The market for essential oils is growing as more and more people want natural flavours, natural medicines, antiseptics, preservatives, solvents, fragrances and feed stocks (feed stock is a term for a source of chemical raw material from which other chemicals can be made. Most of the time in cosmetic chemistry we are looking for a source of carbon.This is mainly petroleum but these days there is a growing demand for vegetable derived feed stock) even the oils themselves and with figures like those above it is tempting to think that the world is full of little essential oil farmers making their own unique blend of brilliance, going from farm to bottle in the blink of an eye.The reality is rather more complex.
Essential oil farming is labor intensive, complex and just as risky as any other type of farming not least because the weather isn't getting any more predictable and the world getting any easier to work in!A poorly timed harsh frost, a plague of pests, late-season torrential rain and gusting winds can all see your blooms, fruits andleafy greens beaten, battered and bruised into an un-useable pulp.Further, some parts of the essential oil growing world straddle conflict zones and are caught up in civil unrest like for example the limes that come out of Mexico.Last year there were several well-publicized hold-ups of lime-laden trucks leaving farms for processing.In fact things got so bad that the lime militia tax ended up pricing some American consumers out of the market! Some limes never even made it to market sparking a global shortage of this small but important green fruit.
Things like this can and do have massive impacts on the essential oil market and mainly because the vast majority of it is concentrated into several large growing regions and is often controlled by a relatively small amount of companies.
Staying on the subject of citrus oils we must also remember that essential oil production is not necessarily the main reason for growing the crop.Take oranges for example, as we are well aware the whole fruit is an important crop in its own right and the essential oil is often just a useful way to turn orange juicing/ pulping waste into a profitable product.Orange terpenes are a key industrial solvent and interest is growing in them becoming a sustainable alternative feedstock to petroleum for the chemical industry. Producing a good quality, pure and clean essential oil is just one other string to the crops complex and profitable bow.
Citrus is not the only multi-purpose essential oil crop of course.Flora's such as the ever popular rose and lavender both have profitable dry and fresh cut flower markets and both are also in demand in the flavor and fragrance industries, so much so in fact that if you want to get your hands on some top rose oil you had better be prepared to go in fighting with a fat wallet and a stomach for taking on the worlds largest fragrance houses, many of whom own the farms. Bulgaria is the rose hub of the world (or is it Turkey, they are both key) and on top of that it also produces lovely Lavender, a few herbs and some seedlings. For such an important trading hub you would expect to see thousands of companies in operation but the reality is that in 2002 there were only 56-registered essential oil companies in the whole of Bulgaria.Those companies were sending oils to 30 distilleries and were exporting via 22 agents and all for a total of 127 MT of essential oil (2001 figures).These figures may well be out of date now but the bigger picture remains the same, essential oils for the cosmetic industry, to sell onto the market as essential oils and not as flavours, fragrance, industrial chemicals or finished perfumes are a small piece in this convoluted pie.
The process of getting from crop-to-product is called a crops value chain and for essential oils it involves several key steps:
Processing of the crop can be on-site or off depending on the farm.It is usual for material to be sent to a third party distiller/ presser as the equipment to do this is expensive to set up and much skill is needed to extract good quality oil. When it comes to sales and marketing it is again usual for the raw oils to be purchased by a wholesaler or exporter who may carry out further testing of the oils, may blend them in some value adding way (improving or standardizing the quality) or may organize further refining (decolouring, further filtration or removal of photosensitizing chemicals etc.).In some cases wholesalers and exporters will segregate stock from each farm and in others it will all be blended together.
The reason why oils are not necessarily traced throughout the supply chain is because the market for these oils is complex.Oils destined for therapeutic use are required to have a tight spec of properties and so may well be blended with other batches to achieve that.The industrial feedstock market just need a good source of carbon, the solvent market want the cuts of the oil with the highest solvent power. The flavor industry is also looking for those crisp, flavorsome notes or chemicals and the fragrance industry is of course focused on whatever makes it smell right.Bottled essential oils are only one part of the equation.
