percent or less that's not acidity per se this doesn't like citric acid or hydrochloric acid it's a measure of the fruit quality at pressing.

SPEAKER_01: 11:15

So it's 0.8? 0.8

SPEAKER_00: 11:17

or below. And then it also has to pass the number of taste tests. So it can't have any taste defects. And then there are a bunch of other conditions to do with things like peroxide values or wax content, but they're not particularly important. But the olive oil that comes out of one of our farmers has a free fatty acidity of 0.3 or 0.2. 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. That's why it's one of the very interesting things that if you look at the statistics of production, Something like there's a lot more extra virgin olive oil sold than is produced.

SPEAKER_01: 12:08

Which means there's some really good quality produced, which is mixed up with others, blended to get to 0.8 or 0.79.

SPEAKER_00: 12:16

Yeah, for sure. This is not what people want. People want to have the real stuff.

SPEAKER_01: 12:21

So how did you go from that realization? And of course, you're selling 70 liters here and 70 liters there. And imagining that you could actually not take on this challenge. because you had to hire a lot of people then you saw the internet or you saw this potentially long tail distribution way but it's still a very long step to then say okay i'm going to do this

SPEAKER_00: 12:42

well i knew that there was demand for it because of the experience that me and my wife have had with our friends you take a three liter tin of olive oil and you say and our friends would say could you have any more of that wonderful olive oil and we'd say yes we have a three I'm

SPEAKER_01: 13:06

laughing because we're doing a bit the same with some olive oil from friends in southern Italy, and we're selling only five liters. And it was... A lot of convincing, but after the first year, I think you're going to say exactly the same. People get used to it and suddenly it's like, can we order two? Yes. Well, of course we finish it in a year.

SPEAKER_00: 13:24

Having a really good, high quality, extra virgin olive oil in vast quantities in your kitchen changes the way you cook forever. Once you've done it, it's very, very hard to go back. And it's very, very hard to go back to the supermarket oil that you used before. I mean, our company is three years old. And all of the big restaurants, all the restaurant clients that were taking our product on a regular basis, they're still with us. 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. And so I know, I knew that there was this demand. We'd done the testing for it. And so for me, it hasn't really been that high demand. risk venture because I had that background. What actually happened to us is that we started trying to sell direct to consumer on a B2C basis. And that actually turns out to be a lot harder than we thought. There's a lot of money that you have to spend that we didn't have on the digital side. And one of the things that customers don't If you haven't used very high quality olive oil before, to be confronted with a three or five liter container is off-putting. You need to be able to taste it. So there was something offline we needed to add to the online experience. And we were struggling with that a little bit. But then we started selling to restaurants. At the same time, more of a sort of a side hustle. This actually started taking over. And now three years after we started the business, something like 90% of our volume is B2B selling to restaurants.

SPEAKER_01: 16:23

And are they very different in a sense that they, are they also a nice channel? And maybe the answer is no, because 90% goes to the restaurants, but do their customers, the end customer on their table ends up seeing your name as well? Or a

SPEAKER_00: 16:36

lot of the time they do, see our bottles we have some relatively nicely designed bottles that we use and very often the restaurants more and more one of the trends in restaurants is listing your ingredients And so we have a couple of restaurants that put us on the menu and say olive oil from Amphora. In Switzerland, you have to put the origin of your meat, the country of origin. But now they're sticking their stickness at the bottom of the menu saying, you know, meat from a chicken from Switzerland, olive oil by Amphora. Which helps. Yeah, it does. It does. For us, though, the real, I mean, we started off trying to be very digital and very direct to consumer. But what's actually happened is that we've become more boots on the ground. We have a small sales force with three amazing sales dudes. And what we do is we go to restaurants. We have 10 farmers on the platform now with 14 different olive oils. We take four or five with us. The chef or patron of the restaurant sits there, or both of them, sit there and taste it. They discuss it between each other. We're all And then they

SPEAKER_01: 18:00

keep being, do they stay then with that farmer? Because you mentioned before that relationship between the restaurant and the farmer, they become intertwined.

