Interview with Herminia Millán, Ofade Consulting S.L.

  1. The Spanish olive oil sector needs a major transformation. From your point of view, how should we go about this transformation to continue being leaders in the sector?

Leaders in the image of Spain or leaders in production? Leaders in profitability or in environmental sustainability?

Let us bear in mind that different types of crops are now being grown, with different levels of profitability, environmental sustainability, and social sustainability. We must make all our olive groves viable in all 3 categories:

  • Social sustainability will be fundamentally higher in the traditional olive grove, so the ability to bring this value to the consumer will be a high added value for the product, given that one of the 5 most valued factors for international consumers is social commitment. Therefore, the traditional olive grove must unite to foster this sustainability. 
  • Environmental sustainability – it is already a reality. In 2030, it will be compulsory to carry out a carbon balance and fortunately our olive grove, unlike other crops, is a powerful carbon sink. So, all companies must be certified from now on and they will have to allocate their own resources to be the first in doing so. The stance of “waiting until it is compulsory” is not good for brand positioning… we need to be at the forefront and our sector sometimes falls asleep at the switch. 
  • Economic sustainability. In order to achieve this sustainability, which is the most complex category, companies must once again allocate funds to R&D and invest in the digitalisation and monitoring of their fields and factories. The issue is that if companies do not have specialised and trained personnel to use and make the most of these new technologies, the techniques implemented will be useless. There is no point in digitising an olive oil mill if the technicians and operators do not carry out the necessary checks, with no one to analyse the results and correct any deviations. Therefore, the training of employees, the awareness of the great need for change in order to remain profitable, and the involvement of external personnel to control the implementation of these new technologies on site, will be fundamental in achieving this economic sustainability. I am not commenting on the transformation of the traditional olive grove into a more profitable crop, because that still requires a lot of time, a lot of R&D, and an agreement on water. 
  1. You consider yourself to be passionate about your work and about the world of olive growing. With a degree in chemistry and a high specialisation diploma in oils and fats, can you tell us more about yourself and how people influence the olive sector, especially the people around you? Who has been your role model?

I studied chemistry by chance, because it was the best grade I got in my university entrance exams and I was not sure about what to do. On the first day of my degree, I was amazed and fell in love with it forever. After university and the high specialisation course at the CSIC (Spanish National Research Council), and while I was doing my PhD at the Chemical Engineering Department of the University of Seville, I was interviewed by the German multinational, Süd-Chemie (now Clariant), who were looking for someone to develop enzymes for the extraction of virgin olive oil in oil mills – in other words a Business Development Manager for the EMEA area. For years, I travelled around the Mediterranean, I was very young and always surrounded by men, which was never a problem for me. In fact, it was great because they always treated me well, in countries such as Syria, Tunisia, Türkiye, Spain, Portugal, Italy, etc. I managed the company’s enzyme development, visiting and working in all kinds of oil mills. Later on, I managed the R&D&I department of the Spanish subsidiary and we ended up being one of the main international reference companies in the development of the best pre-treatments for first, second and third generation raw materials (oils and fats) from the agri-food industry, such as new energy sources for biodiesel – a project I managed until 2012. After 10 years in the company, I left on my own accord after declining the opportunity to relocate to Munich as a senior manager and instead decided to create my own consultancy in 2013 – Ofade Consulting – to provide specialised support to the olive oil sector from the knowledge I had acquired in business development and R&D. The good fortune to have travelled and worked with so many companies with so many different profiles has allowed Ofade to learn continuously. The fact that I work for the international vegetable oil sector, and not just for olive oil, allows me to aware of potential future problems. It also allows me to understand that the sector cannot turn its back on or close in on itself, but that it must always work looking outwards, not thinking that we are the panacea, but realising that we are only 3% of the world’s vegetable oil production – a drop in the ocean. That is how you keep your feet on the ground. 

Regarding my sector, I am incredibly lucky. I do believe that I am quite well-respected, and I give thanks every day for being able to do what I love the most. I am very fortunate to be managing QvExtra! since 2020, with 33 companies that support me more than I deserve, as well as having led an initiative this year to unite the sector through the agri-food PERTE (strategic project for economic recovery and transformation), with the help of Innsomnia and Deloitte. I have always been treated well and I am constantly learning from others, who give me the gift of their knowledge, and I try to help where I can. I have been nourished by everyone; I have had great role models throughout my life, in addition to the great friends in the sector that I have today. However, the greatest role models in my life have been my parents, who have always taught me integrity as a fundamental value in life and I believe that this integrity allows me to transmit confidence to my sector so that they open the doors of their companies to me, knowing perfectly well that confidentiality and honesty are the fundamental values of my work.   

  1. The olive oil sector is a fundamental pillar of the Spanish agri-food system. Spain is a world leader in terms of surface area, production and foreign trade thanks to our country’s olive-growing tradition and a technologically advanced and professional industry, capable of producing high quality oils. Spanish olive oil accounts for 70% of EU production and 45% of world production. Are the institutions, public administrations (ministry, councils, etc…), doing everything to help, from the farmer to the consumer? From your point of view, what should we work on in order to strengthen the whole sector?

