Juan Manuel Martínez - manager, Aceites Cazorla

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