SPEAKER_00: 18:23

What they realize at these tastings, Kuhn, is that olive oil, it's like wine. There are so many different flavors. There are so many different characteristics from the country, from the region, from the soil, from the way that the farmers create their olive oil, the methods of cultivation. And so there's a moment in their eyes when they taste a real fresh extra virgin olive oil. olive oil from the latest harvest they haven't had that before and then the other moment which is very nice is when they it's a bit like a dating app is when they find their olive oil and that's the one that they use that's the one that they stick with

SPEAKER_01: 19:08

and are they okay with that because the flavor just like in wine can be different in different years like do they stick with that flavor even if it changes because climate was different that year or they will move with do they get updates as well from the farmer like do Do they live through the season somehow? Is it something you facilitate or they know, okay, now in January, the new oil is coming and it's...

SPEAKER_00: 19:32

Chefs tend to be very busy. Once they have a product which they like and trust, they don't spend any more brain time on it. And so, you know, chefs take a, if it isn't broken, don't fix it type attitude.

SPEAKER_01: 19:46

And for them, like the price... How is the price different from what they maybe get at a, I think a wholesaler or whatever they got their oil from before? Is the price an issue or is that also, is it actually because you cut away all these decommodified processes in the middle, is that approachable for them or do they have to be, okay, this is like a very interesting wine, but there's also an interesting price tag.

SPEAKER_00: 20:09

This is the core of our business model. And this is the core of the innovation that we've discovered. I think that if you cut out all All of these different levels, each of those different levels are earning a 30% gross margin. Basically, that's the minimum for these companies to work. And to take away all that value extracted by the food chain and the ecosystem and to share it between the customer and the farmer is and obviously for ourselves a little bit. This is the innovation. This is what we're doing, which is completely different. And so the beauty of our model is that we can pay our farmers two times what they can get in the market. So our prices for farmers vary between$4.50 per kilo to$7.50 per kilo. And that depends on the polyphenol content, the nutrient density, the acidities, and how regenerative that farmer is. Does he use pesticides? Does he use synthetic fertilizers? Does he use herbicides? Does he keep lovely ground cover? Has he got a fully biodiverse olive grove? So the farmers are incredibly pleased. And then the price point that we can offer to our customers is It starts at$10 a liter. And that's typically what they're paying. Sometimes they're paying a little bit less, but we offer a 10 times better quality. That's why we've had so much success. That's why we've been working in Zurich for one year so far. The market size in Zurich for B2B olive oil, we think, is around$25 to$30 million. In that one year, half of which was... taken up with the pandemic and restaurants were closed.

SPEAKER_01: 22:26

Not the easiest year for restaurants.

SPEAKER_00: 22:29

We still made what we gained 1% market share. And that's with an understaffed sales team. That's with the pandemic when the restaurants are closed and all the chefs are terrified that they're going to have to shut their restaurants. The last thing they want to do is take on new ingredient vendors. Of course. So once you get into this business and once those restaurants see the pricing and the quality, it's pretty compelling.

SPEAKER_01: 22:55

And how does it arrive to them? Because I mentioned in the intro, zero waste reusable containers. Let's spend a bit of time on that. It's not going to arrive in half a liter bottles, I think.

SPEAKER_00: 23:05

No, no, no, no, no, no, no. So we buy in bulk and deliver in bulk. So our first iteration was as a B2C direct to consumer company. And we use these stainless steel containers of three liters and five liters. And they're quite expensive. And we would refill them, we would come to your house, we still do this with many of our B2C customers, we come to the house, and then we refill those containers. So you don't need, you know, a five liter container is 10 glass, half liter bottles that don't need to be created, which uses up tons of resources, or recycled. Dirty secret, Kuhn, did you know that when you recycle a glass bottle, it doesn't actually go back into other glass bottles? Only 20% of it does. Most of it becomes building material. It's down-cycled.

