new natural aromatic products:

Gurib c37.tex V1 - January 17, 2014 4:12 P.M. P. 505

37 New Natural Aromatic Products:Search, Evaluation and theDevelopment IssuesMurray HunterSchool of Business Innovation & Technoentrepreneurship, University Malaysia Perlis, Malaysia

37.1 Introduction

The search for, identification and development of new naturalaromatic materials is fraught with difficulties. Finding new materialsis an extremely time-consuming and expensive process. Identifyingthe potential usefulness as an aromatic material is complex. Finally,developing the material as a commercial product has many issuesinvolved, thus creating barriers. These costs and complexities aredepressing the general outlook for the future growth of naturalaromatic compounds usage in industry.

This chapter will define the family of natural aromatic materials,look at the search process for new materials, suggest a set of criteriato assist in evaluating commercial potential and, finally, look at someof the issues involved in commercial development.

37.2 The family of natural aromatic extracts

Natural aromatic materials can be extracted from the roots, rhi-zomes, wood, bark, leaves, stems, fruits, flowers and seeds, froma wide variety of plant, shrub and tree species. Different parts ofthe same plant may contain compounds that differ in their chem-ical composition, and may or may not require different methodsto extract these compounds effectively. Primarily, the extractionmethod used determines whether the aromatic extract is calledan essential oil, concrete, absolute, tincture, pomade, oleoresin orbalsam. These methods are summarized in Figure 37.1.

Essential oils result from extracting volatile compounds, mainlyterpenes and oxygenated compounds, through one of the methodsof distillation. The constituents of essential oils are synthesized inthe plant through the mevalonic and shikimic acid pathways assecondary metabolites, stored in glandular trichomes, oil cells orducts in plant tissue. The specific method of distillation used willdepend upon the characteristics of the aromatic materials present inthe plant, the structure of the plant material and the economics ofextraction. Three basic types of distillation exist: hydro-distillation,water and steam distillation, and steam distillation.

Other specialized extraction methods, like vacuum distillation,high-pressure distillation and destructive distillation, are used incertain cases, where specific conditions are required. For example,

Novel Plant Bioresources: Applications in Food, Medicine and Cosmetics, First Edition. Edited by Ameenah Gurib-Fakim.© 2014 John Wiley & Sons, Ltd. Published 2014 by John Wiley & Sons, Ltd.

low temperatures are sometimes needed to prevent highly volatilematerials from being destroyed or lost during distillation, so vac-uum distillation would be used. Where greater heat and pressureare needed to extract high boiling point volatile materials fromthe plant, high-pressure distillation can be used. Where the plantmaterial itself must be destroyed to remove volatiles, destructivedistillation can be used.

Other oils are produced from citrus fruits through a processcalled cold expression. Orange, lime or other citrus peels are presseduntil a fine spray of aromatic oil is released. This is specificallycalled an expressed oil. Cold expressed oils can be distilled undervacuum to remove the terpene hydrocarbons from the rest of theoxygenated components to produce what is called a terpeneless oil.The other resulting product is known as a terpene oil, terpenes orterpene tails.

Where aromatic materials are susceptible to chemical changes fromheat processes and this is undesirable, extraction can be undertakenthrough washing the plant material with a solvent in a method calledsolvent extraction. Petroleum ether, acetone, hexane or ethyl acetatecan be used to wash out specific plant materials, usually volatiles,pigments and waxes, into the solvent. Once the solvent has beenevaporated off through vacuum distillation, the remaining materialis called a concrete, or in some cases a resinoid. The volatile mate-rials can be further extracted from the concrete through washingthe material with alcohol and then removing the alcohol throughvacuum distillation. The remaining material is called an absolute.

Enfleurage is an old method of extracting aromatic materials fromplants, which is being revived in aromatherapy. Enfleurage involveslaying plant material on specially prepared fat and lard to absorbthe volatile materials. After a period of time the odorous material isextracted from the fat by heating. The material is then filtered fromthe solid particles, leaving a pomade. When the ethanol is distilledoff through vacuum distillation, the resulting product is called anabsolute.

The use of liquid carbon dioxide as a solvent under pressure toremove volatile plant substances is one of the newer methods ofextraction. Products produced from this process resemble naturevery closely as there is no heat involved. Carbon dioxide is aninert material, which does not promote any undesirable chemicalreactions. Natural materials extracted in this way are called CO2extracts.

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506 Novel Plant Bioresources: Applications in Food, Medicine and Cosmetics

Plant material

Expressedoil

Cold expression of citrus fruits

Terpeneless oil Terpene tails

Essential oil

Water, water & steam and steam

distillation

Absolute

Concrete

Solvent extraction

Washing with ethanol and vacuum distilling

ethanol away

Pomade

Enfleurage

Vacuum distill away the ethanol

Oleoresin

CO2extract

CO2 extraction

Figure 37.1 The various methods of natural material extraction and products

Very low and non-volatile aromatic materials that are present inwoods are extracted through a more complex form of solvent extrac-tion, which yields an oleoresin.

37.3 The search and screening process

Most search projects for new natural aromatic materials commencewith some form of preliminary screening process, either formalor informal. The aim of this process is to develop a short list ofprobable candidates for closer evaluation. Only flora that has somerealistic commercial potential should be included on the shortlist. This process involves simultaneous biological–environmentand commercial development potential evaluation. Adequate timeshould be allocated for the screening process.

Whether the screening process is restricted to desktop evaluationor involves some preliminary field work will depend upon availabletime, information and resources available. Without a proper screen-ing process there is risk that any future field research will be ad hocand lead to an unmarketable material due to technical, resourceand/or market reasons. Still today, many projects commence with-out any formal technical or market studies about crop feasibility(Gallagher, 1993).

The evaluation of essential oil market potential is only part of thetotal screening process. The screening process must also take intoaccount the limits imposed by the physical environment (climate,rainfall, soil, sunlight hours, soil type and pH, water holding capac-ity, drainage, topography, etc.) and production economies. All these

factors must be considered simultaneously. Lack of appreciationof the interdependence between production and market devel-opment has led to many failures by new producers (Green andHone, 1992).

The process of screening aromatic plants for development poten-tial is complex due to the multiplicity of issues – biological screeningand development potential evaluation. All factors must be found tobe compatible and potentially meet regulatory requirements, as theproduct must be able to achieve registration to be sold legally. Giventhat over 50 potential aromatic plants may be screened for potential,some system of handling the information in a manageable mannermust be devised. The more ordered and systematic the system tohandle the evaluation, the easier and more meaningful will be theprocess.

The first part of the screening process involves the creation of a listof crop possibilities that are both physically and market feasible. Thisinfers converging knowledge in two areas: agronomic and market.This can be approached by generating a list of crops that can be com-mercially produced in the selected geographical area in question.A comparison between potential crops and the physical character-istics of the selected potential geographical area can be checked offusing similar criteria listed in Table 37.1.

Direct comparisons between the physical conditions and poten-tial plant suitability will not always reveal all potential crops. Somecrops cultivated in subtropical climates may grow better in tropicalclimates, with more consistent weather and higher rainfall. Theremay be no data to support these possibilities, and the exercise willrely upon experience, hunches and educated guesses. This was the


37 New Natural Aromatic Products: Search, Evaluation and the Development Issues 507

Table 37.1 Comparison factors between potential cultivation site andpotential crop

Actual conditions Range of possible growingconditions for potential crop

• General climate• Range of microclimates• Topography that influences

microclimates• Rainfall range (access to

irrigation)• Temperature ranges• Daylight hours• Soil types• Soil characteristics (pH, humus

profile, soil layers, etc.)

• Preferred climate(s)• Preferred microclimates• Preferred topography• Preferred rainfall levels• Preferred temperature ranges• Preferred daylight hours• Preferred soil types• Preferred soil characteristics

case with Australian tea tree, originally cultivated in central andsouthern New South Wales, Australia. Trials in northern Queens-land, Australia, and Malaysia found that not only was the cropadaptable to tropical climates, but it also produced more biomass,leading to higher yields with a comparable oil quality to the originalarea of cultivation (Hunter, 1996).

