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Business Lessons from an Olive Oil Farm

Dec. 4, 2018

Business Lessons from an Olive Oil Farm

by Aly Beveridge

An advertising executive who quits her job and farms an olive grove in southern California: it’s the perfect premise for a late-nineties or early-aughts romantic comedy. But for Theo Stephan, who owns and operates Global Gardens, the first extra-virgin olive oil farm in the Santa Ynez valley, owning her food business has not always played out like a movie. Stephan learned many tough lessons as she developed her business and continues to learn more as the world and climate around her continue to evolve. 

Since her early twenties Stephan had been growing a successful advertising and design agency that had worked with major clients including large Hollywood movie studios. During a late-night ad shoot at theme-park for one of her clients, Stephan noticed the garbage park cleaning-staff was picking up around her, leftover from the previous day’s guests, had all been designed and generated by her firm. 

“I thought to myself I’m creating all this trash! I had always considered myself an environmentalist. That very night, I thought to myself, I have to quit,” Stephan says. 

Stephan packed up her life in Ohio, sold her firm, and moved to Los Olivos, just north of the Santa Ynez valley in Southern California. “I was in my late thirties. I was unhappy, tired, and overweight,” she recalls. Shifting from “Armani to dirt,” as she puts it, was not just a change in an emotional mindset for Stephan. There are many reasons why starting a food business or farm in the US can be a big challenge even for someone who has achieved previous success running a business. 

In 1998, two years after she planted her first 2000 trees, Stephan had her first olive oil harvest. From that point, her strategy was to get her product in family-run grocery stores all over the country. She was operating a 50 acre property which as she puts it, “sucked money” and consumed all the nearly 1 million dollar nest-egg she had saved from selling her previous business. It turns out she had scaled too big, too fast and couldn’t get her product into stores so that consumers could buy it. 

“I was thinking wholesale sector instead of direct retail. To be in grocery stores as food companies in the United States have become more consolidated, you really need to go to a distributor. It was really inconvenient for each store to buy individually from me. For the distributer I had to pay 15%, for a shelf talker 5% and shelf placement  6-9%” she explains. 

This model was unsustainable for Stephan who eventually switched tactics to direct distribution and even developed a subscription style service for customers who want quarterly olive oil delivery. However, her circumstance highlights the challenges small producers face in our country. A national consumer goods survey by Package Goods indicated that, in 2016, 85% of Americans shop for food at the grocery store, including big-box/wholesale stores, dollar stores, and grocery store chains, while only 12% of consumers shopped at the farmers market. In order to get consumer’s attention at scale, particularly for packaged or shelved goods, farmers and food producers have to take 20-30% cut from their product sales to even get into the store. That means large corporations which have multiple products and greater economies of scale have an inherent advantage in growing their market share given the way that most Americans buy their food. 

Stephan persevered and was able to hold onto her business. She changed strategies and now operates a farmstand and tasting counter right on her now smaller property which holds both her three acre farm and her home. The property both reveals and obscures what a labor of love the olive oil business has been for her. She lives in a beautiful place and spends every day outside doing back-breaking work, constantly finding resourceful ways to keep her business moving along. 

“When I was 38, I had expected that at this point in my life to be really well off and not have a care in the world. It’s all about thrift and the business now. When you pull into my farm it’s beautiful. Most people think this beauty comes naturally. But it really doesn’t, it comes from weeding and watering and planting,” she says.

Theo with her two daughters Sunita (L) and Anita (R)
Theo Stephan and her two daughters Sunita (L) and Anita (R)

The thrift and resourcefulness required to run her olive oil business have given Stephan clear insight into the relationship between money and food for the average American consumer. She says that most Americans see getting a higher quantity as a greater value for their money. 

“Most people don’t know how to use real food. They want quantity over quality and they don’t understand the real difference until they come to my farm and taste it.”

Many Americans do not realize olive oil is essentially fruit juice.  Like any fresh juice, the older it gets the less potent and less flavorful it becomes.  A tablespoon of any well-made olive oil adds complex flavor to any dish (savory or sweet), while a stale olive oil can lack the sharp, grassy flavor that fresh olive oil has. Stephan asserts that there is something transformational about a well-crafted olive oil.

Stephan says, “When people taste real olive oil their eyes light up, oh my god I’ve never tasted anything like this. That’s what keeps me going.”

You can try Theo Stephan’s olive oil by visiting Global Gardens or ordering through their website https://www.globalgardensonline.com/.  Use promocode: SLOWFOOD for free shipping. 

Image Source: Edible Santa Barbara

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