The stage is signalled by the start of a change in colour of the fruit from its unripe colour to its fully ripe colour.
The flavour of oil from any given olive can be influenced by how ripe it is when harvested. Some feel that the harvest stage has an even bigger impact on quality and taste than on which cultivar of olive the oil is made from.
The greener the olive, the more herby the taste with more bitter and pungent tones, and the better the storage life; the riper the olive, the more fruity the taste. Oil from very ripe olives will have an almost buttery feel to it in the mouth, but the flavour will be flat, and the storage life poor.
Producers have to decide at which point they are going to call it to start picking. For any cultivar, there is about a 2 to 3 week window in which they can capture the characteristics they want.
At the point of colour change, the rate at which the percentage of oil in the olive increases has reached its maximum. After that, it will still increase, but at a slower rate.