An alternative way to look for potential crops is to examineexisting crops and plants already cultivated along similar latitudes,in the Southern and Northern Hemispheres. This way, possibilitiescan be looked at by region. This is also appropriate for specificgeographic areas where the micro-climate may be similar to theclimate at a different latitude; that is, at higher altitudes in tropicalareas where temperatures are lower than the lowlands. This is anothergood rough method of quickly creating a list of potential crops toexamine. Figure 37.2 shows the 44∘ latitudes, north and south of theEquator. One can see that many essential oil crops currently culti-vated in Tasmania and New Zealand are similar to those cultivatedin central Europe.

37.4 Sources of potential plant opportunityidentification

An active search for potential crops is the next step of the process.This can be achieved through field work (bio-prospecting) and/or adesktop search utilizing existing published data.

37.4.1 Bio-prospecting

The South-East Asia-Pacific region is abundant in flora, where themajority of species are yet to be examined for their economic poten-tial. In Malaysia alone, there are over 15 000 species of plants, ofwhich only around 1200 have been investigated (Latiff et al., 1984).On a global scale, of the 350 000 known plant species, less than 0.5%of them have been chemically investigated (Rao and Arora, 2004).Even with the flora that has already been investigated, much of thedata recorded and reported lacks any economic evaluation. Manybooks containing flora references and catalogues may be out of print,which will require some time and effort in locating copies.

There are many approaches to bio-prospecting. Forest and jungleareas can be systematically and blanket searched, where all aromaticplants are investigated that the team comes across. This approach willbe very time and resource consuming and may only lead to very long-term results. Alternatively, plants with specific characteristics andproperties identified in ethno-botanical literature are searched forin specific geographical locations in a bio-prospecting programme.

Decisions have to be made about the scope of screening. Screeningfor multiple characteristics is very complex and will increase timeand resources required. Potential screening protocols depend on theproject focus. Some of these would include:

• the chemical constituents of the plant oil (leaves, flowers, roots,bark, fruits, seeds, etc.);

• antimicrobial properties;• anti-inflammatory properties;• skin whitening properties;• UV absorbing properties;• anti-age properties;• flavour and fragrance application; and• aromatherapy application.

Latitudes 44° North & SouthFigure 37.2 The 44∘ latitude lines north and southof the Equator



37.4.2 Desktop studies

Potential new crops can be discovered through desktop studies. Thisrequires a literature search through books, periodicals, journals andother monographs pertaining to essential oil crops. Studies wouldinclude studies of plants cultivated in similar latitudes. The aspectslisted in Table 37.2 would be used to screen each potential possibility.

Through bio-prospecting and a desktop study, a list of potentialcrops can be developed. The next step is to eliminate plants of littlepotential until a short list is obtained.

37.4.3 Screening for development potential

The major question in screening for development potential is,‘What value does the potential natural aromatic material have forany industry?’ This question can be understood better throughevaluating each possibility with a series of sub-questions, answeredwith existing reported data on each material. These questions wouldinclude, for example:

• What are the chemical constituents?• Are these chemical constituents similar to other natural materials?• Is the odour profile of any value?• Is this a similar odour profile to other materials?

These questions and corresponding answers should provide someclue as to whether the essential oil is of interest and has any potentialapplication in industry.

If there are some potential applications, the next set of questionswould relate to potential yields and probable cost of development.If the reviewed material is similar to something already existingcommercially, then the questions will relate to relative yields,growth periods and percentage of valuable constituents in the oils.If the material is novel and contains potentially valuable chemicalconstituents or interesting odour profile, what would be the poten-tial yields? At this stage these estimates should be rough or very‘ball park’ based on what published data are available or throughobservation and sample distillations of the plant, extended out ona worksheet. A simple template can be used for manipulating veryrough labour, operational and yield estimates. A sample templatefor this calculation is shown in Table 37.2.

After undertaking the above exercise, some ideas on potential andcritical issues should be understood and answered in some sort ofpreliminary manner. These issues are:

• Is there a match between chemical constituents and possible mar-ket uses?

• What is the application potential of the essential oil?• What could be possible yields and cost of production?• What would be the cost of development?

37.5 The characteristics and classificationof natural aromatic materials

Natural aromatic materials have many of the characteristics of com-modities, but are by no means a homogeneous group of products.Trade statistics indicate the market size for many individual aro-matic materials, but they may not be complete and thus of limited

use in evaluating essential oil potential. To evaluate the commercialpotential of new essential oils, a market orientation (i.e., potentialuses, characteristics, product strengths and weaknesses) is required,rather than a commodity view of the essential-oil trade. Some basicclassification system is necessary to use as a tool for evaluating devel-opment potential and to indicate the types of business strategiesrequired. A basic classification system is outlined in Table 37.3.

Group 1. The olfactory profiles of aromatic materials in thisgroup are dominated by a single or a few major constituents. Theproduction of many essential oils in this group relies on high capitalinvestment and mechanization as the key to competitive advantage.The mint industry in the USA is a good example of this (Borst, 1988).Other essential oil crops in this group are produced by smallholdersin developing countries. The smallholder production sector has onlysurvived because the cultivation of certain essential oils is not prof-itable in industrialized countries, full mechanization is not possibleand cultivation of some plant species is only possible a few monthseach year (Verlet, 1993a). The citronella industry in Indonesia isalso a good example (Harris, 1987). Prices in this group of essen-tial oils are kept relatively low due to the availability of substitutes(other essential oils and synthetic aroma chemicals) and competitionbetween producers of the same crop in developing countries.

Group 2. Most aromatic materials in this group are producedby smallholders in developing countries along the tropical latitudes.Some are produced on plantations, with low-cost labour supplyas a source of competitive advantage, but labour shortages due torural/urban migration are beginning to erode many producers’competitive positions (Ministry of Agriculture, 1991). Fluctuationsin prices occur when there is a mismatch of supply and demand onthe world market. Generally, in times of supply shortages, higherprices will encourage existing producers to increase production andmarginal growers will be attracted back into production. High pricesand shortages of essential oils in this group may not necessarilyindicate potential opportunities to develop these materials in newgeographical locations, as existing producer countries can easilyincrease production levels (Robbins, 1982). There are generallyvery low barriers to entry and exit to producers within this group.There are also few cost-effective substitutes available to the flavourand fragrance industry in this group. This lack of close substitutesenables producers to gain slightly higher marginal returns for theseoils compared with those in the first group (Hunter, 1992). However,with rapid technology advances, substitutes for these materials arebecoming available.

Group 3. Natural aromatic materials in this group are primarilyused in perfumery. These materials are valued for their depth,quality, complexity and richness in olfactory profile. Many of thesematerials are still traditionally cultivated (Konur and Robertet,1983). However, as production costs are rising in developed coun-tries, the production of these materials is being encouraged indeveloping countries (Anon., 1993), often under the sponsorshipand close working relationships with major European companies(McKay, 1990). Generally, these materials are becoming too expen-sive to use in functional perfumery, where reconstitutions andspecialties have mostly replaced them (Fenn, 1988). Herbaceousoils are limited to minor use in flavour compounds (Robbins andGreenhalgh, 1979). Changing market trends have increased theapplication of some herbaceous oils in fragrance applications, butaggregate demand is not increasing above natural market growth.



Table 37.2 Worksheet for rough calculation of financial viability at initial screening stage

1. Costs of crop domestication• Can they potential crop be domesticated into field production easily?• If not, will biomass be wild-collected?• What method would be most suitable for propagation: from seed, cuttings, tissue culture, other?• Does nursery propagation of the potential crop require any other special care?• What staffing will be required?• What would be the approximate costs of achieving the above?

2. Field preparation and infrastructure• What overall infrastructure will be needed (i.e. nursery, road access, fencing, outbuildings, farming equipment, etc.)?• What land preparation is needed (land levelling and contouring, drainage, etc.)?• Does the crop require large amounts of water to thrive during growth?• Is there adequate water available through rainfall to satisfy this?• Will irrigation be required? If so, what method? Will dams and catchment areas have to be constructed to ensure a plentiful water supply?• What will be the approximate costs of this?• Are there any other potential costs?

