The ability to learn faster than your competitors may be the Only sustainable competitive advantage Arie P. de Geus Royal Dutch Shell
A Framework for Essential Oil Development 1 st Australian New Crops Conference, Gratton, Queensland, 1996. Keith Hyde, Thirty Australian Champions: Shaping the Future for Rural Australia, Canberra, RIRDC, 2000 Edward Weiss, Essential Oil Crops, New York, CABI, 1997
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?, 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 re-plantings required? After each harvest, after a number of seasons, after how many years, what are the costs involved to prepare for each re-planting?
4. Harvesting, Extraction and Post Extraction Is harvest timing crucial?, ie, 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 utilised? Manual, semi-mechanised, fully mechanised 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 extraction, other What power sources will be utilised? 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 (ie., 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? (min. and max. est.) 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 & 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 x 100 = Return on investment
Classes, Characteristics and Uses of Essential Oils Adapted from Naf (1989) and Petrzilka (1991) in Hunter (1995)
Evaluating the Characteristic Strengths and Weaknesses of Essential Oils The novelty of a new essential oil The major factor determining the novelty is the perceived uniqueness of the essential oil’s organoleptic profile. Thus, the degree of novelty is limited by the closeness of potential substitutes. The concept of novelty extends to essential oils that are more cost effective sources of natural aroma chemicals. New natural sources of aroma chemicals would also fit into this criteria of novelty.
The potential uses and applications of a new essential oil Without perfumers and flavourists perceiving applications potential, a new essential oil will remain in the realm of curiosity. Time, effort and imagination on the part of perfumers and flavourists is required to discover useful applications for new essential oils. It is under this criteria that most new essential oils will struggle to find acceptance as a new aromatic material.
The closeness of any substitutes It is difficult to find essential oils that cannot be duplicated by reconstitutions. New essential oils with close substitutes are of little value to the flavour and fragrance industry, unless they can offer a significant cost or stability advantage. The only exception is when a new essential oil is a source of a natural aroma material.
The stability of a new essential oil One of the major problems associated with essential oils is stability in end products. Many processed food products undergo harsh cooking procedures during manufacture. Cosmetic bases often contain free fatty acids, even after neutralisation. Essential oils that contain high levels of terpenes, tend to polymerise on exposure to light and air, discolour end products or are not stable in alkaline or acidic media. Synthetic aroma chemicals and specialties are generally more stable than essential oils and used more extensively in functional perfumery.
The cost price/performance ratio The cost price/performance ratio is important to the application potential of a new essential oil. If a new essential oil does not offer a perceptible odour/flavour at a low concentration, then its value to the flavour and fragrance industry is greatly diminished unless it is very cheap. Poor performance under this criteria will negate the potential of most new essential oils 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 the development of new aromatic materials. The industry has an impeccable reputation for self regulation and added EU regulations increases the cost of preparing dossiers on new materials even more. In markets outside the EU, most international flavour and fragrance houses would not consider using a new essential oil unless it meets IFRA safety and toxicity recommendations and is included on the GRAS list.
The general consistency of quality and supply Natural material 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 of pests and diseases. Likewise there are risks with continual supply of natural materials because of adverse weather conditions, changes in climate, floods and other natural disasters, wars, political upheavels and the inexperience of new producers. Launching new consumer products require large investments on the part of the end product manufacturer. Flavour and fragrance houses do not want to be placed in a position of being unable to supply a manufacturer with a flavour or fragrance compound because of the unavailability of a raw material.
The prevailing market/product trends Market and product trends slowly evolve. Changes in market trends are the result of complex forces, including technology, which makes new trends possible, advertising, and cultural influences upon consumer tastes and preferences. A particular essential oil may become more or less important to the flavour and fragrance industry, depending upon these trends.
The current level of technology New technology advances influence the value of existing aromatic materials to the flavour and fragrance industry. The development of new essential oil reconstitutions are aimed at eliminating some of the potential toxicity and solubility problems of existing essential oils. Reconstitutions are generally more stable and cheaper than their more expensive natural counterparts. As better and more cost effective reconstitutions are developed in the future, the use of some essential oils will decline. Since the advent of more sophisticated analytical techniques, like GC-MS, headspace analysis, electronic noses, aroma chemical and specialty product manufacturers have been better able to isolate powerful aromatic molecules from essential oils and synthesise these compounds. The discovery of new aroma chemicals in essential oils due to increased equipment sensitivity is more likely to lead to synthesis rather than cultivation.
