E SSENTIAL O ILS : A RT , A GRICULTURE , S CIENCE , I NDUSTRY AND E NTREPRENEURSHIP (A F OCUS ON THE A SIA -P ACIFIC R EGION ) E SSENTIAL O ILS : A RT , A GRICULTURE , S CIENCE , I NDUSTRY AND E NTREPRENEURSHIP (A F OCUS ON THE A SIA -P ACIFIC R EGION ) M URRAY H UNTER SME U NIT University Malaysia Perlis Nova Science Publishers, Inc. New York Copyright © 2009 by Nova Science Publishers, Inc. All rights reserved. No part of this book may be reproduced, stored in a retrieval system or transmitted in any form or by any means: electronic, electrostatic, magnetic, tape, mechanical photocopying, recording or otherwise without the written permission of the Publisher. 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In addition, no responsibility is assumed by the publisher for any injury and/or damage to persons or property arising from any methods, products, instructions, ideas or otherwise contained in this publication. This publication is designed to provide accurate and authoritative information with regard to the subject matter covered herein. It is sold with the clear understanding that the Publisher is not engaged in rendering legal or any other professional services. If legal or any other expert assistance is required, the services of a competent person should be sought. FROM A DECLARATION OF PARTICIPANTS JOINTLY ADOPTED BY A COMMITTEE OF THE AMERICAN BAR ASSOCIATION AND A COMMITTEE OF PUBLISHERS. L IBRARY OF C ONGRESS C ATALOGING - IN -P UBLICATION D ATA Hunter, Murray. Essential oils art, agriculture, science, industry and entrepreneurship (a focus on the Asia-Pacific region) / Murray Hunter. p. cm. Includes index. ISBN 978-1-60741-865-8 (hardcover) 1. Essences and essential oils industry--Pacific Area. 2. Essences and essential oils--Pacific Area. I. Title. HD9999.E783P32 2009 338.4'7661806095--dc22 2009025482 Published by Nova Science Publishers, Inc. New York In memory of my grandfather Leonard David Hunter (1911-1973) A self-made chemist A pioneer of essential oil based products in Australia A great entrepreneur and mentor to all Murray Hunter vi Contents Library of Congress Cataloging-in-Publication Data ........................................................ iv Preface ............................................................................................................................. xiii Acknowledgements ............................................................................................................ 1 Introduction: The Development Issues ............................................................................... 3 Introduction .................................................................................................................... 3 The Size of the Essential Oil Industry ............................................................................ 4 Definitions of Essential Oils and Other Natural Aromatic Extracts .............................. 9 Product Strategy Choices ............................................................................................. 11 The Development Issues............................................................................................... 13 Global Warming, the Food and Financial Crisis .............................................................. 13 Market Turbulence .......................................................................................................... 15 Wild Collection and Threatened Plant Species ................................................................. 15 Bargaining Power of Producers ....................................................................................... 21 The Regulatory Environment............................................................................................ 22 The Rural Crisis .............................................................................................................. 24 Templating of Natural Aromatic Molecules ...................................................................... 24 Research ......................................................................................................................... 26 Sustainability ................................................................................................................... 27 Factors leading to Success and Failure ......................................................................... 28 Planning and Opportunity Assessment ............................................................................. 29 Management and Organisational Issues ........................................................................... 29 Financial Issues............................................................................................................... 31 Technical Issues .............................................................................................................. 31 Land Issues...................................................................................................................... 32 Marketing Issues.............................................................................................................. 32 Strategic Environmental Issues ........................................................................................ 33 Issues of Fate and Nature ................................................................................................ 33 References .................................................................................................................... 39 The Nature of the Industry ............................................................................................... 43 Introduction .................................................................................................................. 43 The Flavour and Fragrance Industry ............................................................................ 43 Components of the Flavour and Fragrance Industry .................................................... 45 Essential Oil and Other Natural Product Producers ..................................................... 45 Wild Collection for Essential Oil Production ............................................................... 49 Small Holder Essential Oil Production......................................................................... 49 Local Collectors ........................................................................................................... 52 Plantation Production of Essential Oils ........................................................................ 53 By-Product Production of Essential Oils ...................................................................... 53 Produce Brokers and Agents ........................................................................................ 56 Research Institutions and Universities ......................................................................... 57 Governments ................................................................................................................ 57 Producers of Animal Extracts ....................................................................................... 58 Essential Oil Producer Associations ............................................................................. 58 Chemical Feed-stock Manufacturers ............................................................................ 59 Aroma Chemical Manufacturers .................................................................................. 62 Specialty Fine/Aroma Chemical Manufacturers .......................................................... 63 Introduction: The Development Issues vii Trader/Exporter............................................................................................................... 64 International Trader ........................................................................................................ 64 Flavour and Fragrance Houses ..................................................................................... 65 Flavour and Fragrance House Subsidiaries .................................................................. 67 Flavour and Fragrance House Agent ............................................................................ 68 National Regulatory Systems ....................................................................................... 68 Standards Associations ................................................................................................. 69 End Product Manufacturers .......................................................................................... 69 Wholesalers and Retailers ............................................................................................ 71 Consumers and Derived Industry Demand ................................................................... 71 Essential Oils in the Cosmetic Industry ........................................................................ 72 Essential Oils in the Pharmaceutical Industry .............................................................. 73 Essentials Oils and the Aromatherapy Industry ........................................................... 74 Essential Oils as Intermediates in the Production of other Compounds ...................... 75 Essential Oils in the Organic Agro-chemical Industry ................................................. 77 The Value-Chain for Essential Oils .............................................................................. 78 References .................................................................................................................... 79 The Phyto-chemistry of Essential Oils ........................................................................... 