Purpose of the study
To provide the background information and market direction needed by growers and/or processors who are entering or already involved in the emerging therapeutic essential oil industry in Alberta”.

Objectives of the study
The specific objectives of the study were:

To conduct a global overview and analysis of the essential oil industry.
To determine the market potential and market opportunities within the therapeutic essential oil industry in Alberta.
To identify Alberta adapted plants that would meet the needs of the therapeutic essential oil industry.

Key kindings

In 2001, the market for aromatherapeutic products in France, Germany and the U.K. was valued at U.S. $523.3 million. (Datamonitor, 2002)
The aromatherapeutic market in the U.S. has grown from U.S. $316 million in 1996 to U.S. $454 million in 2001. (Datamonitor, 2002)
The compound annual growth rate (CAGR) for aromatherapy sales in the U.S. for 1996-2001 is 7.5%. (Datamonitor, 2002)
Natural personal care (NPC) markets in the U.S. grew to $4.1 billion in consumer sales in 2002. (Nutrition Business Journal, 2003)
The market (in the U.S.) for natural personal care products will reach $7.5 billion in 2006. (Datamonitor, 2002)
Datamonitor estimates that products with aromatherapeutic principles constitute 3% to 5% of the total personal care products market. (Datamonitor, 2002).
According to the 2003 Health and Wellness Trends Report offered by the Pennsylvania-based Natural Marketing Institute, aromatherapy is used by an average of 34.4% of the total population, with 46.9% under the age of 35, suggesting some significant growth opportunities as the population ages.
The last half-decade has seen tremendous growth in aromatherapy product sales, as consumers have become increasingly savvy about the healing powers of essential oils.
The major producers of essential oils for the flavor, fragrance and other market categories are Brazil, China, U.S., Egypt, India, Mexico, Guatemala and Indonesia. All of them, with the exception of the U.S., are developing countries with low cost labour economies.
The major consumers of all market classes of essential oils (flavor, fragrance and therapeutic) are the U.S. (40%), Western Europe (30%) and Japan (7%).
Ten major essential oil crops account for 80% of the world market for essential oils. The major essential oil world crops are citrus oils, mint oils, lemon fragrance oils, eucalyptus oil, cedarwood oil and clove oil. The remaining 20% of the world essential oil market comprises over 150 crops.
The therapeutic oil industry is dwarfed by the flavor and fragrance industries which are difficult markets to enter into because the broker houses can import oils from developing countries where labor is cheaper than in North America and oils are produced by small growers using low cost primitive distillers.
The cost of setting up a distillation unit at the Alberta farm level is a high initial investment.
Alberta producers experience limitations that do not challenge competing countries such as shorter growing seasons, harsher winter weather and higher costs of labor.
The Natural Health Products Act (NHP) will have implications for therapeutic essential oils in that any therapeutic essential oil product that makes a health claim will have to meet all of the requirements of the NHP standards and regulations before it can be sold.
Results from the focus groups indicate that the typical Alberta consumer is white Caucasian women between the ages of 16-50, and who is open to alternative health.
Focus group participants felt that suppliers needed to ensure the quality of the product, be a credible and reliable source of information and be able to maintain a consistent quality and quantity of product.
The top 5 therapeutic essential oil treatments discovered from the telephone survey were anti-anxiety (symptom: stress/anxiety), analgesic (symptom: general pain relief/back pain/muscle soreness/injury), anti-inflammatory (symptom: arthritis/joint pain/migraines/sports injuries), anti-infectious (symptom: cold/flu/earache); and anti-spasmodic (symptom: muscle spasms/muscle sprains/asthma).
Therapeutic essential oil users were interested in trying high-quality Alberta essential oils as a new or substitute to more commonly used oils.
Therapeutic essential oil users preferred the plant to be grown organically and to have proper documentation describing how it was produced and processed.
The potential advantage of western Canadian therapeutic essential oils would be to ensure that they are grown according to good agricultural practices (GAP).
Plant species with some potential that are adaptable to Alberta and have essential oil properties that could be used in therapeutic treatment as per treatment categories discovered through the survey are wild bergamot (Monarda fistulosa var. geraniol and thymol); common yarrow (Achillea millefolium); german chamomile (Matricaria chamomilla or Matricaria recutita); anise hyssop (Agastache foeniculum); french tarragon (Artemisia dracunculus); birch (Betula papyrifera); white and black spruce (Picea glauca and Picea mariana); and aspen and balsam poplar (Populus tremuloides and Populus balsamifera).

Recommendations

Feasibility of the Therapeutic Essential Oil Industry in Alberta

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1.	The best strategy in Alberta would be to aim for high value, high quality therapeutic grade essential oils at the top end of the market, rather than the lower value, lower grade commodity oils.
2.	There is potential for this industry as a niche status now with the alternative health trade.
3.	By working in the alternative health area now, Alberta growers/distillers will build their expertise in the distillation of high quality therapeutic grade oils. This study gives very targeted market focus to Alberta growers/distillers to begin development of an industry.
4.	Marketing will play a major role in the building of this industry, from growers, through processors, manufacturers and distributors/retailers. Growers who implement a Hazard Analysis and Critical Control Point (HAACP) based On-Farm Food Safety Plan and Good Agriculture Practices will be able to improve their market access and global competitiveness.
5.	Agronomy and chemistry will have to work together for production of consistent economically viable high quality oils. There is a need to conduct research work on the agronomy of the plants identified in this report and to document their chemotypes and how they can be used in the therapeutic essential oil market.
6.	There may be future potential in the personal body care area and these market opportunities may be identified through the current Alberta Agriculture, Food and Rural Development (AAFRD) departmental Ag-industrial key initiative.
7.	Alberta Agriculture Food and Rural Development can play a role in the development of this industry by giving support in the areas of business development, business structures (value chains and/or new generation co-ops), marketing strategies, new market opportunities for ingredients in the personal body care markets and agronomy of perennials for specific therapeutic essential oil quality.

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For more information about the content of this document, contact Kirsty Piquette.
This document is maintained by Tracy Bowers.
This information published to the web on September 9, 2003.
Last Reviewed/Revised on September 26, 2003.