UNKNOWN: 24:00

Anyway.

SPEAKER_00: 24:00

But when we got into our B2B business, they want big volume. And so we deliver to our customers on the B2B side, a 17 liter tin plate container with a pump. And that tin plate container, unfortunately, we cannot reuse. It needs to be recycled. The good thing about recycling metal is that it can go back into metal. We're actually sort of working on trying to find a solution for that to make a fully reusable container but right now we're just trying to keep up with with demand and also dealing with all the farmers that are trying to get onto our platform

SPEAKER_01: 24:42

and speaking more about it what's There's been the growth on the farmer side. I mean, I know the issues in Italy around abandoned olive groves, about the economics that if you're too small, like I mentioned in the intro, you just don't have access to export to the interesting markets. You're completely left to the brokers, which are not in your interest. And how has been the impact of them working with you in this venture, apart from the much better price? Like what's the effect that you see that these prices have on these communities and on the farmers?

SPEAKER_00: 25:13

The effect can be very big. And a lot of our farmers have started small and have actually, since they've been on our platform, they've massively expanded the number of trees they have under management. We have a farmer in northern Crete, a place called Tuoloti, Yorgos, great guy. The year after he started on our platform, he told me that he's going to get rid of his restaurant and become a full-time olive farmer, which sort of freaked me out, to be honest. Because now you're responsible for him, yeah. Yeah, we visit them every year. We visit our farmers every year and we stay in touch with them and we tell them everything that's going on and who's using their product. And I think they appreciate that. And he's become a full-time olive farmer. He's tripled the number of trees that he has. His neighbors are often generally older people. They come to him and say, Yorgos, I'm too old to look after my trees. Please, can you take them and look after them for me? And you can use the oil. It's all right. I just need to know that they're being looked after. And he has to send them away now. And so it's been transformative for our farmers. they become so much more involved and they start attending seminars and start studying agronomy. And they become as interested in, we are, this is a regenerative agriculture podcast, we should probably talk about-

SPEAKER_01: 26:46

It's going to be my next question, yeah.

SPEAKER_00: 26:48

Yeah. They become so much more interested in going back to what olive farming used to be before the sort of extractive agricultural revolution. And they drop the pesticides, they drop the synthetic fertilizers.

SPEAKER_01: 27:06

Because is that clear connection also there in olive oil between, let's say, the manufacturing management practices on the ground because you mentioned very specifically we pay for basically quality we pay for this and this levels we the price ranges depending on the quality have you seen that super clear connection or not super clear or so clear connection between soil and quality of the olive oil

SPEAKER_00: 27:29

i would like to say yes it's still quite early We've been around for three years now. So this will be our fourth harvest. And the farmers who have been with us for a while, they have gone more regenerative. But each year can be different. So the way we measure nutrient density in olive oil is through polyphenol content. That does... I'd like to say there was a very clear trend, but we didn't really measure polyphenol content in the first year. But there's a secret sort of level of olive oil. There's a secret beyond extra virgin. There's actually a designation of olive oil that's very underused by the industry, which is called high polyphenol olive oil. This is under a 2012 sort of European commission or European law passed by parliament, which allows olive oil bottles to contain a health claim on the back of it. And to qualify for that, to be high polyphenol olive oil, you can't, listeners can't see me doing my air quotes.

SPEAKER_01: 28:45

Quote unquote, yeah.

SPEAKER_00: 28:47

Yeah. And to get that, you have to have polyphenol levels of above 250. milligrams per kilo. And so last year was the first year we made it obligatory for all of our farmers to do that polyphenol test. And I think 13 out of our 14 oils turned out to be high polyphenol. The top polyphenol level for one of our oils was 780 milligrams. kilo now i have heard of other farmers and other olive oils having levels of a thousand plus

SPEAKER_01: 29:26

can we get in that food as medicine range then or what's the the more the better in this case

SPEAKER_00: 29:32

yeah oh yeah for sure the more the better the more the better those are the downsides of high polyphenols which can you can have an association with a more bitter taste And so it's a balance. Our restaurateurs, they sometimes get very frightened of having very bitter olive oils. But we try to have sort of maximized polyphenol levels while also having sort of crowd-pleasing taste profiles.