107 Introduction ................................................................................................................ 107 The Plant Metabolism ................................................................................................ 108 Carbohydrates ................................................................................................................ 110 Lipids ............................................................................................................................. 111 Amino Acids ................................................................................................................... 111 Nucleotides..................................................................................................................... 112 The Metabolic Pathways ............................................................................................ 114 Secondary Metabolites and Plant Defence Systems .......................................................... 117 Aromatic Compounds Found in Plants ....................................................................... 118 Some Important Aromatic Chemicals ........................................................................ 128 Terpene Hydrocarbons ................................................................................................... 128 Phenols .......................................................................................................................... 131 Alcohols ......................................................................................................................... 132 Aldehydes ....................................................................................................................... 136 Lactones ......................................................................................................................... 148 Nitrogen Compounds ...................................................................................................... 149 Sulphur Compounds........................................................................................................ 150 Other Groups ................................................................................................................. 151 The Analysis of Essential Oils ................................................................................... 152 Chromatography ............................................................................................................ 155 Gas Chromatography-Mass Spectrometry (GC-MS) ........................................................ 158 Other Methods of Analysis .............................................................................................. 158 Multidimensional Chromatography ................................................................................. 159 Gas Chromatograph and GC- Mass Spectrometry Headspace Analysis ........................... 160 Thin Layer Chromatography ........................................................................................... 160 Infrared (IR) Spectroscopy .............................................................................................. 161 Nuclear Magnetic Resonance (NMR) .............................................................................. 161 Atomic Absorption Spectroscopy ..................................................................................... 162 Ultra-Violet (UV) Spectroscopy ...................................................................................... 164 Electronic Nose (E-Nose)................................................................................................ 164 References .................................................................................................................. 165 Murray Hunter viii Developing Essential Oils .............................................................................................. 215 Introduction ................................................................................................................ 215 Exploring the Potential of Essential Oil Production ................................................... 216 The Level of Commitment ......................................................................................... 217 Challenges and Failure ............................................................................................... 220 Risk and Uncertainty .................................................................................................. 223 Some General Success Characteristics ....................................................................... 226 Strategy....................................................................................................................... 226 The Essential Oil development Process ........................................................................... 231 References .................................................................................................................. 233 The Screening and Regulatory Process .......................................................................... 235 Introduction ................................................................................................................ 235 Opportunities for Essential Oil Development ............................................................ 236 The Screening Process ................................................................................................ 238 Sources of Potential Plant Opportunity Identification ................................................ 240 Bio-Prospecting.............................................................................................................. 240 Desktop Studies .............................................................................................................. 241 Screening for Development Potential ......................................................................... 241 The Characteristics and Classification of Essential Oils ............................................ 245 Evaluating the Characteristic Strengths and Weaknesses of Essential Oils .............. 247 The Regulatory Environment ..................................................................................... 249 The European Market ..................................................................................................... 250 Food Additives and Flavour Materials ............................................................................ 250 The European Chemicals Agency (EHCA)....................................................................... 251 Biocidal Products Directive ............................................................................................ 255 Scientific Committee on Consumer Products (SCCP) ...................................................... 259 The United States............................................................................................................ 262 Flavours and Food Additives .......................................................................................... 262 Fragrance Ingredients and Cosmetics ............................................................................. 263 Pesticides and Biocidal Products .................................................................................... 265 FDA Globalization Act of 2008 ....................................................................................... 265 Japan ............................................................................................................................. 266 Food Additives and Flavours .......................................................................................... 266 Fragrance Ingredients and Cosmetics ............................................................................. 266 The Agricultural Chemicals Regulation Law ................................................................... 269 The Chemical Substances Control Law ........................................................................... 269 Australia and New Zealand ............................................................................................. 269 Food Standards Australia New Zealand (FSANZ)............................................................ 269 The National Industrial Chemicals Assessment Scheme (NICNAS) ................................... 271 The National Registration Scheme Australian Pesticides and Veterinary Medicines Authority ........................................................................................................................ 272 The ASEAN Region ......................................................................................................... 272 Indonesia........................................................................................................................ 273 Malaysia ........................................................................................................................ 274 Thailand ......................................................................................................................... 274 Vietnam .......................................................................................................................... 276 The Philippines............................................................................................................... 277 Consequences for Screening by the International Regulatory Framework ........................ 279 References .................................................................................................................. 