3. Planting and maintenance• Approximately how long will the crop take from field planting to harvest maturity?• How will the potential crop be planted (manually/automated)? What will be the costs involved?• What would the approximate planting density be?• Will nutrients have to be applied? If so, how regularly? How much? What method will be used to apply them? What will be the approximate

costs of this?• How often are replantings required? After each harvest, after a number of seasons, after how many years, what are the costs involved to prepare

for each replanting?4. Harvesting, extraction and post-extraction

• Is harvest timing crucial (i.e. a time of day, a very short window in a particular month, etc.)?• What are the costs involved in achieving this harvest window?• What method of harvest will be utilized (manual, semi-mechanized, fully mechanized)?• What would be the approximate costs of building the harvest equipment?• What method of extraction will be required (hydro-distillation, steam distillation, destructive distillation, vacuum distillation, solvent extrac-

tion, other)?• What power sources will be utilized? What are their costs?• How will spent biomass be dealt with? Does it have any economic value or can it be used back in the farming process?• Is the technology understood for the above processes? If not, what will be the costs of acquiring it?• What will be the fabrication costs to build the above?• What regulations (i.e. EPA) are relevant to the processes? And how much will development and compliance cost?• Will specialist staff be required?• What would the approximate cost of energy to oil yield?

5. Estimated (guessed) project size and yields• How many hectares do you anticipate to cultivate?• How many years will it take to achieve this?• What (based on literature and other knowledge) would be the approximate biomass per hectare achievable (minimum and maximum esti-

mates)?• Does the biomass have to be wilted, stored or otherwise processed before extraction?• What would be the yield as a percentage of biomass after extraction?

6. Estimated financial viability• 1. Research costs =• 2. Costs of crop domestication =• 3. Field preparation and infrastructure costs =• 4. Propagation, planting and maintenance costs =• 5. Harvesting, extraction and post-extraction costs =• Total capital costs (1 + 3) =• Total operational costs (2 + 4 + 5) =• Total amount of oil yielded =• Total oil value =• Value − total operational costs =• Return/total capital costs × 100 = Return on investment

Notes: This is a rough estimate based on the whole project cost estimates. Alternatively, this can be calculated on a hectare basis. Allowances must bemade for varying yields on some crops (especially tree crops).



Table 37.3 A basic natural aromatic material classification scheme

Group Characteristics Examples Uses

1. Flavour/odour profile dueto one or few majorconstituents

• Usually high volume/low- to medium-value products.

• Level of chemical constituents very importantin trade

• Synthetic aroma chemicals usually good sub-stitutes

• Peppermint oil• Lemongrass oil• Some citrus oils• Eucalyptus oils• Clove oils

• Perfume and flavour compounds• Flavours where natural status is

desired• Some citrus oils used for cleaning sol-

vents• Isolation of natural aroma chemicals,

e.g. eugenol from clove oil2. Flavour/odour profile due

to one or a few majorconstituents and essentialoil cannot be easilyreconstituted

• Usually medium- to high-volume, medium-priced oils

• Olfactory and flavour characteristics moreimportant in purchase decisions

• Difficult to reconstitute

• Vetiver oil• Sandalwood oil• Patchouli oil

• Perfumery and flavour compounds(both functional and fine perfumery)

3. Character from mainconstituents, but richnessand complexity fromminor constituents

• Usually low-volume/high-priced oils• Olfactory characteristics important in pur-

chase decisions and pricing• In most cases these oils can be reconstituted

efficiently

• Rose oil• Jasmine absolute• Many herb oils

• Fine perfumery• Reconstitutions used for functional

perfumes• Limited flavour use• Majority of herb oils used for flavours

but beginning to be used for fra-grances

4. None of the mainconstituents contributedecisively to the desiredodour/flavour profile

• Usually low-volume/high-priced oils• Olfactory characteristics most important in

purchase decisions• In most cases reconstitutions can be pro-

duced

• Mimosa absolute • Fine perfumery (usually too expen-sive for functional products)

Group 4. Natural aromatic materials in this group, like materialsin Group 3, are valued for their olfactory profile and are mainly tra-ditionally produced, although some new ventures are utilizing newtechnologies to enable competitive production. The availability ofgood reconstitutions of these materials has limited their use to fineperfumery applications.

Aromatic materials in Groups 1 and 2 tend to be traded likepseudo-commodities, but strong product differentiation, based onolfactory profiles, is also an important purchasing criteria. Otherindustrial uses for many of these oils add to traded volumes. Essen-tial oils in Groups 3 and 4 are traded more like specialty and finechemical products, where olfactory quality plays a major role inprice determination. Demand tends to be inelastic in the short term,as manufacturers are locked into using selected essential oils inthe formulation of existing products. Past price trends and a poorsupply history for some individual oils has encouraged the use ofalternative materials in new products.

The above classification system can be used to generally identifynatural aromatic material use and trade characteristics. This estab-lishes a structure from where further specific market analysis can beundertaken.

37.6 Evaluating the characteristic strengthsand weaknesses of natural aromaticmaterials

The market potential of a new natural aromatic materials in theflavor and fragrance industry depends upon potential flavor and

fragrance applications. The scope of potential uses and applicationsdirectly corresponds to the characteristic strengths and weaknessesof the essential oil. After the objective identification of characteristicstrengths and weaknesses, estimates of the essential oil’s perceivedvalue to potential end users can be made. The list in Table 37.4provides criteria to evaluate new essential oils.

37.7 The development issues

The essential oil industry faces a number of major issues andchallenges, including climate change and the food and economiccrises. Other important issues the industry is facing include wildplant collection, the bargaining power of producers, the regulatorysystem, the rural crisis, the synthesis of natural aromatic moleculesand patents, research and sustainability. These issues are discussedbriefly in the following sections.

37.7.1 Global warming, and the food and financialcrises

Three major issues, climate change and the food and economic crisesform a great part of the underlying general environment that the nat-ural aromatic material industry must exist and operate within. Issuesgenerated by climate change and the food and economic crises areextremely complex and subject to intense debate and analysis, bothscientifically and politically. Figure 37.3 depicts some of the under-lying issues and challenges to the industry from climate change andthe food and economic crises.



Table 37.4 Characteristic strength and weakness potential for natural aromatic materials

Characteristic Comments

The novelty of a new aromaticmaterial

The major factor determining the novelty is the perceived uniqueness of the material’s organoleptic profile.Thus, the degree of novelty is limited by the closeness of potential substitutes. The concept of noveltyextends to essential oils that are more cost-effective sources of natural aroma chemicals. New naturalsources of aroma chemicals would also fit into this criterion of novelty.

The potential uses and applicationsof a new aromatic material

Without perfumers and flavourists perceiving applications potential, a new material will remain in the realmof curiosity. Time, effort and imagination on the part of perfumers and flavourists is required to discoveruseful applications for new essential oils. It is under this criteria that most new essential oils will struggle tofind acceptance as a new aromatic material.

The closeness of any substitutes It is difficult to find materials that cannot be duplicated by reconstitutions. New essential oils with closesubstitutes are of little value to the flavour and fragrance industry, unless they can offer a significant cost orstability advantage. The only exception is when a new material is a source of a natural aroma material.

The stability of a new aromaticmaterial

One of the major problems associated with aromatic materials is stability in end products. Many processedfood products undergo harsh cooking procedures during manufacture. Cosmetic bases often contain freefatty acids, even after neutralization. Aromatic materials that contain high levels of terpenes tend topolymerize on exposure to light and air, discolour end products or are not stable in alkaline or acidicmedia. Synthetic aroma chemicals and specialties are generally more stable than natural materials and usedmore extensively in functional perfumery.

The cost price/performance ratio The cost price/performance ratio is important to the application potential of a new material. If a new essentialoil does not offer a perceptible odour/flavour at a low concentration, then its value to the flavour andfragrance industry is greatly diminished unless it is very cheap. Poor performance under this criterion willnegate the potential of most new materials for application in functional perfumery.

The toxicity The cost of proving a new material is safe to use in flavours and fragrances is a major obstacle to thedevelopment of new aromatic materials. The industry has an impeccable reputation for self-regulation, andadded EU regulations increase the cost of preparing dossiers on new materials even more. In marketsoutside the EU, most international flavour and fragrance houses would not consider using a new essentialoil unless it meets International Fragrance Association (IFRA) safety and toxicity recommendations and isincluded on the Generally Recognized as Safe list.