SPEAKER_01: 29:58

Flavor, yeah. But the flavor, I mean, the flavor profile has changed in olive oil as well because extra virgin wasn't there too much. I mean, it wasn't harvested on the tree. So the flavor profile, I mean, changes over time it's not that but of course you don't want to scare your guests away because of of a super bitter flavor even though it's uh it might be i mean made of yourselves as medicine people are accept certain flavors but

SPEAKER_00: 30:24

yeah i mean there are olive oils so many of our restaurants are now taking different olive oils so one of them will take an olive oil to cook with and then another will take another olive oil in our range for maybe the salad bar and there you can have a higher end more polyphenol-rich, bitterer olive oil. But to go back to your original question, we think we will see from farmers... where we're measuring nutrient density consistently, higher polyphenol levels over time. But then again, each year is going to be very different. You're going to have to do rolling averages basically to see the trend.

SPEAKER_01: 31:09

And so what is exciting, let's say on the agronomy part or on the land part, how would you like, when it's saying, how would you like to see the land change? But bring us to a, because obviously we're an audio, so a visual tour of, of an olive grove that of one of your farmers that you're out of? And then let's also think, okay, what could be improved there? Or what could be complexified, etc, etc? What is out there in the future to bring more regenerative practices to these groves?

SPEAKER_00: 31:35

So you have to look at the olive oil industry as a whole. Most olive oil doesn't need a lot of inputs. There has been a fashion in the past for farmers to reduce ground cover, and to basically plow up everything. And so if you're driving through the Mediterranean, sometimes you'll see some olive groves which are green between the trees which are grass and sometimes you'll see other olive groves with where the ground cover has been removed you just see the soil underneath we're very much pro-green for us the ideal olive grove is this wonderful biodiverse sort of plot It'll change color during the year. And during winter and spring, it'll be extremely green. It'll be sort of more yellow and brown, but it'll have a lot of shrubs. It'll have a lot of herbs, sage and oregano and thyme. It'll be interspersed with different tree species. And when you see a lot of our farmers are very old, they have very old growth trees. One of our farmers in northern Greece, he claims that his trees are planted in the era of Emperor Justinian. But his family don't actually believe that, and they all laugh at him when he says that. But anyway... Olive

SPEAKER_01: 32:59

trees can get very old,

SPEAKER_00: 33:01

yeah. Oh, for sure. But you go back to the times when these trees are planted, and you were doing real forest agronomy, you would have... Olive trees interspersed with carob trees, interspersed with nut trees, interspersed with fruit trees. Fruit would be pomegranates.

SPEAKER_01: 33:53

Or figs.

SPEAKER_00: 33:54

Or figs or something. Well, figs not so much. They just grow wherever you go. So you have this wonderful biodiverse grove with great tree spacing. Tree spacing is key. So you'd have five to six meters between each tree. They didn't have pesticides. They didn't have all of the things and herbicides which farmers have available now back when these things were planted. And so this is how they control pests. And this is how people in part of the regenerative ag movement are realizing that's what we've been missing in the past 50 years.

SPEAKER_01: 34:33

So would that mean if you take like an old and modern, relatively modern grove, which many olive groves you see are relatively monoculturists, like they're like perfect lines, maybe even cut, like everything cut underneath. If you would regenerate that, it means you take out a number of trees, you put in other species, you make sure the ground is covered, you decrease this tree number per hectare or per, just to create space and diversity. Or is it very difficult to take a monoculture olive grove and regenerate it in general? Should you start over?