280 The Development Planning Process ............................................................................... 289 Introduction: The Development Issues ix Introduction ................................................................................................................ 289 Environmental Analysis ............................................................................................. 290 1. Rivalry Among Competitors ........................................................................................ 291 2. The Threat of New Entrants ........................................................................................ 292 3. Bargaining Power over Suppliers ................................................................................ 292 4. Bargaining Power over Buyers.................................................................................... 293 5. Substitutes .................................................................................................................. 294 Factoring in the Dynamic Evolution of the Industry .................................................. 295 Collating the Information into a Picture ..................................................................... 297 Developing a Basic Strategy ...................................................................................... 300 Essential Oil Trade Price Fluctuations ....................................................................... 307 Totally New Essential Oils ......................................................................................... 310 The Basic Principal Strategies of Essential Oil Development ................................... 311 Overall Cost Leadership ................................................................................................. 311 Differentiation ................................................................................................................ 312 Focus ............................................................................................................................. 312 Market Analysis ......................................................................................................... 314 Supply Chain .............................................................................................................. 318 Selection of Basic Market Strategies .......................................................................... 318 Planning Field and Technical Development ............................................................... 320 References .................................................................................................................. 329 The Field Development Process ..................................................................................... 332 Introduction ................................................................................................................ 332 An Agricultural Enterprise as a System ..................................................................... 332 Climate Change .......................................................................................................... 336 Project Preparation and Early Work ........................................................................... 338 Climate and Moisture ................................................................................................. 339 Plant Aromatic Material Composition and Pathways ................................................. 343 Selection and Acquisition of Genetic Material for Planting ...................................... 347 Seed Collection............................................................................................................... 350 Improvement of Genetic Material through Recurrent Selection ........................................ 352 Land Selection ................................................................................................................ 353 The Socio-Economic Environment................................................................................... 355 Overall Land Topography-Ecology ................................................................................. 356 Altitude........................................................................................................................... 359 Soil................................................................................................................................. 360 Infrastructure ................................................................................................................. 365 Potential Crop Cycles ..................................................................................................... 365 Procurement ................................................................................................................... 366 Economics ...................................................................................................................... 366 Environmental Assessment .............................................................................................. 366 Local and Governing Laws ............................................................................................. 366 Farm Design .................................................................................................................. 368 Propagation and Planting Material Development ....................................................... 368 Vegetative Propagation .................................................................................................. 375 Cuttings.......................................................................................................................... 376 Budding and Grafting ..................................................................................................... 377 Micro-propagation and Tissue Culture............................................................................ 377 Fertilisers ....................................................................................................................... 383 Murray Hunter x Pest and Disease Control ................................................................................................ 383 Weed Control ................................................................................................................. 384 Field Development – Preparation and Planting .......................................................... 384 Fire Breaks..................................................................................................................... 388 Planting ......................................................................................................................... 389 Plant Populations and Spacings ...................................................................................... 390 Determining the Optimum Cultivation Parameters through Research and Demonstration Plots ............................................................................................................................... 391 Crop Field Maintenance ............................................................................................. 394 Fertilisers ....................................................................................................................... 395 Weed Control ................................................................................................................. 399 Pest and Disease Control ................................................................................................ 407 The Level of Farm Mechanisation ............................................................................. 413 The Size of Farm Machinery ...................................................................................... 418 Harvesting .................................................................................................................. 422 Selection and Design of Extraction System ............................................................... 426 Distillation Effluent ........................................................................................................ 436 Potential By-Products from the Distillation Process ........................................................ 436 Storage Facilities ........................................................................................................ 437 Good Agricultural Practice (GAP) ............................................................................. 439 Financial Modelling, Feasibility and Evaluation ........................................................ 442 References .................................................................................................................. 448 The Organic Production of Essential Oils ...................................................................... 460 Introduction ................................................................................................................ 460 Basic Organic Farming Concepts and Practices ......................................................... 470 Crop Rotation ............................................................................................................. 472 Cover Crops and Green Manures ............................................................................... 472 Animal Manures ......................................................................................................... 475 Intercropping .............................................................................................................. 476 Composting ................................................................................................................ 