California’s Bitter Fruit: Olives : This is the olive that built an agricultural empire. Now the super-colossal California black ripe olive industry is in big trouble.

The world’s largest olives grow in turn-of-the-century orchards bordering Northern California farm towns such as Oroville, Palermo and Richvale. An estimated 8,000 acres of Sevillano trees yield a variety that is marketed--in agricultural hyperbole--as “jumbo,” “colossal” and even “ super colossal.”

Yet, rather than being a source of pride, an example of the state’s farming preeminence, the stately trees represent one of the reasons that California’s olive growers are in trouble on the eve of the 1993 harvest.

Marketing experts within the $200-million industry decided a few years ago that neither consumers nor chefs wanted large olives because they are perceived to be more costly. Today, processors are refusing to buy Sevillano olives from growers, and there are proposals to replant or graft over as much as 50% of the groves in favor of trees bearing smaller fruit.

“It’s a sad thing removing these trees, some of which have been in the same family for two or three generations,” says Adin Hester, president of the Olive Growers Council of California in Visalia. “To put a chain saw to something that graceful, that is as old as 100 years, is a heart tugger.”

The disarray in California, the nation’s only olive-growing state, comes at a time when the rest of the world’s producers revel in a decade-long resurgence.

The results are apparent in the marketplace: When Americans want olive oil they turn to Italy. When the nation’s restaurants need martini olives, they get them from Spain. And when heightened interest in international cuisines increases demand for olives, U.S. consumers opt for the traditionally cured Mediterranean varieties from Greece or France.

On the eve of the 1993 California harvest, by contrast, the state’s largest processor--the Lindsay Olive Growers Cooperative--is in bankruptcy liquidation, imports are taking a major share of the market, and there is a one-year surplus of domestic product in storage (normally, thereshould only be enough for a couple of months). Supermarket sales of table olives, another barometer of consumer interest, are flat for the third year in a row.

Many growers and processors put up a brave front, but some top industry executives privately wonder how long they can expect to survive when all they offer is the canned black ripe olive, a singular, overly familiar product ill-suited for today’s multidimensional, demanding food environment.

“We have not done much as an industry that could be considered imaginative,” says Tim Carter, chief executive officer for Bell-Carter Foods Inc., now, after Lindsay’s bankruptcy, the state’s largest olive processor. “We’ve got to look for new uses (for the olive).”

Any innovations in the state’s olive industry come almost entirely from the small-scale, family firms willing to adopt traditional European curing methods and offer a wide range of olive products.

Meanwhile, the five major California processors continue to resist every significant trend involving their product--stubbornly continuing to produce the canned black ripe olive . . . an olive that is neither ripe nor black when harvested.

Picked green, the fruit is cured in a sodium bicarbonate solution that removes the bitterness but dilutes the fruit’s flavor. Then air is pumped through the cure in order to oxidize the olives and force the uniform dark-brown color. The olives are rinsed repeatedly with water to remove the curing solution. The fruit is then chemically stabilized in order to keep its color from fading in the can. In a sense, the California black ripe olive is soul mate to the derided supermarket tomato that is picked green and gassed a reddish ripe.

“For years, farmers bred hogs with a lot of fat on them because they thought the consumer wanted a fatty meat,” says David Daniels, manager of the California Olive Committee in Fresno. “Now, they have changed their product so that pork is actually lean; they bred a lot of the fat out of that animal. But they didn’t do anything until consumers first started buying more chicken than pork. Pork producers had to make an adjustment . . . . And now we are going through our adjustment.”

Europeans, on the other hand, use several ways of curing. Many, such as the Greek varieties, are harvested ripe and then pickled in brine or dry salt, creating their distinctive sharpness. According to Harold McGee, author of “On Food and Cooking” (Charles Scribner’s Sons: 1984), others are then soaked in a lye solution and washed thoroughly to remove the “strong-tasting” flavor attributed to a natural olive component called oleuropein.

“The problem in a nutshell is that we have to persuade the larger processors to start getting away from the canned black ripe genre,” says Craig Makela, founder and president of Santa Barbara Olive Co. Inc. “The industry is so entrenched that they are reluctant to take even the excess olives and do (something different). No one will take the lead.”

Makela is an exception. He started his company 11 years ago in a garage and has since expanded to 4,000 square feet of warehouse and office space, generating about $4 million annually in sales. He produces 32 gourmet-style olive products--including olive oil--often using fruit that, as he puts it, “no one else wants.”

“(The California industry) could produce a lot more variety than you are seeing,” Makela says.

Olive trees were introduced to California by Spanish missionaries in the late 1700s. Today, four varieties--Mission, Manzanillo, Sevillano and Ascolano--are grown on about 38,000 acres, making olives one of the state’s major crops.

Supermarket sales of all olives, domestic and imported, totaled $322 million in 1992, down slightly from the previous year, according to Progressive Grocer, a trade magazine. Of the total, $180 million was generated from canned black ripe olives, 80% of which come from California, with the remainder imported mostly from Spain.

Another large market exists in the restaurant industry, where the California black ripe olive is used in Mexican food, salad bars and on pizza. Any growth in sales during recent years has been fueled by the food service industry. But even with such widespread usage, the California black ripe olive winds up mostly as a garnish rather than a principal ingredient.