Another crop with an interesting story is Sandalwood.Australian Sandalwood - Santalum Album is thought to have its origins in India, making it to Australia over a two thousand year period as people traded and took religious pilgrimages through China and onto Indonesia.Along its journey Sandalwood changed somewhat resulting in Australian oil that is markedly different to its Indian cousin.Perfume use outstrips essential oil use for Sandalwood as it does for many other essential oils, not least because of this oils capacity to hold and ground a fine fragrance thanks to its base note chemistry. But Sandalwood oil comes from the heartwood and this can take up to fifty good growing years to mature making Sandalwood farming a career for the patient and cashed up and dramatically impacting on how much oil is available on the market.Humans are greedy things and demand for Sandalwood oil easily outstrips supply pushing up prices and making it difficult to secure ongoing supply.The market for pure Sandalwood essential oil is especially tight given the low volumes traded out of India at the moment and also because many of the leading fine fragrance brands have sought to backwardly integrate their supply chain - buying into the oil growers and thus securing the best quality stock.Many perfume houses do now use synthetic Sandalwood notes in their mainstream perfumes and perfumes for household and cosmetic use to allow them to meet required price points and supply volumes but even so, sometimes the Essential Oil market is lucky to get any oil at all!
Eucalyptus and Tea Tree are also worth a look, these two work-horse oils while a staple in any aroma therapists arsenal are not fawned over like Rose, Neroli or even the spice oils.They smell more medical than pretty, are cheap and readily available and are almost just part of the furniture but their back-story is equally interesting.
It took less than a year of setting up the colony of New South Wales for the early settlers to distil their first Eucalyptus oil and by 1852 the first commercial production had begun in Dandenong, just outside of Melbourne.Much of Australia smells of Eucalyptus, in fact it is one of those aromas that instantly transports you to the fresh, sun-drenched outdoors of the Australian bush but with over one thousand species of Eucalyptus on offer, picking the right one for oil production must have been a bit of a headache.
Speaking of headaches Eucalyptus is often grown for its therapeutic qualities where it is often used to treat coughs and colds, in vaporizers and as a disinfectant agent.Out of the thousand plus options of Eucalyptus oil growers have selected species that are rich in the component 1,8-Cineole which is the terpenoid compound found in the leaf that has the most pharmaceutical activity.
The pharmaceutical industry requires exacting standards for its medicines as one could imagine how dangerous it might be to sell off-the-shelf medications that are double strength one day and inert the next (sorry, the sun just didn't shine on that batch) and as such to make sure oils meet the therapeutic standard batches are often enhanced by batch blending to even out characteristics.In some cases synthetic aroma chemicals are added into the base oil to meet the required specification.This sort of practice may be frowned upon by pure aroma therapists but in perfumery, flavor and fragrance and pharmaceutical industries these practices are welcomed as they make the job of creating a reliable and mass-produce-able product much easier.
With the Eucalyptus oil example in mind it is important to note that like all markets the Essential Oil supply chain is value driven and will aim to source and supply products that represent the best value for the job at hand.That means in some cases an all-natural oil produced from a single location farm is actually not the best product for the job - it might be too costly, too variable in quality, too tight in supply or too variable in availability. As I have mentioned before, essential oils for essential oils sake are an important but small part of the supply chain with flavor and fragrance coming way ahead and followed secondly by industrial use (pharma, chemical industry, cleaning etc.) in some cases. Keep that in mind and go back to the market dynamics at the farm gate - a very small pool of key growing regions, managed (majority volume wise) by a few large farmers, sending crops for processing to a smaller number of oil distillers to send on to an even smaller group of export traders to place onto the open market. From there it makes sense that while there are many, many consumer brands of essential oil in the world, many of them will have bottled the same oil as their competitor, from the same supply chain, grown in the same farm, by the same farmer.
Of course, the essential oil industry isn't all big farms, there are boutique growers, home processors, wild harvesters, fair traders and community co-operatives but these groups generally don't make much of a dent on the overall tonnage globally traded.In addition, local independent farmers generally only have one shot at a batch of oil each season and are therefore much more affected by adverse weather, pest issues or practical distribution issues than larger operations that might own property across many locations.Further, these small farming groups may wish to wholesale their oil to an oil consolidator who buys up oil from many smallholdings and then on-sells the blended oil.This is not unreasonable and can make good business sense if the wholesale buyer has the skill and equipment to analyze and grade the oils.But this practice again makes it less likely that the aroma therapist is getting their 'field in a bottle' if that even matters.
The essential oil supply chain is full of interesting characters and stories; it can be both beautifully simple and mind-blowingly complex but never, ever boring.At New Directions we do our best to source single crop oils from known sources - a feat that is often, but not always possible.There are many misconceptions about the essential oil industry, one of the biggest being that the farmer 'farms' essential oils.We hope that this article has showed you ,that is just part of the story and we hope that knowing that has made the whole thing a lot more exciting for you.