480 Mulching .................................................................................................................... 484 Crop Diversity ............................................................................................................ 486 Natural Fertilizers, Minerals and Supplements .......................................................... 487 Insect and Disease Control ......................................................................................... 490 Biorational Pesticides ..................................................................................................... 496 Particle Film Barriers .................................................................................................... 497 Insecticidal Soaps and Plant Oils .................................................................................... 497 Botanical Pesticides........................................................................................................ 498 Weed Control ............................................................................................................. 501 Tillage......................................................................................................................... 504 Farmscaping ............................................................................................................... 505 Planning and Site Selection ........................................................................................ 505 Certification ................................................................................................................ 507 Integrity and Record Keeping .................................................................................... 509 Organic Farming in the Asia-Pacific Region ............................................................. 509 Conclusion .................................................................................................................. 510 References .................................................................................................................. 511 The Application of Essential Oils................................................................................... 524 Introduction: The Development Issues xi Introduction ................................................................................................................ 524 The Classification of Odours ...................................................................................... 525 The Floral Family........................................................................................................... 528 The Woody Family .......................................................................................................... 529 The Animalic Family....................................................................................................... 530 The Balsamic Family ...................................................................................................... 530 The Agrestic Family........................................................................................................ 531 The Coniferous Family ................................................................................................... 531 The Marine Family ......................................................................................................... 531 The Aldehydic Family ..................................................................................................... 532 The Medicated Family .................................................................................................... 532 The Fruity Family ........................................................................................................... 532 The Citrus Family ........................................................................................................... 533 The Green Family ........................................................................................................... 533 The Mint Family ............................................................................................................. 534 The Spicy Family ............................................................................................................ 534 The Herbaceous Family .................................................................................................. 535 The Classification of Flavours.................................................................................... 538 The Structure of a Fragrance ...................................................................................... 541 New Products and Fragrance Development ............................................................... 544 Flavours ......................................................................................................................... 552 The New Product Development Process .................................................................... 556 Types of New Products .............................................................................................. 561 Product Life Cycles ........................................................................................................ 565 Ideation ....................................................................................................................... 568 Idea Screening and Opportunity Identification .......................................................... 570 Concept Generation........................................................................................................ 575 The Development and Launch Process ............................................................................ 590 Manufacturing Plant Design ........................................................................................... 590 A Case Example of Developing an In-cistern Blue Block Production System (Toilet Blue Water Block) ............................................................................................................. 592 The Development of the Molding Process ........................................................................ 593 The Development of the Extrusion Process ............................................................... 597 The Final Aspects of the Development and Launch ................................................... 600 Intellectual Property ....................................................................................................... 600 Cosmetics and Personal Care Products ...................................................................... 606 The Case for Natural Fragrances ................................................................................ 614 Natural Fragrances as Multifunctional Ingredients ......................................................... 624 The Future Prospects of Supply....................................................................................... 624 Natural Perfumery ...................................................................................................... 626 Aromatherapy................................................................................................................. 626 Household Products .................................................................................................... 634 Laundry Products ........................................................................................................... 634 Pine Oil Disinfectants ..................................................................................................... 638 Insecticides and Repellents ......................................................................................... 639 Mosquito and Incense Coils ............................................................................................ 642 Air Fresheners................................................................................................................ 642 Orange Oil and d-Limonene Cleaners ............................................................................. 643 Agricultural Chemicals ............................................................................................... 644 Essential Oil Based Fungicides/Insecticides .................................................................... 646 Murray Hunter xii Natural Anti-Stress Preparations from Betaines and Essential Oils ................................. 647 Essential Oils in Soap Bases ........................................................................................... 647 Plant Extracts: Pyrethrums ............................................................................................. 649 White Oils ...................................................................................................................... 649 Herbicides ...................................................................................................................... 650 Pharmaceutical Products ............................................................................................ 650 Natural Isolates and Aroma Chemicals ...................................................................... 653 Distribution Strategies ................................................................................................ 657 Agro-Tourism ................................................................................................................. 661 Fairtrade ........................................................................................................................ 663 Niche Products for Niche Markets..............