Dossier Requirements for REACH Registration (from 1 Tonne to more than 100 tonnes per annum.) Greater than 1 Tonne Per Annum Greater than 10 Tonne Per Annum Greater than 100 Tonne Per Annum Melting/freezing point Boiling point Relative density Vapour pressure Surface tension Water solubility (or water extractivity for polymers) n-Octanol-water partition coefficient Flash point or flammability Explosivity Auto-flammability Oxidising properties Granulometry Skin irritation or corrosivity evaluation or in vitro tests Eye irritation evaluation or in vitro test Skin sensitisation evaluation or local lymph node assay Ames test In vitro chromosome aberration test Acute Daphnia toxicity Algal growth test Ready biodegradation Light-stability for polymers Long-term extractivity for polymers Skin irritation (unless classified from Annex V data) Eye irritation (unless classified from Annex V data) In vitro gene mutation assay Acute oral toxicity Acute inhalation or dermal toxicity 28-day (or 90-day) repeat-dose study in the rat (normally oral exposure) Developmental toxicity screening study (OECD 421) Developmental toxicity study Toxicokinetics assessment (a prediction based on the available data) Acute fish toxicity Activated sludge respiration inhibition test Hydrolysis test Adsorption/desorption screening test Stability in organic solvents and identification of degradants Dissociation constant Viscosity Reactivity to container material In vitro Mutagenicity studies 28-day or 90-day repeat-dose study in the rat (if not part of the Annex VI data) Developmental toxicity studies in two species (if not part of the Annex VI data) Two-generation fertility study in the rat (if there are adverse findings from the 28-day or 90-day studies) 21-day Daphnia reproduction study Chronic fish toxicity study Simulation test on the ultimate degradation in surface water Soil simulation test Sediment simulation test Fish bioaccumulation study (unless there is a low predicted bioaccumulation potential, e.g. from Log PoW < 3) Further adsorption/desorption study 14-day earthworm toxicity Study of the effects on soil micro-organisms Short-term toxicity to plants Plus requirements from left column (greater than 1 tonne) Plus requirements from left columns (greater than one tonne plus greater than 10 tonnes)
List of Data Required for Biocidal Product Directive Registration 1. General Information
Substance identification (CAS, IUPAC, formula etc)
Substance information – colour, purity, physical properties
Synonyms and trade names
Quantity used in EU
Hazard classification and labelling
Usage pattern – including application, types of use, volume per application, recovery, industry types
Essential Oils within the top Twenty Produced Worldwide with Adverse Opinions made by the Expert Committee of the SCCP Essential Oil Botanical Name Volume (Tonnes) Under Threat from SCCP Opinion Orange Citrus sinensis 26000 X Cornmint Mentha Arvensis 4300 Eucalyptus Euc. globulus 3728 X Citronella Cym winterianus 2830 X Peppermint Mentha piperita 2367 Lemon Citrus limon 2158 X Euc. Citriodora Eucalyptus citriodora 2092 X Clove Leaf Syzygium aromaticum 1915 X Cedarwood (US) Juniperus virginiana 1640 Litsea cubeba Litsea cubeba 1005 X Sassafras (Brazil) Ocotea pretiosa 1000 X Lime Citrus aurantifolia 973 X Spearmint Mentha spicata 851 Cedarwood (China) Chamaecyparis funebris 800 Lavandin Lavandula intermedia 768 X Sassafras (China) Cinnamomum micranthum 750 X Camphor Cinnamomum camphora 725 Coriander Coriandrum sativum 710 Grapefruit Citrus paradis 694 X Patchouli Pogostemom cablin 563 X
A Simple Competency Audit Competency Present Not Present Comments
Agronomy/plant nutrition/field management
Cosmetic chemistry/food etc
Packaging & design
Consumer product manufacturing
Basic Basic Experience Experience Experience Basic Basic Basic Low Low Low Low Low Low Low Low Low Need guidance Need assistance Need guidance Assistance Available Can design Need appraisal Use contractor Use institute Replicated experiments With Environment Use contractor Can develop Need assistance Learn from experience Use contractor
Able to screen environment for opportunities
Able to evaluate opportunities
Yes Yes Passionate Need to see realistically
Have relationships in target industries
Have relationships in research area
Have relationships in finance industry
A few A few Some
Able to project manage
Able to administrate
Able to financially manage operation
Able to undertake research
Able to keep key people motivated
Yes Yes Yes Yes Yes
Understand dynamics of market and industry environment
Able to plan for a business within this environment
Able to implement, evaluate and adjust plans in this environment
Market analysis Is the essential oil in under or over supply? What is the current supply situation? Do prices fluctuate greatly? What are the maximum and minimum prices over the last 10 years? Are there any current use trends? What are the potential markets for the essential oil? What is the potential market size for the essential oil? Who are the current producers of the essential oil? What strategies do their enterprises pursue? Is the oil a source of potentially valuable aroma chemicals? Are there any substitutes for this oil? Are there any other products that can be produced from the crop as a bi-product?
