Vancouver-area businesses struggle amid rising olive oil prices

At Hydra Estiatorio, there is no replacement for olive oil. It's a staple ingredient, used in almost every dish. 

But the Greek restaurant, located in downtown Vancouver, is one of many local food businesses suffering as olive oil prices skyrocket amid a worldwide shortage. 

Because substituting is not an option for the restaurant, rising costs mean profit margins are thinning. 

"It's the backbone of our cuisine," said Mark Greenfield, director of culinary operations for Executive Table Group, which owns Hydra.

"It's not something we could consider changing or altering in any way." 

Climate events like drought, wildfires and flooding, as well as increasing production costs, have caused global olive oil production to decrease.

In the last three years, average retail prices have increased by 140 per cent, according to Statistics Canada data. Prices have jumped by 25 per cent since January alone.

Greenfield says restaurants are not only facing increased prices, but scarcity has made olive oil harder to buy.

"I've had suppliers tell me ... it's not available. Even at a higher price they can't even source it or get their hands on it," he said, adding the restaurant has had to diversify its sources of the oil, now relying on several suppliers.

"It can be a scramble, especially for the smaller boutique importers who are sourcing from a single-origin farm," he said. 

Greenfield is also concerned about substitutions in the supply chain, or the possibility that those importing the oil might cut products with cheaper vegetable or seed oils. 

He says Hydra chefs taste their olive oil every three months and carefully select which one to use. 

But Greenfield says many smaller restaurants may have to choose between substituting olive oil, using a lower quality oil or increasing their prices.

Fil Bucchino, an olive oil expert and professional taster, says the past three years have been challenging for olive producers in Europe, but last year in particular was the "perfect storm" of poor weather and other factors like increasing supply-chain costs and a spike in the cost of glass, which is often used for packaging.