SPEAKER_00: 35:08

So far, the movement has just been one way from traditional to what people call high density and super high density farming. This hasn't happened in the places where we have our farmers, which is mostly Greece. It's been something that's definitely happened in Spain. So it is a one way trip. Once you have pulled out all the old growth trees, and replace them with a high-density grove. A high-density grove here is where you have tree distances of one meter or less. The trees are trimmed at the top and pruned by machines every year by over-the-top machines.

SPEAKER_01: 35:49

They're basically kept as shrubs. They're kept as shrubs.

SPEAKER_00: 35:52

They're smallish trees to shrubs to bushes, but now I think you have some quite big over-the-top machines so they can do these things But the soil can't support these trees. You need to use additives. You need to use input. You need fertilizer. And it doesn't have to be synthetic. You can now go to organic fertilizers.

SPEAKER_01: 36:16

But still, it's an input.

SPEAKER_00: 36:17

It's an input. And you have to goose those trees. You need to support the soil because the soil is being exhausted every year by those trees. And you also have huge pest problems because if you're an olive fly, this is like someone, it's heaven. I mean, it's like a wonderful holiday home bungalows for olive flies. And so you need to have quite intense pest control issues. And there are ways of doing it without pesticides. But I think they're generally quite expensive. But this is a form of agriculture of olive cultivation, which took off since the 1990s. So it's relatively new. Something like 30% of all of the olive oil production, global olive oil production, comes from these high-density groves now. And it's growing every year. This has a number of effects for my farmers, for our farmers, for the traditional farmers, especially the ones who are not on the Amphora platform, because it creates a huge amount of price pressure. And those farmers are also exposed to these global or regional spot prices. They are affected by global supply and demand. And when you have these, I mean, super high density growth is an efficiency gain of two to three to four times global. your break-even price point drops from€3.50 in a traditional grove,€3.50 per kilo, to€1.50 to€1.70.

SPEAKER_01: 37:54

Which means a lot of groves are being abandoned. I mean, it's not that you... They're not in the easiest places. It's not that you very easily plant something else in many cases, or you do, but...

SPEAKER_00: 38:05

There's two things happening. One is groves are being abandoned as farmers age. They can't get the labor anymore, especially in areas of Europe where the rural population has basically left. But the other thing that's happening is that the younger farmers have a choice to make. Are they going to carry on struggling or are they going to join the high-density revolution? And they rip up their trees, the old-growth trees, and plant the new high-density growth. It's happened a lot in Portugal recently. There was a new dam that has been built in the first decade of this century, and it's allowed huge intensification of olive production there. You've created this huge source of irrigation.

SPEAKER_01: 38:57

Because you need the irrigation, yeah.

SPEAKER_00: 38:59

Yeah, I mean, that's the other thing. Once you have 2,000 trees per hectare instead of 500 trees per hectare, suddenly the water demands become much higher. So then you're going to need to do full irrigation schemes. It's much more capital intensive. And this is why in Spain, which is where most of this high density stuff is, and Iberia, where most of this high density stuff has happened, you have so much water stress in southern Spain. One of the contributing factors is not just olive oil.

SPEAKER_01: 39:31

One of the reasons, yeah. And you mentioned there's no, for many places they're simply the age of the farmer as well and probably is not going to choose to is either going to sell off or is not going to choose to rip up everything etc because they're 70 or 65 etc but the fact that they cannot find or cannot find a labor does the fact that somebody like you or other platforms pay so much better does it allow you to then find labor or because there's nobody any left anymore anyway even if you pay double or pay whatever it's not you don't find the hands to to do the work like is this a fix for that or we need more to to get people back to the land

SPEAKER_00: 40:11

uh so yeah they're allowed you know if if you're getting prices of five six euros per kilo then you can typically afford migrant labor the most of the labor comes from kids from bulgaria and romania and and eastern europe who go to greece during the winter months and That's generally the guys who are doing the picking for you. And so, yeah, you can pay for that.