Different Major Chemical and Olfactory Profiles of Five Basil Oils Hunter et al, 1996 Sample Linalool Methylchavical Olfactory Profile India 14.2% 77.5% A grassy herbaceous and mildly spicy predominating note, with a herbaceous subsidiary note; back notes slightly fruity. French 55.3% 10.9% A smmoth fresh and diffusive herbaceous note with harmonized cool anisic and slightly balsamic subsidiary notes and warm woody back notes. Australian 34.3% 34.7% A clean vegetableptype note with a cool herbaceous menthol-like subsidiary note; a green and grassy back note. Seychelles 27.7% 40.2% A sharp diffusive clean grassy herbaceous note, with a fruity anisic subsidiary note and a very slightly camphoraceous back note. Reunion (Australian grown) 3.4% 75.7% A sharp, if not somewhat dry, anisic note; the subsidiary notes were herbaceous with a slight sweet camphoraceous floral back note.
Chemotype Variances within the Genotype Tanacetum vulgare L.
A Simplified Index Selection Strategy for Genetic Crop Improvement
Strategy Guideline for Conventional Crop Maintenance Practice Explanation Example Prevention Using practices and methods to prevent something like weed growth or pest and inhabitation Cleaning tractors and other agricultural equipment before entering a field to prevent the spread of weed seeds or spores. Cultural Control Choosing the best cultivars and planting materials, engaging in practices that will promote growth and protect crops, etc Selecting high yielding seeds through index selection, use of intercropping to improve soil fertility, select best seasonal planting times to prevent weed competition with crop. Mechanical Control Mechanical methods to assist with crop maintenance. The use of flaming to control diseases like root rust and control weeds, utilizing no-till approaches to prevent weed seed spreading and maintain soil fertility. Chemical Control The use of chemicals to assist in crop maintenance. The use of pre-emergence herbicides to prevent weed growth, the use of pesticides, etc.
A Summary of Prevention and Treatment Methods for Plant Diseases Disease Treatment Powdery Mildew Providing adequate sunlight, air circulation and lower relative humidity to prevent powdery mildew. The use of fungicide sprays to treat powdery mildew. Rust Watering early in the day to prevent rust. The application of fungicidal spray to treat rust. Leaf Spot and Blight Use resistant cultivars, maintain plant vigour through adequate fertilizer application, the enhancement of leaf drying through pruning and watering early in the day will help prevent spotting and blighting. Fungicides able to assist in preventing leaf spot and blight but poor in eradicating it. Root and Crown Rots Prevent through creating a well drained soil environment. Stem and Twig Cankers Prevent through maintaining plant vigour and removing diseased parts. Fungicides of limited use in treating stem and twig cankers. Vascular Wilts Prevention through resistant species, maintaining plant vigour and soil sanitation. No effective fungicides for treatment. Smuts and Moulds Use of resistant cultivars and fungicides to protect. No effective fungicides for treatment. Bacteria Protect through the use of disease resistant cultivars and good soil sanitation. Use of sterilization in nursery operations to prevent contamination. Streptomycin and copper sprays help to slow the spread of bacterial disease. Chemical sprays unreliable for treatment of bacterial diseases. Viruses Control virus carrying insects, animals and humans around crop area. Remove and destroy infected plants. Nematodes Difficult to control.
Overhead Sprinklers Drip Irrigation Capillary Sand Beds Installation cost Moderate Moderate/High High Maintenance Low High High Excellent Low Moderate Labour Low Moderate Low Water Distribution Fair Good Good Water Use Efficiency Poor, wasteful Good Good Pump Requirement Large, high pressure Small, low pressure Small, low pressure Water Volume Requirement Large Small Small Wind Influence Serious None None