The general consistency of qualityand supply

Natural materials will vary in quality according to geographic origin, type of soil, level of nutrients in the soil,climate and weather, rainfall, time of harvest, season, method of extraction, altitude and the incidence ofpests and diseases. Likewise, there are risks with continual supply of natural materials because of adverseweather conditions, changes in climate, floods and other natural disasters, wars, political upheavals and theinexperience of new producers. Launching new consumer products requires large investments on the partof the end-product manufacturer. Flavour and fragrance houses do not want to be placed in a position ofbeing unable to supply a manufacturer with a flavour or fragrance compound because of the unavailabilityof a raw material.

The prevailing market/producttrends

Market and product trends slowly evolve. Changes in market trends are the result of complex forces, includingtechnology (which makes new trends possible), advertising, and cultural influences upon consumer tastesand preferences. A particular essential oil may become more or less important to the flavour and fragranceindustry, depending upon these trends.

The current level of technology New technology advances influence the value of existing aromatic materials to the flavour and fragranceindustry. The development of new essential oil reconstitutions is aimed at eliminating some of the potentialtoxicity and solubility problems of existing materials. Reconstitutions are generally more stable and cheaperthan their more expensive natural counterparts. As better and more cost-effective reconstitutions aredeveloped in the future, the use of some essential oils will decline. Since the advent of more sophisticatedanalytical techniques, like gas chromatography–mass spectrometry, headspace analysis, electronic noses,aroma chemical and specialty product manufacturers have been better able to isolate powerful aromaticmolecules from essential oils and synthesize these compounds. The discovery of new aroma chemicals inessential oils due to increased equipment sensitivity is more likely to lead to synthesis rather thancultivation.

Population growth requires a corresponding increase in theproduction of goods and services to meet growing consumptiondemands (needs and wants). Rapid population growth is increas-ing consumption, leading to higher rates of production, whichincreases carbon dioxide emissions. The growing carbon dioxidetraps infra-red radiation in the atmosphere, rather than allowingit to escape back into outer space. This creates a condition where

the atmospheric temperature will slowly rise. The increase inatmospheric temperature creates a number of secondary effects,including altering weather and tidal patterns, which in turn causefloods, droughts, heat waves and cold snaps. These secondary effectsgive rise to changing pest and disease cycles, faster loss of top soilsdue to adverse weather and the increase of arid land area. Continuedwarming is melting the land-based ice caps, which cause rising sea



CO2 emissions

Resource depletion Global warming

ChangedWeatherPatterns

Declineof arable

land

Temp.increase

Sealevelsrise

Decline ofeco-systembiodiversity,

andsustainability

Pests anddiseases

DroughtsFloods

Food crisis

Decliningproductivity

AlternativeLand use

Rising costs

Urbanisation

Unstable production

Lack of finance forproduction

Populationgrowth

Production

Growingunemployment

Consumption Loss of confidence

andconsumption

Bank liquidity

Figure 37.3 Some of the underlying challenges on the natural aromatic material industry from climate change, the food and economic crisis

levels. The results of these environmental activities are an increasein the incidence of crop failures.

Mankind’s unsustainable production practices at our current stateof technology are leading to the depletion of the Earth’s naturalresources to the point where some may become extremely scarce.This is also leading to the decline of biodiversity. This causes the costof production to rise due to the need to use more inputs per unitof output. There are also increasing levels of outright crop failures.Food costs are further heightened through the rising costs of landdue to greater urbanization and industrialization, the shortage oflabour and increasing operational costs.

In 2008, US housing prices rose to the point where they reacheda peak and began to collapse. Prices started to decrease to the pointwhere housing mortgage equity was not supported by equity in thehouse values. When many borrowers defaulted on their repaymentsand banks could not recover their loans through mortgage auc-tions, a liquidity crisis began. Banks cut lending to manufacturersand retailers, which need liquidity to operate. This led to a loss ofconfidence, decline in consumption and corresponding decline inproduction and worker lay-offs. The loss of confidence, increasingunemployment and corresponding credit squeeze started a down-ward spiral in demand, production and consumption leading intodeep recession.

Through the interrelated world economy, the effects of the USliquidity and confidence crisis spread to Europe and Japan. Euro-pean banks have lent money to banks in the USA and southernEurope where there is risk of major loan defaults due to theseeconomies’ shrinking economic activity. Decreasing consumptionin developed countries is leading to lower product orders from

Asian manufacturers. The crisis spread to the Asian region, wherethere were risks that unemployment would rise.

There are concerns due to the wide extent of this global economiccrisis that the issues of climate change and food scarcity will be putinto the background by governments at a time where many believethey cannot be ignored.

Global warming and the food and economic crises are alreadyaffecting the production of natural aromatic materials in a numberof ways. Global warming increases the incidence of risk in generalagricultural production. As regions become warmer, droughts setin and seasons change, some areas will become unsuitable for theproduction of certain essential oils, while other areas will becomesuitable. Agronomic practices will have to take account of the tech-nical issues brought about from the effects of global warming. Theglobal economic crisis will challenge the stewardship of business.The marketing of aromatic materials will take place in markets thatare declining, rather than growing. The funding of natural productresearch and production will also be expected to decline because ofthe financial crisis.

Some of the basic issues underlining the food crisis are also rel-evant to natural product production. Natural products will have tocompete for land against other potential land uses. This means thatnatural products must make a higher return per unit of land thanfood crops for farmers to be enticed to cultivate them. This will meanhigher prices for natural aromatic materials in years to come.

37.7.2 Market turbulence

Like other commodities, natural aromatic materials are subjectedto price fluctuations. This is the result of mismatches in supply



and demand, particularly on the supply side. As natural aromaticmaterials are basically agricultural products, they are affected byadverse weather, especially heat, droughts, natural disasters, pestand diseases, labour shortages and competition for land use. Theattraction of other crops also causes supply problems (e.g. sugarcaneproduction in Brazil).

The situation for a number of natural products over the last fewyears has proved no exception, where a number of oils have sufferedsupply problems. There have been shortages of aniseed oil (weather),bergamot oil (weather), coriander oil (seeds used for spice as pricesmore attractive), dill and fennel oils (excessively warm weather),geranium oil (farmers switched to growing food crops), lavenderand lavendin oils (excessively warm weather), lemon oil (weather),Litsea cubeba oil (shortage of labour), and rose oil (shortage oflabour during harvests).

Sometimes price fluctuations and supply shortages are enoughto force customers to switch to substitutes. This has happened toa number of essential oils, which became priced out of the marketor the shortage forced cessation of product use. Tea tree oil wasdiscontinued as a product line in some European retail chains in2005, when there were chronic shortages of supply (Bolt, 2000).Patchouli oil was replaced by many users in fragrance formulationswith synthetic aroma chemicals that are cheaper and stable in price.Shortages of Litsea cubeba oil encouraged the use of synthetic citral.The rising price of sandalwood will encourage the use of syntheticalternatives, which may leave only a small remaining market for finefragrance use, if confidence is lost in supply by the majority of users.There has also been a drastic decline of essential oils that are relianton wild collection. Natural product price fluctuations can threatenthe long-term usage of an essential oil and force substitution to alow-cost mix of stable synthetic substitutes.

Other factors that cause market turbulence include the rise in theprice of petroleum, which increases the costs of distillation. Someoils, like ylang-ylang, require over 20 h of distillation, and clove budrequires 48–50 h. Thus, diesel and bunker fuel is not a minor costin the production of the oils. Steel prices are increasing, making thecosts of drums go up, China is tightening environmental regulationsand urbanization is creating shortages of rural labour. Adulterationof essential oils is still of great concern. There are still a number ofcases of adulteration of essential oils, which cause concern and lossof integrity in the marketplace.

37.7.3 Wild collection and threatened plantspecies

There are between 300 and 400 natural aromatic materials, includ-ing essential oils, concretes, absolutes, resins, oleoresins and balsams,available commercially in the market. Almost 50% of these materi-als are extracted from trees that are hundreds of years old or rareplants that cannot be easily domesticated (Lawrence, 1993). Theseare collected from the forests, jungles and bush lands around theworld. This raises the issue of sustainability. Over the last few decadesa number of flora species have become threatened with potentialextinction, due to over harvesting.