Daniels, of the California Olive Committee, thinks the measure of the state’s olive industry needs to be taken over the long haul, not by events of the past year.

“In 1978, the California olive industry had its first 100,000-ton harvest and sold 10 million cases (of canned olives),” he says. “This past year, 17.7 million cases of black ripe olives were sold (of both domestic and imported); that’s a 70% increase in 14 years. Not many things that come in a can have had that kind of growth.”

However, a closer look at the statistics indicate a far less robust record. In 1992, for instance, three million cases of imported black ripe olives were sold in this country, reducing California’s total share of the category to about 14.7 million cases. Rather than a 70% growth over the last 14 years there was actually a 47% increase for California, or a modest 3% a year. And much of the growth was clustered in the mid-1980s.

A pivotal moment for the state’s industry occurred last year, when the massive Lindsay Olive Growers Cooperative declared bankruptcy. The 100,000-square-foot processing plant and 34-acre site is still in the process of being liquidated by auctioneers. The Lindsay failure was among the most spectacular in the state’s farm history, affecting about 325 growers who found themselves without an outlet for their record 1992 crop. The bankruptcy has been alternately attributed to a lack of product marketing, costly environmental regulations and short-sighted management.

“Lindsay was a real disaster for the farmers; it hurt,” says Hester, of the Olive Growers Council. “The bankruptcy took $20 million in growers’ (equity) down the tube . . . . We can’t afford to lose (olive) processors. It is the kiss of death for this industry.”

But the Lindsay failure is just the most glaring example of missteps by California olive growers and processors.

There is also a glut of product despite the fact that olives trees are cyclical in nature, with years of heavy yields followed by leaner harvests.

California olive industry representatives say the small-sized Mission and Manzanillo olives are in demand today because more of the fruit “fits in a can” than the larger-sized Sevillano or Ascolano.

“Consumer preferences change over time,” says the olive committee’s Daniels. “Unfortunately, agriculture is often the last to make the change.”

He says that records indicate sales of Sevillano olives have been flat or in decline, while the supply of the variety has doubled as the trees mature and produce more fruit per acre.

Carter, of Bell-Carter Foods, says that major restaurant chains have also been instrumental in forcing the change to smaller varieties because they are calculating the per-pound cost of foods and believe there is greater value with more olives per purchase unit. He also concedes, however, that processing the Sevillano is more expensive than the smaller varieties.

The California black ripe olive is a child of convenience, created out of the necessity to process large amounts of fruit at once. Harvesters strip the green fruit from trees, often baring tree limbs of leaves in the process. The stripping tends to bruise the olives, and oxidizing the fruit to a dark color during curing hides the blemishes. In other countries--Spain, for instance--harvesters pick olives individually, a labor-intensive process that protects the fruit and diminishes the likelihood of skin damage.

As a result, Spain is able to produce its signature green olive that is a fixture in restaurants and supermarkets alike, while Californians gave up making a Spanish-style green olive three years ago.

Yet, a few small producers still produce olives that are allowed to fully ripen on trees to a purple or cherry-red color before curing takes place.

Graber Olive Co. in Ontario has been producing a tree-ripened olive for almost 100 years.

“It’s difficult to do our kind of olive because it is such a specialty product; it doesn’t lend itself to a large operation,” says Cliff Graber, whose grandfather founded the company in 1894.

Rather than strip the trees, workers for Graber return to the orchard several times during the two-month harvest season to handpick fruit that is at its optimum ripeness.

Graber believes that, despite its current problems, the future for California’s olive looks good. He is especially encouraged by increasing attempts to produce olive oil. Even so, the percentage of the crop diverted for oil remains negligible.

The state’s growers and processors claim that there is no profit in oil because foreign producers are government-subsidized and can undersell them. Still, the United States is a major olive oil market, with annual sales of $288 million, according to Richard Sullivan, president of the American Olive Oil Assn., a trade group that represents importers.

The consumers’ love affair with olive oil began on a mass scale in 1983, when 30,000 tons were sold in this country, compared to 100,000 tons today, Sullivan says. The surge amounts to a 300% increase in the past decade, or a stellar growth rate of 30% a year. Yet California produces only about 500 tons of olive oil.

“California was not in the ballgame 10 years ago and they are less in the ballgame now,” Sullivan says. “It’s not because of European trade policies, but because (producers here) never got into olive oil. I guess they thought there was more money in table olives.”

Hester of the Olive Growers Council insists that olive oil is a losing proposition for Californians because the cost of land, water and production is higher than in places such as Spain, Greece or Tunisia. He says the sought-after Mission olives, destined to become canned black ripe, yield growers about $600 a ton at the farm gate. Other varieties that could be used for oil here fetch growers about $300 a ton, considerably less than their production costs.

“There is no justification to grow olives for oil in California,” Hester says.

According to an agriculture trade magazine, however, there were as many as 60 California olive oil plants in the 1940s. Makela, of Santa Barbara Olive Co., says growth in locally produced olive oil will not come from the olive industry but from the state’s wineries. He says as many as 15 wineries in the Santa Barbara area alone have invested in olive oil equipment. Other California wine regions are also active, he says.

“In the next 10 years,” Makela says, “there will be a mighty change in the California olive industry.”

The change, unfortunately, will be borne more of necessity than invention.