SPEAKER_01: 40:44

And so it restarts and you can pay for the mill and you can pay for a lot of other things, obviously, locally in the community.

SPEAKER_00: 40:52

Yeah, what really marks out olive cultivation as opposed to other agricultural commodities or markets is that it's... While it's intensifying and you have these sort of, I would say, dark forces of the high-density groves beginning to spread, it's traditional. It hasn't changed. It hasn't changed much. Yes, you're using pesticides. Yes, using a little bit of herbicides. Yes, you're using a little bit of synthetic fertilizers in some cases, but the amount's very, very small. So it's still mostly... traditional. but it just can't compete.

SPEAKER_01: 41:38

Do you see that changing with technology or with other things? Like is that, I mean, in terms of harvesting, if the hands are difficult to find or processing, like what's on the horizon to harvest these old trees and to get amazing olive oil if we don't get the hands from Bulgaria, basically? Or is there anything happening there, things you've seen, or is it mostly in the high-intensive ones?

SPEAKER_00: 42:03

No, there is no low-tech technology methods of production. Some years ago, they started using sort of rotating tools to knock the olives out of the trees. Some of our farmers still use sticks to bang the branches of the trees and the olives fall down and they all go into nets. And it's actually quite a wonderful thing to do to be there at the olive harvest. It's a lot of hard work. And The head of the family climbs the tree. He hits it with a stick. And the women and any foreign in-laws that happen to be around are not trusted to hit the trees with a stick. So when I've been in my wife's family, I help with the nets and I do the sorting. It's still very much a sort of a friends and family affair. The farmers do not have capital. They're small farmers. They have 1,000, 2,000, 3,000 trees. And beyond that, you're in a sort of an SME type context. And even then, they don't have capital. And it's still very traditional. But those practices just create... a better olive oil. But there are also all these other benefits for it. I mean, these communities can continue. Those rural communities, I mean, one of the things that I love about the regen ag movement is that it's not just about soil. It's really about the people who live on the soil. It's the farmers. It's these rural communities. And those rural communities are the repository of of culture, of tradition, of history, and the countryside that we go on holiday to enjoy. These farmers, they deserve support because they create positive externalities, if you see what I mean.

SPEAKER_01: 44:17

The countryside that we enjoy. Apart from the food, obviously, the clean air and biodiversity and so much more.

SPEAKER_00: 44:25

And it's a carbon sink. The Mediterranean, it doesn't have high levels of soil carbon, as opposed to sort of areas such as, I don't know, the US Midwest or the steppes of Ukraine, the great wheat baskets. Soil carbon is generally around 2.5%. dry, but those olive trees, which are literally everywhere when you travel through the Mediterranean, They're what, you know, they're the carbon sink of the area. But not only are they the carbon sink, they do everything. That's the source of the biodiversity, this agroforestry. That's what holds the land together.

SPEAKER_01: 45:52

Quite literally.

SPEAKER_00: 45:53

Yeah, literally. Without those trees, I mean, you have this huge, and they're root networks, you have huge problems of erosion. And everything needs to be maintained. You're seeing a lot of farms, a lot of small holdings become abandoned. I see this in my wife's village when we go there. A lot of the families, they're dying out. There's fewer and fewer old people. The old people to the left can't look after the trees anymore. And the kids are all in Athens being accountants. And so that's a fate which we need to avoid.

