This Tuscan startup offered all its olive oil within the U.S. Then got here Trump’s tariffs

SEGGIANO, Italy — On the steep hills of southern Tuscany, Romain Piro has spent the previous 20 years harvesting fruit from his silvery olive timber and turning it into olive oil.

In 2019, he satisfied his sister, Marie-Charlotte Piro, to enter enterprise with him. The siblings began transport their small-batch bottles to the USA, the place olive oil is in excessive demand — however the place little or no is made. People devour nearly 400,000 tons of olive oil yearly, greater than another nation besides Italy, and import some 95% of it.

“One would be crazy not to export to the U.S., because it’s an amazing market,” Romain Piro says. “And I hope it’s going to stay this way.”

At first, Olio Piro discovered success in the USA — racking up gross sales, trade awards and high-profile followers at Michelin-starred eating places. However now, it is wanting elsewhere for progress, due to President Trump’s new tariffs on nearly the whole lot the USA imports, together with olive oil. For months, the Piro siblings have watched Trump threaten after which retreat from potential taxes as excessive as 30%, earlier than asserting a deal with the European Union final week to seemingly finalize tariffs at 15%.

Particulars are nonetheless being hammered out. The European Union continues to be hoping to negotiate some exemptions for wine and different agricultural merchandise, and a few olive oil trade members inform NPR they have not given up on the potential for a reprieve. And 15% is best than the worst-case situation — however it’s nonetheless a steep new tax for European olive oil producers, who’ve spent the previous couple of years struggling with excessive warmth and poor harvests.

For startups like Olio Piro, which has restricted sources and skill to resist monetary shocks, surviving this yr’s commerce chaos has meant searching for extra steady buying and selling companions. In order Trump took workplace early this yr, the Piro siblings moved up their plans to start out exporting to different international locations, together with Canada, Japan and Germany.

“We were always planning to be global, but we were not planning to go global that fast,” Marie-Charlotte Piro says. “The uncertainty was really difficult to handle.”

The US depends on international (olive) oil

As soon as a specialty ingredient, olive oil has grow to be a vital meals supply for People. However the USA would not — and might’t — make a lot of the olive oil it needs. Home farmers and producers, largely in California, provide solely 5% of the olive oil People purchase. Every part else is imported, largely from Spain and Italy.

“We are woefully dependent on foreign oil,” says Joseph R. Profaci, govt director of the North American Olive Oil Affiliation, a commerce group representing each home and worldwide producers, together with Olio Piro.

This dependency has created alternatives for entrepreneurs just like the Piro siblings, who grew up in France earlier than beginning down two very completely different paths. Romain is the dreamer: He adopted a Buddhist monk to Tuscany, the place — whereas learning and volunteering on the native Buddhist cultural heart — he began farming as a day job. When he started making olive oil, he offered it by loading up the again of his Volkswagen van, “driving to Paris, knocking on the back door of Michelin-starred restaurants and selling the olive oil in the alley,” his sister recollects. “The chefs loved it — but it was not a scalable business.”

In the meantime, Marie-Charlotte had moved to Miami and jumped into its actual property increase. “I had been selling overpriced condos for 20 years — and did extremely well,” she laughs. When Romain lastly satisfied her to group up, “I was very confident that I could do the same with a very high-quality olive oil — that was not overpriced but that was more expensive than the other ones around them.”

Certainly, Olio Piro sells a half-liter bottle of olive oil for $56 — a value that analysts name “superpremium” and that even Marie-Charlotte acknowledges is larger than she would love. She blames a few of that on Olio Piro’s up-front prices as a quality-focused small producer: It harvests olives solely by hand, and it makes use of a trendy kind of milling expertise that may be costlier than what most olive oil producers use.

A few of these unit prices will come down as Olio Piro scales up. And with gross sales rising, Marie-Charlotte had thought this yr can be the time.

“We’ve been waiting for this moment, to be able to lower our prices, for three years,” she says. “Selling a $56 bottle of olive oil is really hard.”

However the tariffs have modified her plans. And he or she’s not alone: Even the world’s largest olive oil producer is bracing for tariff chaos. Spain’s Deoleo, the proprietor of manufacturers together with Bertolli, depends on the U.S. for greater than 1 / 4 of its gross sales. Its CEO not too long ago advised CNBC.com that Trump’s tariffs would finally increase costs for U.S. shoppers. (The corporate didn’t reply to an NPR request for remark.)