The pricing mechanism heavily influences what happens in wildplant collection. When prices are high, two major things can happen.

The initial response is often a frenzy of collection by various collec-tors, which results in harvests well above demand levels. This reckless

manner usually occurs because of lack of law enforcement in remoteareas that fails to preserve stocks of the species for future harvesting.

Second, if the plant can be domesticated, entrepreneurs willcommence planting of the crop. For example, supply shortages andcontinued high prices have encouraged a large number of people tocultivate both Aquilaria and Santalum species. This will most likelylead to a massive oversupply situation in the future.

The Convention on International Trade in Endangered Species ofWild Fauna and Flora (CITES) is an intergovernmental agreementratified by 189 nations under the International Union for the Conser-vation of Natural Resources (IUCN), which compiles a list of threat-ened species that should not be traded. Table 37.5 shows a list ofpotentially endangered species relevant to the aromatic trade. List-ing plant species as endangered is one issue; enforcement is another,as many of these endangered species are still traded in significantquantities (Burfield, 2008).

The harvesting of wild plants often involves travelling over diffi-cult terrain to collect material and process it into an essential oil oraromatic extract. The supply of wild plant material is unstable andsubject to both natural interventions and regulation. Wild collectionin the majority of cases is difficult to regulate (www.cropwatch.org)and ensure sustainability.

37.7.4 Bargaining power of producers

Approximately 55% of the world’s natural aromatic materials comefrom developing countries (Verlet, 1993b), particularly those coun-tries along the tropical belt. The vast majority of producers in theseregions are subsistence farmers who suffer from poor yields, poorquality, unfavourable economics and markets outside of their con-trol. The power of producers to influence price in the market doesnot exist, particularly where producers of one geographic region alsocompete against producers from other geographical regions. To sur-vive, subsistence farmers must skillfully decide which crops to culti-vate, so their income is maximized. However, when large numbers offarmers receive the same information, aggregate overresponses usu-ally occur through dramatic increases or decreases in production.This creates large price fluctuations and variances in income. Wherecrops are perennial, producers have no choice but to continue in themarket and take what price is offered, unless they decide to get outof production completely.

The longer the supply chain is, the less influence the producer willhave over it. Traders act on behalf of a large group of fragmented pro-ducers from remote locations, thus exercising great power over pro-ducers. The supply chain can be manipulated by hoarding stocks andwaiting until prices rise, allowing the sell off of stocks at large profits.How widespread this practice is unknown. There are few organiza-tions that represent the true interests of the producer; most representthe interests of traders.

The ethics of purchasing from primary producers in the supplychain is now an important issue among many companies. Somelarge companies have set up community projects in developingcountries with ethical supply chains. A number of non-governmentinternational agencies have put in large efforts to shorten the supplychains so that sellers can deal directly with buyers or with inter-mediaries on agreed buyer–seller charters through programmeslike Fair-trade. These moves are aimed at bringing equity intobuyer–seller relationships.



Table 37.5 A list of potentially endangered aromatic flora species

Common and botanical name Location Status Use and comments

Chinese rice flower, Aglaiaodorata (Lour.)

China, Cambodia, Laos,Myanmar

IUCN red list of threatenedspecies in 2007

A flower oil and absolute used infine perfumery

West Indian sandalwood,Amyris balsamifera L.

Florida, Belize, Costa Rica,Haiti, Honduras,Nicaragua, Cuba, Jamaica,Puerto Rio, Venezuela,Colombia, Ecuador

Predicted to disappearbecause ofoverexploitation (Joulain,1994)

Limited use in soap and deodorantperfumery

Aniseed myrtle, Backhousiaanistata

Australia, in north-east NSW Species has a very smallgeographic range of100 km (Briggs and Leigh,1995)

Very minor quantities sold foraromatherapy use. Some smallcultivation is going on

Agarwood, various Aquilariaspp.

Over the forests and junglesof South-East Asia

Most species listed on CITESAppendix II.a A.banaensae, A. beccariana,A. crassna, A. cumingiana,A. hirta, A. malaccensis, A.microcarpa, A. rostrata,and A. sinensis, on IUCNred list of threatenedspecies in 2007

Sold as an incense material andessential oil for fine perfumery.Large plantations beingdeveloped in Vietnam, Thailand,Laos, Malaysia and Indonesia.Human infected wood said not tobe as good quality as naturallyinfected wood

Wormwood, various Artemisiaspecies

Europe Considered rare Essential oil of A. gracilis used as aflavour in a local Europeanliqueur genipi

Asafoetida, Ferula assa-foetida L.

Iran Stocks deteriorating due tounsustainable exploitation

Used as a material in savouryflavours

Boldo, Peumus boldus Molina South America Local authorities restrictingexploitation

Leaves produce an essential oil usedin flavours (FDA approved).

Buchu leaf, Agathosmabetulina

South Africa Vulnerable stocks in thewild, due to harvesting foroil and tea, diminishinghabitat (Hoegler, 2000)

Essential oil used in flavouring forblackcurrant flavours. Also usedin fine perfumery. Now acultivated crop

Holy weed, Bursera glabrifolia Mexico Overharvesting threateningexistence of species (Peteret al., 2003).

Now an essential oil of minorimportance

Calamus, Acorus calamus L. Widely distributedthroughout Europe andIndia, also in South-EastAsia

Becoming rare in India(CIMAP, 1997), butvariety of opinion as towhether should berestricted due to widedistribution

Essential oil from rhizome.Employed as a traditional incenseoil. Also used as a flavouringredient, although restrictedb

use by EU food regulations (EEC,1991)

Candeia plant, Eremanthuserthropappus (DC)MacLeish, Vanillosmopsisarborea (Aguiar) Ducke

Found in the AtlanticBrazilian rainforest

The tree is becoming raredue to exploitation

The wood is a source of(−)-α-bisabolol (Lopes et al.,1991)

Canarium zeylanicum (Retz.)Blume

Sri Lanka IUCN red list of threatenedspecies 2007

Used as an oleoresin for incense

Cedarwood Atlas, Cedrusatlantica (Endl.) Manetti exCarr

At 1500–2500 m altitude inAtlas Mountains, Morocco

IUCN red list of threatenedspecies 2007. Productionhas declined substantially

Essential oil produced from wastewood. An absolute is alsoproduced

Cedarwood Himalayan,Cedrus deodora

Above 2000 m on the slopesof the HimalayanMountains fromAfghanistan to Pakistan.


Crude and rectified oils fromsawdust and wood shavings, anabsolute and a fir needle oilavailable. Production hasdecreased dramatically to almostnothing. Also used inaromatherapy, perfumery and aproduct extracted throughdestructive distillation as aveterinary medicine



Table 37.5 (Continued)


Cedarwood Kenyan, Juniperusprocera Hochst ex Endl.

1000–3000 m range alongthe mountains of Kenya,and Ethiopia. Also inother African countriesand Saudi Arabia, Somalia


A now almost unattainable essentialoil. Species suffered from insectinfestations and dieback (Ciesla,2002)

Cigar box wood, Cedrelaodorata L.

South and Central America Illegal export in manycountries but tradecontinuing

A wood essential oil

Cinnamomum spp.Cinnamomum camphora L.var. linaloolifera,Cinnamomum camphoraSieb var. glavescens Hayata(ho wood)

China and India IUCN red list, Chineseauthorities ban harvesting

Rectified crude oil producesho-wood oil, which is used as asource of linalool, acetylated oilproduced through esterificationwith acetic anhydride used toreconstitute some essential oilsand extend lavender oil. Alsoused a natural linalyl acetate

Cinnamomum parthenoxylon(Jack) Meisn.