At the moment, the high consumer demand for virgin oils and the need to increase profitability are currently forcing our sector to improve procedures. Until recently, we were happy to produce whatever we could and sell it to the Italians. Now, with the good work of the companies and the enhancement of their brands, this has changed. We have to make the best EVOO because we are going to have to sell it under our brand, and maintaining a brand over time means responsibility and a long-term commitment to the consumer. And now, from my point of view, the companies have the difficult work:

  • On the one hand, the major bottlers, who are supplied by a variety of oils and who are aware of the serious problems that arise in international trade, have to establish protocols for maximum demands on their suppliers. They cannot continue buying whatever comes from the field and then having to perform miracles by making infinite blends to adapt batches to the requirements of the international buyers.
  • On the other hand, farmers with production and branding, who want to compete in an international market, must also be ahead of the medium-long term international needs and requirements and invest in R&D and innovation to be the first to change.

We must demand that the EVOO producers follow good practices, because that is the only thing that will benefit us in the long term. If we are told that EVOO is healthy because it has polyphenols, then it must have them and we must protect them, for instance. If we are told that we must produce oil without Mineral Oil Saturated Hydrocarbons (MOSH) and Mineral Oil Aromatic Hydrocarbons (MOAH), then we must do so. We cannot ignore this issue until one day we run into the problem and the Spanish market collapses because we have no way of controlling this pollution. That is why consultancies like mine are involved, to help companies to adapt to future requirements.

Regarding the administration, I understand that there are large associations, led by the largest companies, which take part in some of the relevant issues of the administration. Nonetheless, I believe that the administration itself, in addition to these important companies that know the business, must count on the small associations and also on experts, the people who are in the oil mills, those who know the difficulties faced, in the large industry, who do a lot of research, who are specialised in the sector, who are independent and who also bring their vision, to avoid personal interests which cloud the global interests of the sectors. 

I think that important steps are being taken in terms of traceability control, quality control, etc., but there is still a great lack of real knowledge for those who run the oil mills – of the problems of waste, of the obligatory link between the field and the industry, etc. Additionally, existing aid must be promoted, but it is important that the administration understands that in the olive sector, R&D is very limited. We are not talking about developing microchips, we are talking about producing EVOO with very limited regulations that hardly allow us to breathe, all by physical means, so R&D must be understood differently in our sector. It is the most controlled and most limited sector… so the administration must be aware of this in order to act accordingly and support many projects that our sector considers a priority and that are being rejected by the ministry because the technicians consider that they do not have as much R as they should…

A final point that the administration should be aware of is that, in our sector, in most small and medium-sized companies, there is no R&D or business development department. The structures are scarce, so promoting aid without promoting the subcontracting to specialised companies will be useless, because the companies will not be able to take on this aid as they will not have the means to carry it out afterwards. They will be able to do the hard works in the field, in the factory, in the laboratory, the analysis, etc., but R&D needs to design meaningful experiments, control variables to the millimetre, analyse data, compile results, draw conclusions, scale up to industry, etc. Ultimately, a real R&D department is needed within companies, which to date does not exist as such in many of them. 

Therefore, the promotion of aid for the subcontracting of scientific and technical consultancy – which has nothing to do with the overall management of a project as that is something else – will be positive for companies to join the change. It is really expensive for SMEs to have highly specialised R&D departments and it will not be so expensive if they can contract them exclusively for the development of a specific project. 

  1. The current economic crisis and the rise in prices due to CPI are having a negative impact on our shopping baskets. Can we lose consumers to cheaper vegetable oils with prices of €5 for a litre of refined olive oil?

It depends on how we sell it. If we continue to idly allow the news to share headlines about an increase in olive oil prices, we will, of course, lose consumers. I do not see the press constantly discussing the price of avocado or wine, but every day there is a news story about olive oil. The administration, likewise, is alarmed by the current prices, asking in the news that we lower them… in a scenario like this year’s, the losses, despite the prices, will be very high… but it still seems that nobody understands that there is a large percentage of the Spanish olive groves that will not be profitable if olive oil prices are not evaluated and stabilised in a range above €3/litre in bulk, at a minimum. It will be much more expensive for the consumer if all the traditional olive groves disappear, which would mean a very high price increase due to the disappearance of 50% of the world’s olive oil production, for the consumer to pay €4 or €5 for a litre of olive oil – packaged, labelled, and placed on the shelf – when we are paying 4x more for a bottle of wine that we consume in half an hour. It is said that wine brings a sense of pleasure… and what about EVOO? Let’s make it have the same sensation too. Let’s change the message, let’s tell people how good EVOO is and what the benefits are, and let’s make people see that paying €5 per litre is cheap. It is a question of habits and for every news story that comes out talking about how expensive olive oil is, our sector should publish an article explaining how much it costs to produce quality EVOO, and the short, medium, and long term benefits it brings.   

  1. Sustainability or profitability?

Global sustainability, which means social, environmental, and economic sustainability. No sector can survive without global sustainability.