SPEAKER_01: 46:30

And so what would you tell investors like that are listening? I think I'm interested in the Mediterranean. I'm, I'm potentially from there. I'm very interested to, to put money to work. Like what would you, obviously without giving investment advice, but what would you tell them where to, where to dig? Is it the olive is, is the key, let's say the keystone species here. Is that to dig deeper there and there to understand the olive industry? Is that really, let's say for this region around this, this massive sea the mediterranean sea what would be would you say go deep into the olive one because that's the key one to keep it alive

SPEAKER_00: 47:08

olive oil is a 10 billion dollar global retail market so it's quite big it's probably the biggest single sort of agricultural commodity in those areas and But there's also a lot of others. So there's a lot of different things you can do in the land. I mean, you go to Greece and, you know, you throw a tomato into your garden and you come back in six months' time and there's a tomato bush. It's incredibly sunny, fertile soils. But at the heart of all of these is... is the olive tree. If you are trying to make an impact with your money, I think that's the place to start. But what complicates the picture is the trees are already there. They don't need capital. What these communities need is to become part of the global economy, to become part of the food system, and to be connected to markets that are able to pay the fair price for their products. We talk about the positive externalities that they create. It's the opposite of, you know, people always complain about the meat industry, that it's too cheap and it costs so much more. With olive oil and the farmers that are on the Amphra platform, but the ones who we can't bring onto the platform yet, they create so much more value than they're getting. And so... The opportunity for an investor, I would think, is, and this is what we've identified as well, this is our, you know, I've spent 25 years as a tech investor. That's the opportunity. to bring those products to market because what customers are getting right now in the end market is not what they want.

SPEAKER_01: 49:12

It's not what they pay for.

SPEAKER_00: 49:14

The opportunity is to bring it directly. And so the opportunity, the place people should be investing in is scrunching those supply chains together, making them short. That's where the technology comes in. The technology is on the consumer side. The technology is in the marketing. It's bringing those products to market and allowing those farmers to get a fair price. We are creating the scale for those farmers. that they don't have.

SPEAKER_01: 49:44

Would you do that? Let's flip the question. You would be an investor on the other side of the table with a billion dollars or a billion euros, a billion Swiss franc, I don't care, a lot of money. What would you do? Would you create a thousand Amphoras in different categories? Would you invest everything in these models to radically shorten the supply chain? Or would you do something completely different?

SPEAKER_00: 50:06

I've been an avid listener of your podcast, Koen. And I know that's a question that I had to prepare. And that is exactly what I would do. I mean, that's what regenerative agriculture needs. If you look at extractive agriculture, it's got this huge ecosystem supporting it. The supermarkets, the agribusinesses, Nestles, and those giant capital-rich factories that are built up to process those foods and turn them into packaged long-life products things that the supermarket can stock for months and months and months. And then you have the marketing side. You have pictures of the babies eating yogurts and happy families.

SPEAKER_01: 50:56

Grandmothers making the tomato sauce or harvesting the olives of Bertolli.

SPEAKER_00: 51:01

Yeah, exactly. And so this is what has enabled, this is what has grown up around the extractive agricultural ecosystem. And we need to create something like that for regenerative agriculture. But it's going to come because the demand is there. And you see some small companies starting up, and you see larger companies trying to do it themselves. But I think 1,000 amphoras would be wonderful, but 1,000 amphoras not just for olive oil, but all those regenerative cattle farmers out in the Midwest, they their biggest problem is finding a market.

SPEAKER_01: 51:45

Slaughter. We just had, I don't know if it's going to be out when this is out. It depends a bit on our release schedule. We just had a check-in interview with Dan Miller of Stewart and they're financing a lot of mobile or modular slaughter facilities for ranchers that are getting together to own their own slaughter facilities because that's been their biggest issue to not have access even because they're massive facilities, heavily centralized and you cannot get in. And of course, when you get in, let's say the quality as an understatement is horrific what you get out and they are starting to get together and they used to be of course co-op owned and now we have different structures to own that but to re-own that piece of the supply chain and they need it because they're not getting the cuts they want to send to the chefs they're not getting the access even to slaughtering and it's a huge investment opportunity

SPEAKER_00: 52:33

I totally get it and then the abattoirs is one thing but then they need to get it to the farmers I mean to the customers the customers need access to that and And once that can be set up, and so it's actually quite easy to do it. The first step is to restaurants. The first step is B2B. And this is how I think we can work at Amphora. Something like, if you look at that 10 billion global market, something like 60% of it is the consumer space. And 40% is B2B, is restaurants. But the B2B, the restaurants, is so much easier to address, especially if you don't have the capital. And right now we're growing very, very quickly. Luckily,

SPEAKER_01: 53:19

restaurants are open again.