Vietnam and China IUCN red list of threatenedspecies in 2007, Chineseauthorities ban harvesting

As a source of safrole (>95%),which is used to producepiperonyl butoxide

Tejpat oil, Cinnamomumtamala,

Northern India Overexploitation of species Essential oil from steam distillationof the leaves

Opoponax, Commiphora spp. Ethiopia, Eritrea, Kenya,Somalia, also species inIndia


A source of opoponax, resin exudesfrom the bark naturally, but canbe collected through makingincisions. Also has numerousmedicinal uses

Copaiba spp. C. reticulate, C.guianensis, C. multijuga andC. officinalis

Rainforests in Brazil Threatened by logging(Plowden, 2003)

Used as a fixative in perfumery

Costus, Saussurea lappa C.B.Clarke

India and China Critically endangered andlisted as a negative exportby the Ministry ofCommerce, India. Somecultivation occurring(Guha and Pramanaik,2005)

Essential oil of roots and plant,concrete and resinoid from roots.Material banned by IFRA for usein cosmetics. Now used foraromatherapy

Elemi, Canarium luzonicum Indonesia, Philippines,Pacific Islands and PapuaNew Guinea


Essential oil distilled from thepathological resin of the tree. AlsoCO2 extracts produced, probablyin Europe. Used in perfumery

Canadian fir balsam, Abiesbalsamea (L.) Mill.

Canada IUCN red list of threatenedspecies in 2007

Essential oil distilled from theneedles and twigs of the tree.Used in perfumery and as avarnish

Silver fir, Abies alba (L.) Mill. Northern Europe IUCN red list of threatenedspecies in 2007

Oil distilled from cones, needles andtwigs and used for pine-typefragrances

Galbanum, Ferula gummosaBoiss

Pakistan, Turkmenistan,Iran, and India

Overexploitation Gum exported to Europe, oildistilled from gum for perfumeryuse

Gaultheria fragrantissma Wall.(wintergreen)

India, Himalayas, China,Java

Overexploitation Medicinal and perfumery use

Gentiana spp. Gentiana luteraL.

Central Europe, also France,Spain, Turkey, Albaniaand Romania

Overexploitation, wildharvesting banned inSpain

An absolute developed from theroots for flavouring

Ginger lily, Hedychiumcoronarium Koenig

Himalayas, throughoutSouth-East Asia, India,China and Hawaii

Overcollection in India Used as an essential oil in perfumery

(continued)





Gonystylus spp. South-East Asia IUCN red list of threatenedspecies in 2007

These trees produce a lower qualityof gaharu than the Aquilaria spp.

Gurjun, Dipterpcarpus spp. A number of speciesthroughout South-EastAsia

Logging has dwindled treepopulations extensively.IUCN red list ofthreatened species in 2007

Essential oil obtained from steam orvacuum distillation of the resin

Hinoki wood, Chamaecyparisobtuse (Siebold & Zucc.)Endl.

Japan Protected by JapaneseGovernment, IUCN redlist of threatened speciesin 2007

Essential oil from sawdust, wasteand off-cuts. There are also rootand leaf oils

Spanish juniper, Juniperustrurifera L.

Morocco, Algeria, Spain andCorsica


A rare oil used for leathery notes inperfumery

Juniperus spp. J. oxycedrus Mediterranean Europe,Portugal, France,Morocco, Iran


Cade oil is obtained fromdestructive distillation of thewood and branches of the shrub

Kaempferia spp., K. galangaland K. rotunda

Throughout East andSouth-East Asia

Becoming overexploited andfacing extinction (Swapnaet al., 2004). On negativeexport list of Ministry ofTrade, India

Essential oil of K. galangal usedlocally in hair washes, etc.(Selvam and Bandyopadhyay,2005)

Spiked ginger-lily, Hedychiumspicatum Smith

India, Nepal, Malaysia andJapan

Overexploited Essential oil produced from thedried tuber roots, used in limitedamounts in perfumery

Brazilian sassafras, Ocoteapretiosa (Nees) Mez.

Brazil and Paraguay Logging seriouslythreatening this species

As a source of safarole now largelyreplaced by exploitation ofCinnamomum parthenoxylon inVietnam

Olibanum, Boswellia carterii Somalia, Oman and Yemen Overexploited and damageddue to unskilledcollection, result ofclearing for agriculture.IUCN list of threatenedspecies 2007

Trees tapped for resin whereessential oil is distilled from dryresin. An absolute and resinoidalso produced. Used in fineperfumery

Pinus spp. P. cembra L., P.roxburghii Sarg., P. merkusii,P. radiata, P. menziesii, P.pumila, P. silvestris, P.sibirica, P. eliotii, P. strobus

Europe, Russia, USA,Canada, India, Pakistanand Himalayas


Gum oleoresins and turpentine oil.Also twigs, needles and cones ofsome species distilled for pineneedle oils, similar to Abies oils

Prostanthera spp., P.rotundifolia, P. granitica, P.askania, P. hindii, P. junonis,P. palustres

Tasmania, Victoria and NewSouth Wales in Australiaand New Zealand


Very small production in Australiafor aromatherapy

Ravensara anisata Madagascar Threatened byoverproduction (damageddone by removing bark)

Essential oil distilled from bark

Rosewood, Aniba spp., A.rosaeodora, A. fragrans, A.canelilla, A. parviflora

Brazil, Colombia, Ecuador,French Guiana, Guyana,Peru, Suriname, Venezuela

Gross overexploitation(Margolis, 2004). IUCNred list of threatenedspecies 2007

The wood chips are steam distilled.Used in perfumery

Australian sandalwood,Santalum spictum

Northern and WesternAustralia

Exhausted through wildcollection (Woodall andRobinson, 2003)

Used in perfumery but not of samequality as East Indian sandalwood

East African sandalwood,Osyris lanceolata Hochst &Steud.

Tanzania, Algeria,Zimbabwe, Swaziland

Protected species inTanzania since 2005

Essential oil and CO2 extract usedin perfumery





East Indian sandalwood,Santalum album

India, Timor-Leste, someIndian Ocean islands,Indonesia, Philippines,Australia. Also introducedinto China, Sri Lanka andTaiwan

IUCN red list of threatenedspecies 2007

Essential oil used in fine fragrance.Availability has droppeddramatically

New Caledonian sandalwood,Santalum austrocaledonicumViell. var austrocaledonicum

New Caledonia Nearly depleted, someproduction under control(Robson, 2004)

Used in cosmetics and finefragrances

Shorea robusta Gaertn.f. Nepal. Also other species inIndia, Thailand,Cambodia and Laos,Indonesia and Malaysia

Harvesting banned in Nepal A gum is exuded from the stem.Sawdust and resin from the treeused to manufacture joss sticks

Siam wood, Fokienia hodginsii China, Vietnam, Laos IUCN red list of threatenedspecies

Used as a wood source for furniture.Essential oil is distilled fromoff-cuts and sawdust

Spruce, Picea albies and P.mariana

P. abies distributed overcentral and northernEurope, P. mariana overUSA and Canada


Needle and twigs distilled foressential oil used in perfumery

Styrax, Liquidambar styraciflua USA, Belize, Guatemala,Honduras, Mexico,Nicaragua


Oleoresin produced in Hondurasand vacuum distilled to producestyrax oil. Resinoid used as afixative in perfumery

Thymus spp. Mostly collected from thewild in Spain

Protected under Spanish lawand quantities producedare declining, but does notinclude all species

Used as a flavour material

aCITES Appendix II items can be commercially traded, subject to strict monitoring (i.e. export permit).bThe maximum permitted level of β-asarone in food is 0.1 mg/kg and 1 mg/kg for alcoholic drinks.

Large natural aromatic material producers focus their businessdevelopment strategy on finding ways to develop product differen-tiation to strengthen their bargaining power over customers in themarketplace. These strategies involve developing isolates, fractionsand specialty materials from essential oils, which other producers donot have. Producers try to convince the customer that these isolateshave benefits or efficacies that are superior to the crude essential oiland worth paying a premium for. Other producers, although veryfew have been successful, have developed and marketed their ownconsumer product ranges around the world in attempts to get awayfrom the price swings of a commodity product.