But because the tariffs roil European olive oil producers, their U.S. opponents cannot reap many advantages. Trump has mentioned that his new taxes will encourage extra home manufacturing and thus create extra U.S. jobs. However as with avocados or espresso beans, olive oil trade members and analysts say home farmers simply cannot develop sufficient olives to fulfill U.S. demand.

Olive timber require California-like climates, which few different U.S. states share. And even when California farmers began planting extra olive timber this yr, these timber would not begin producing olives for a number of years.

“Olive oil has become essential to the American kitchen — and it’s also something that you just can’t really get anywhere near to satisfying demand for domestically,” says Randy Burt, a client merchandise analyst for AlixPartners.

He predicts that Trump’s new tariffs will possible lead to larger costs for U.S. shoppers. If that occurs, he expects some consumers to change to cheaper options.

“Personally, I don’t think any of them are as good as olive oil,” Burt says. “But that’s what happens when prices tick up.”

Folks on tight budgets are probably to change to vegetable oils, like sunflower or canola oil. These are often known as “seed oils” — which have been criticized as unhealthy by Trump’s well being secretary, Robert F. Kennedy Jr. (Many diet and science researchers have advised NPR that whereas seed oils is probably not as wholesome as olive oil, the claims that they are dangerous to well being are overblown.)

The North American Olive Oil Affiliation has tried to attraction to the Trump administration and Kennedy’s “Make America Healthy Again” agenda. This spring, the group met with lawmakers and held an occasion in Washington highlighting olive oil’s well being advantages and its insufficient home manufacturing, arguing that lawmakers ought to exempt olive oil from the tariffs.

The efforts haven’t yielded any obvious outcomes, however Profaci, the commerce group’s director, hasn’t given up hope. Because the European Union makes an attempt to barter tariff exemptions for agricultural merchandise that the USA doesn’t produce a lot of, Profaci plans to proceed advocating for olive oil: “We of course think it makes perfect sense to protect American consumers, especially for healthy products,” he mentioned in an e-mail after the commerce deal.

Spokespeople for the White Home and the USA commerce consultant didn’t reply to requests for remark.

A sport plan that expands past the U.S.

It could be months earlier than U.S. shoppers begin seeing the total influence of a 15% tariff hit their European olive oil costs. As with so many different merchandise, some firms are more likely to attempt to eat a few of the prices, at the very least initially. And a few giant producers may have rushed to ship extra bottles earlier than the upper tariffs went into impact — though as a perishable good, olive oil cannot be stockpiled indefinitely.

However these coping methods are extra out of attain for small companies like Olio Piro, which had $500,000 in gross sales final yr — and which does not have the monetary cushion that its largest opponents do.

So early this yr, Olio Piro began pivoting. Marie-Charlotte introduced on an export supervisor and extra workers to analysis its new markets and begin dealing with logistics — the whole lot from translating web sites to determining which native commerce reveals they need to attend. She’s additionally elevating cash from traders and planning to take a position 150,000 euros in Piro’s international growth this yr.

“It’s a pretty large process … and for us, it’s a very large number,” she says.

In the meantime, the White Home has but to offer a lot element on its commerce settlement with the European Union — which means that the Piro siblings, in addition to their whole trade, are nonetheless dealing with some uncertainty.

It is affecting producers in numerous methods. Bigger olive oil producers are inclined to retailer their olive oil after the autumn harvest after which ship all year long, which means that many have needed to navigate the altering U.S. tariff charges on a every day or weekly foundation.

However at the very least on this case, being small has labored to Olio Piro’s benefit. Its subsequent olive harvest would not begin till October, after which it should bottle the oil. Then Piro will ship its new harvest abruptly, early subsequent yr — which means that its founders have just a little extra time for the small print of the EU’s commerce deal to shake out.

So Marie-Charlotte Piro can wait till January to determine how a lot olive oil she is going to ship to the USA — and the way a lot she’ll ship to new clients elsewhere, like in Canada.

“When we are ready to get on the boat, this is when we are going to decide,” she says. “The choice will be made according to the level of the tariffs.”