Slippery business

Montreal’s Kalikori Olive Oil is jeopardized by droughts in Greece.

The owners of Montreal-based Kalikori Olive Oil knew their burgeoning venture was in jeopardy when fire spread across Greece this summer. Fortunately, the family olive grove owned by Effy Ligris and her business partner and husband, Spyros Bourboulis, wasn’t torched—but the fire’s lingering effects and the continuing arid weather could still affect this year’s harvest. Olives may like it hot, but not as hot as it’s been this year. It’s surprising then that Ligris managed to laugh when a friend recently joked that this year’s oil would have a smoky quality. “You have to see the humour in everything,” she says.

All kidding aside, when Greece was set ablaze, Kalikori’s owners were faced with the severity of the drought and forced to rethink their company’s strategy. Olives grown in drought conditions tend to be small and don’t produce much oil. Kalikori’s olives grow in only one grove in Greece’s Peloponnesian region, so the company could face a year with very little product to sell if this November’s harvest is too small or of insufficient quality. That’s sometimes the price of being dependent on one source, but making oil from other olive supplies could do more harm than good, says Bakr Ibrahim, director of the Centre for Small Business and Entrepreneurial Studies at Concordia University and author of Family Business Management: Concepts and Practice. “They have maintained a competitive advantage, because they are the suppliers. They are able to control the product, and they know the environment in Greece very well,” Ibrahim says.

The bone-dry summer was completely unpredictable, and neither Ligris nor her father recall droughts this drastic in the past. “It kind of threw us for a curve,” says Ligris. “It’s not like this happened 20 years ago and we know what happened afterwards. It’s uncharted territory for us.”

A lot of territory is still fairly new for Kalikori, which is entering its fourth year. Ligris's family has owned an olive grove in southern Greece for more than 55 years, keeping what they needed and selling the rest to local co-ops. Her father passed it down in 2003 and gave his blessing to the idea of marketing the oil in North America. Within a year, Kalikori had harvested, bottled and imported its first batch of l’Olivier de Vassily, a single-variety, cold-pressed olive oil named after Ligris’s grandfather.

L’Olivier de Vassily was an instant success, so much so that the 4,000 units Kalikori imported sold out to specialty food shops within a few months, without any chance of restocking until the next year's harvest. “Stocking too little or too much is a serious problem facing many startups,” says Ibrahim. “But in the first year, they were only trying to test the market. Good entrepreneurs will test the market and use their gut feeling.”

While the mainstream olive oil industry is in the spotlight for fraudulent labelling and shady dealings, Ligris believes there is a growing market for her rather expensive specialty product. “The small estate olive oils that are produced by a family are usually the real deal, the good stuff,” she says. And at $23 to $27 for a 375-millilitre bottle (compared with $6 to $9 for a bottle double that size of standard supermarket variety oil), it should be.

Consumers seem to buy into Ligris’s belief. Kalikori’s sales more than doubled in the second year, and the couple embarked on a kind of professional development mission to Greece at harvest time. They pulled on gloves, threw down nets and shook the trees, taking instructions from the grove’s caretaker, Ligris’s uncle. “I felt like I needed to immerse myself completely in the culture of olive oil,” says Ligris. Kalikori’s imports in the third year were five times the first, at 20,000 units, and the company started importing red wine vinegar from the same region—which sold out immediately—as well as handpicked sea salt.

That kind of diversification is the best way to combat impending olive oil supply problems, says Ibrahim. Kalikori should continue to expand its product offerings—rather than olive sources—by increasing its vinegar production and choosing other complementary products that may not be affected by the same weather conditions. “I always say to entrepreneurs, a serious problem in one area may lead to opportunities in others,” says Ibrahim. “That’s what entrepreneurship is all about.”

Ligris knows that patience is the key to recognizing those opportunities. “We’ll keep giving our regular clients what they know, what they like and what they are used to. And when the time presents itself for us to grow again, we’ll be more than ready,” she says. “The dream is still alive. We’ve just slowed down a bit.”