37.7.5 The regulatory environment

The regulatory environment is cited as the most difficult barrier toovercome in the development of a new natural aromatic material.The regulatory environment is currently undergoing great change. Itis governed by a number of organizations with regional and productcategory jurisdictions. Many see these regulatory bodies as taking‘an over the top’ approach to ensure consumer safety through mate-rial restriction, far beyond the actual threat availing society from theusage of aromatic materials in everyday life (Miller, 2008). Examplesof some issues facing the industry today include the following:

• Limonene, a monoterpene constituent of many essential oils,including citrus oils, is under consideration for classifica-tion as an acute hazard to the environment. This means thatproducts containing this ingredient in specified proportions(www.pesticides.gov.uk) will be required to follow EU haz-ard labelling rules. As it is proposed to designate limonene asR50/53 under the environmental regulations, this will disal-low the certification of any product containing limonene ineco-certifications.

• The EU Scientific Committee on Consumer Products (SCCP)gave an opinion in April 2008 that oakmoss extract use be limitedto where atranol and chloroatranol do not exceed >2 ppm inproducts (http://ec.europa.eu/health). This will potentially limitnatural chypre and fougere accords in perfumery and promotemore synthetic substitution for natural materials in this area.

• According to EU Directive 2003/15/EC, amending CouncilDirective 76/768/EEC (http://ec.europa.eu/consumers/sectors/cosmetics/documents/directive/), any product containing abovespecified limits of amyl cinnamal, benzyl alcohol, cinnamylalcohol, citral, eugenol, hydroxyl-citronellal, isoeugenol, amylcinnamyl alcohol, benzyl salicylate, cinnamal, coumarin, ger-naiol, hydroxyl-methylpentcyclohexenecarboxaldehyde, anisylalcohol, benzyl cinnamate, farmesol, 2-(4-tert-butylbenzyl)propionaldehyde, linalool, bezyl benzoate, citronellol, hexyl



cinnam-aldehyde, D-limonene, methyl heptin carbonate, 3-me-thyl-4-(2,6,6-tri-methyl-2-cyclohexen-1-yl)-3-buten-2-one, oakmoss extract and treemoss extract (all constituents found widelyin essential oils), will require toxicity warning labels on consumerproducts.

• The SCCP in 2004 formed the opinion that the use of undilutedtea tree oil is unsafe and it is unsuitable for use in cosmetics(http://ec.europa.eu/health/ph_risk/committees/04_sccp/docs/sccp_o_160.pdf).

Under proposed legislation, small cosmetic cottage industryhobbyists and micro-companies will be required to register withthe US Federal Drug Authority (FDA) like any other cosmeticmanufacturer. Under the proposed FDA Globalization Act 2008(www.teachsoap.com/forum/viewtopic.php?f=3&t=347&start=0),small companies will be required to pay the same fees as their largercounterparts, operate production and goods storage in separatelocations, undertake the same paperwork requirements, registertheir formulations and advise the FDA of any changes in productformulation. If this act is passed, it will heavily curtail home andhand-made cosmetic and aromatherapy production in the USA.

The major consequence from the changing worldwide regulatoryframework is that all essential oils must fulfil regulatory require-ments, including existing ones because there are no ‘grandfather’provisions in the EU regulations. This will dramatically increase thecost to producers who are not organized as a representative groupand increase the costs for any new essential oil development.

New markets and opportunities are opening up for essential oils.The organic cosmetic market is reported to be growing at almost10% per annum (Yeomans, 2013). No published market or growthfigures exist for organically certified agricultural pesticides andfungicides, but growth is exponential according to those in theindustry. There are also innovations in the household insecticidemarket. Companies like EcoSmart® have launched knock-downhousehold insecticides utilizing essential oils as the major activeingredients (www.ecosmart.com).

The use of the term natural in the cosmetic industry has becomemisleading. Many multinational companies are moving into theorganic cosmetic segment, previously served by smaller specialistniche manufacturers. There is a lot of confusion, as consumers areoften given the impression that ingredients are 100% natural, whenthis is often far from the truth. There is currently lack of regulationin this area, which is allowing companies to portray their products asnatural when they are really not. Natural does not mean sustainable,and the use of some materials may actually harm biodiversity ratherthan preserve it, as discussed in Section 37.7.3. The use of diesel todistil essential oils can be substantial. Ginger takes 20 h, linaloe 25 h,vetiver 30–90 h and ylang-ylang up to 48 h of distillation time. Thiscreates a large carbon footprint, especially with diesel and bunkerfuels that have to be carted long distances.

Various organic certification bodies exist to audit and appraisecosmetics, but these certification schemes, at present, are notuniform in their standards and are voluntary, without any legalsanction. Generally, these organic certification programmes requireonly 95% of materials in the product be of natural vegetable origin,processed through physical methods. Therefore, it is possible thatthe fragrance in the product is synthetic and not from a naturalsource. The sustainability of production is also not adequately

assessed, leading to criticism of these certification schemes. Untilthese certification schemes are developed further, there is littleincentive for manufacturers to increase their use of natural aromaticmaterials.

37.7.6 The rural crisis

As we are completing the second decade in this new century, muchof the Asia-Pacific region is suffering a rural crisis. Australia washit with a long drought for a number of years, a recession and adebt crisis, which has been slowly grinding rural regions to a halt.With tightening credit, many rural families are being forced off theland. Chronic shortages of labour are affecting harvests and produc-tion. Declining services and infrastructure are lowering the qualityof life for rural families. Another aspect of Australian rural societyis the inequality of educational pathways between rural and urbanyouth (Golding, 2001). This could potentially inhibit the ability ofrural people to scan for opportunities and exploit them in the nextgeneration.

To the north, in Papua New Guinea, economic and social inequal-ity is increasing between the rural and urban populations. The ruralpopulation has fewer opportunities from limited economic activ-ity. Disadvantages include remoteness from urban markets, the highcost and deterioration of transport services, poor access to services,lack of private and government investment and environmental pres-sure on the eco-system due to illegal activities such as logging. InPapua New Guinea, nearly half of the people living in rural areaslive under the poverty line (http://acer.edu.au/documents).

Through South-East Asia, rural areas are facing similar problemsto those of Australia and Papua New Guinea. Many rural areas lagbehind in national development, unable to benefit from the highlevels of growth in the region. Some governments are focusing onbuilding infrastructure in urban areas due to the very rapid urbanpopulation growth, at the expense of the rural areas. Lack of ruralinvestment is leading to higher rural unemployment rates, where alarge percentage of the rural youth population is leaving to the citiesfor job opportunities (Baxter, 2001). This leaves an ageing farmerpopulation in rural areas with low education levels, resources andcapital. In some parts of the region, there is a feeling of powerless-ness, with a lack of ideas, opportunities and matching skills, so veryfew are willing and able to embark upon new agriculture ventures(www.ausaid.gov.au/publications).

37.7.7 Synthesis of natural aromatic molecules

Many natural perfumes from the scents of flowers in the forestsand jungles of the world are examined each year by flavour andfragrance companies (Hunter, 2006). This results in a thoroughanalysis of these oils and an investigation of the biological pathwaysthat leads to their natural synthesis. From these data, thousands ofnew molecules are synthesized each year, their odour propertiesevaluated and tested in potential applications and the synthesisprocess for promising molecules patented (Hunter, 2008).

The discoveries of new aromatic compounds have led more to thedevelopment of specialty aroma chemicals than to the developmentof new natural aromatic materials. The newly discovered aromaticmolecules become molecular templates, where economic routes ofsynthesis can be designed and developed on a commercial scale.



With advances in bio-fermentation, this trend is likely to continue,because many newly discovered natural molecules come from plantspecies where the target molecule exists in the plant in trace amountsand is too costly to extract. With very few exceptions, flavour andfragrance companies have been reluctant to invest and develop theproduction of new essential oils due to the ease of synthesis as analternative. The process of finding new molecules and synthesizingthem is shown in Figure 37.4.

The patenting of aromatic materials found in nature is the waythat many companies have protected specialty aroma chemicals withnovel notes they have developed. This allows companies to exclu-sively offer these materials to the industry on a monopoly basis. Theissue of synthesis raises the debate about intellectual property. Theseclaims and rights in many cases are based on indigenous knowledgeand medicine, although this is sometimes hidden. Companies hidethe original source of knowledge and true ownership through notusing the correct botanical nomenclature and specifying individualchemicals from the plant, without specifically mentioning the plant,and referring to a number of plants. The effect of these patents in anumber of cases is to prevent the development of a specific essentialoil as a single party has been awarded the exclusive rights, preventingothers from exploiting a known and public-domain natural resource.