SPEAKER_00: 53:20

Restaurants are open again, but we're at a very early stage of our business, so it's a bit cheating. So we're having these incredibly high growth rates. But it's also easier to address this market. And those customers buy in bulk. They buy a lot of stuff. So our plan is to start with the restaurants, but then at a certain point go back to our original zero waste solution, which is creating a network of people taking olive oil to people's house and selling it in bulk, like a milkman. And that's the funny thing, because people could say, this will never work. This is a stupid thing. But

SPEAKER_01: 54:00

we've done it.

SPEAKER_00: 54:02

But we've done it. It did work. It was the way things were done before, before industrial scale agriculture. We know that it works.

SPEAKER_01: 54:12

It's just we have to relearn and resee it sort of because none of us has sort of actively maybe lived it for just a bit but not actively enough in terms to see the numbers or to see that it could actually financially work and we're yeah we're rediscovering a lot of things both on the agriculture and agronom side but definitely also on the distribution side

SPEAKER_00: 54:34

right and the thing that underlies the whole of the industrial extractive agriculture space is government action

SPEAKER_01: 54:43

yeah That actually gets to my final question. Magic wand. What would you do? I mean, you know this one is coming, but if there was one thing you could change, what would you do with a magic wand?

SPEAKER_00: 54:52

I would magic up that distribution. I would ask the genie, or no, I have a magic wand, so I would have to create...

SPEAKER_01: 55:00

You're the genie.

SPEAKER_00: 55:02

Yeah, I'd have to create an infrastructure, the distribution infrastructure for the regenerative agricultural community. That's what I would do. But... That's going to be very complicated. I don't think that's for any one person to design. It's going to have to come through evolution.

SPEAKER_01: 55:22

Because then it

SPEAKER_00: 55:27

becomes centralized again. basic income for a while and maybe that's something which is inevitable but I think a first step could be when you have on a food stamp program or some government support could come out of supporting farmers and going into helping people consume better food.

SPEAKER_01: 56:06

To create, I mean, the market is there, but to get it created, and it's a very important point, which we're going to capture for another, we're going to have for another one, but to have it accessible, not just for the ones that can pay it now, that already goes to the farmer's market, already get, okay, maybe not perfect, but good stuff, let's say. But especially for many people that are not in that position, and where, let's say, the nutrient density can have the biggest impact.

SPEAKER_00: 56:31

Oh, totally. And I very much enjoyed a podcast that you did, that you published recently when you were talking to that nice Italian gentleman who was doing the total cost accounting and that there was just a stunning statistic about the value to society of reducing of creating nutrient dense food just the savings to society of reducing heart disease of reducing these diseases of civilization which you can get with nutrient density increases you know that's from a government perspective, especially if you are subsidizing healthcare, that's a low-hanging fruit.

SPEAKER_01: 57:14

No, absolutely. But we're hopefully going to do quite a few interviews on that exact angle of nutrient density and where it matters most. So this is a teaser. Hang on there. It's going to come hopefully this year. But I want to thank you so much for your time and for a very interesting lesson. It's not going to be the last time, I think, in olive oil and decommodification because that's the underlying The underlying storyline is something we have heard before, but not in such a large commodity crop or such an important crop for the Mediterranean countries, which is a massive region under a lot of stress, both from climate, political and all of that. But the humble olive tree can play a very important role in regenerating that. So thank you for sharing. And of course, good luck with selling as much high quality and high polyphenol grade olive oil as possible.

SPEAKER_00: 58:03

Thank you, Coonan. It's been an absolute pleasure. I'm a big fan of the podcast

SPEAKER_01: 58:08

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