Companies that have the analytical equipment and laboratoriesto compile the data needed for an expensive patent application areadvantaged over individuals and community groups who are usu-ally not organized and lack the needed resources (Pain, 2001). TheCropwatch website argues that these patents represent misallocationsof public domain knowledge and occur because the patent authori-ties lack the expertise required to scrutinize these issues (Salvadori,1995). Nevertheless, a number of these patents have been challengedand revoked by patent authorities. For example, WR Grace EuropeanPatent on Neem extracts (Azadirachta indica A. Juss) was revoked

and a turmeric (Curcuma long L.) patent held by the University ofMississippi Medical Center was revoked in 1995.

37.7.8 Research and development

Most crops need considerable research before they can be com-mercialized. Research plays an important role in natural productdevelopment and maintaining the competitive advantage of anexisting industry. Natural product research covers the disciplinesof botany, ethno-botany, entomology, natural product chemistry,analytical chemistry, micro-propagation, agronomy, agriculturalengineering, distillation engineering, biotechnology, bioprocessengineering, cosmetic chemistry, perfumery, flavours and industrialchemistry. However, the majority of research undertaken in thesefields by universities and research institutions tends to be academicrather than practical research. Academic researchers tend to bemore concerned about maintaining the rigour of science, judgedby their peers in journals and conference proceedings, rather thanresearch that contributes directly to the exploitation of essential oilsand development of the industry (Rukangira, 2001).

According to Malcolm, the last 50 years of Australian agricultureresearch was largely irrelevant to the farming community (Malcolm,1990). Public funding is decreasing, and this is forcing the roleand organization of research into new paradigms. In the future,strategic alliances will need to be created, like for example thestrategic alliance between the University of Tasmania and EssentialOils of Tasmania. Other commercial research and developmentarrangements are being implemented in places like New Zealand,where a corporate research institution (SCION) is collaboratingwith the existing kanuka oil industry to improve the value of pro-duction through creating specific isolates useful to industry, undera commercial arrangement (Carberry, 2001).

Plants

Animals

Food

Objects

Analysis Modeling Synthesis Product

Biotechnology

Organic

Odour plus Stability

ThresholdEfficient

Valusynthesis

Added Benefits

Applications

PerfumeryCosmetics

Stable in formulationsCost effectiveEfficacy (i.e.,antimicrobial)

Botany/ethnobotanyBio-prospecting

Head-spaceChromatography

SeparationExtraction

Screening

AntimicrobialAnti-fungalAnti-tumorAnti-aging

Flavour & Fragrance

BotanyBiochemistryComputationalChemistry

Figure 37.4 The process of finding, analysing and synthesizing an aroma molecule based on a natural material



Systems AgricultureAgricultural professionalstance that emphasizes

farming as a social practicethat uses technology

Participatory ActionResearch

Emphasis on co-learningthrough farmer and

community participatoryresearch and empowerment

programs

Traditional Academic Based Research

Based on developingtechnology and principals,

models and possiblepractices

Farming SystemsResearch

On-farm technical problemdiagnosis and adaptive

research

Shift fromtheoretical and

technical tocommunity

collaboration andproblem specific

research

General Local

Technical

Social

Domain Focus

Dis

cip

lin

e O

rie

nta

tio

n

Figure 37.5 A typology of various farming researchmanagement concepts

Future essential oil research cannot rely on public research fund-ing to assist in the establishment of new natural products. Farmerswill need to empower themselves and lead their own research inwhat is called farmer-driven research (Malcolm, 1990). This researchapproach escapes the irrelevant research provided by public institu-tions and focuses on the real needs in developing a new crop (Ecroydet al., 2008). Many research models involve the farmer in their owncrop trials, without the same rigour as academic research, to achieveusable data that can be utilized by farming communities. Thisapproach is called participatory action research, farmer participatoryresearch, participatory technology development and on-farm research.Although these models were originally developed for Third Worldfarming communities, they are quickly being adapted to problemsof farming in developed countries (Biggs, 1995). The shift fromtraditional-based research to participatory action research is shownin Figure 37.5.

Research in the future is most likely to be corporate based,focused on the development of highly valued isolates and fractionsof existing essential oils. This will be sponsored and dominated byresearch-orientated enterprises, the flavour and fragrance industry,and cosmetic and pharmaceutical companies. Growers in the Asia-Pacific region will have to rely on collaboration with other individ-uals (Martin and Sherington, 1997) and commercial organizations,or go down the road of participatory action research (Biggs, 1995).

From a sustainability standpoint, research without a strong com-ponent of innovation that provides some form of competitive advan-tage, or is based on some external unique factor like climate, may notalways benefit the emerging industry. Research that does not createa strong entry barrier to others will not stop an industry declin-ing in one country and emerging in another. Examples to supportthis proposition are the loss of the Australian eucalyptus industryto Europe, Africa and South America, the loss of the Australian teatree industry to China and the move of floral oil production fromEurope to Asia.

37.7.9 Sustainability

The concept of sustainability is elusive, difficult to define and evenmore difficult to know whether the enterprise is really operating in

a sustainable way. Although there are now many conflicting defi-nitions of sustainability, most include elements of both the socioe-conomic and natural systems (Reijntes et al., 1992). Theoretically,sustainability is about integration of the enterprise with the environ-ment, where the environment includes natural, social, economic andstrategic aspects. A sustainable enterprise is one that maintains pro-ductivity in the long term (McCown, 2001). Immediate needs shouldbe able to be met while ecosystems and biodiversity are preserved forthe future. However, it must also be accepted that everything has alimited lifecycle, and this increases the complexity of the meaning ofsustainability. Sustainability needs consideration of all aspects of anenterprise. These areas include:

1. the agricultural aspects, where long-term production and preser-vation of resources are balanced out;

2. the surrounding ecological aspects, where the ecosystem and bio-diversity are not depleted;

3. the management aspects, where the management system supportsindividual employees and the community;

4. the financial and economic aspects, where the benefits of newcrops can be sustained without having to continually subsidizeand financially support them with external funding; and

5. interactions with the socioeconomic environment and the com-munity, where both have mutual benefits.

37.8 Conclusion

The future for new natural aromatic materials looks bleak. Findingnew materials with very few people with the expertise and resourceswill be a challenge in the future. Rural communities are decliningin many developing countries where the world’s largest stock of bio-diversity exists. Regulation is inhibiting natural product innovationand increasing the costs of commercialization to levels that threatenviability. Companies within the flavour and fragrance industry haveinvested too much in the roads to synthesis, and agricultural pro-duction of new materials is too risky.

The question here is, has the golden age of natural aromatic mate-rials in the flavour and fragrance industry come and gone?



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Further reading

http://www.cropwatch.org/Threatened%20Aromatic%20Spp.%20v%201.08.pdf

http://acer.edu.au/documents/RC2001_Proceedings.pdfhttp://www.ausaid.gov.au/publications/pdf/enclaves_equity

_summary.pdfhttp://www.ecosmart.com/household/http://ec.europa.eu/enterprise/cosmetics/doc/200315/200315

_en.pdfhttp://ec.europa.eu/health/ph_risk/committees/04_sccp/docs/sccp

_o_131.pdfhttp://ec.europa.eu/health/ph_risk/committees/04_sccp/docs/sccp

_mi_002.pdfhttp://energycommerce.house.gov/FDAGlobalAct-08/Dingel_60

AXML.pdfhttp://www.pesticides.gov.uk/uploadedfiles/Web_Assets/PSD/ Eco-

toxChip3BriefGuidance.pdfSmuggling, corruption and threatened species, some press reports,

http://www.cropwatch.org/cropwatch7.htmhttp://www.abc.net.au /rural/vic/stories/s591725.htm

new natural aromatic products:

Health & Medicine

flavour odour profile dueto

john wiley

natural aroma chemicals

participatory action research

synthetic aroma chemicals

excessively warm weather

cost price performance ratio

2007essential oil distilled