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MARKETING OF ESSENTIAL OILS

Updated: Feb 1, 2022


The biggest buyer of essential oils is industry both cosmetics, personal care, food and cosmetics, pharma, perfumery/fragrance smallest segment is aromatherapy and retail, both by volumes and values.

Aromatherapy though is an old subject but it is taken seriously only in this century. And, if we add Aromatherapy as a subject with new research on oils –that essentially originates in pharmacology researches as they try to find new medicinal ingredients and internet opened new horizons of information across the globe. Availability of open resources of data made research easier, barriers to information dropped, and thus, pharma companies took a new look at a medicinal database of countries –essentially non-English speaking. From there comes the knowledge about medicinal properties but since they don’t usually don’t understand botany /Phytochemistry /or research methodology of that part, they think EO name is enough; forgetting that EOs qualities will dramatically differ based on the following factors:

  • geographic location and climate

  • method and duration of distillation

  • harvest time (harvest year, season, and even time of day)

  • weather conditions, rainfall, temperatures

  • amount of time between extraction and distillation


And without an understanding of these factors, the crisis zone starts.

In the industrial segment, the oil is extracted within acceptable tolerant limits and also, one or two parameters of oil, based on their needs. Like lemongrass major active ingredient is Citronellol and in the oil production cycle, it will come in a range of 45 to 80 %. Companies normally operate on 65-70 % Citronellol. So they average out the concentration by sourcing it from other vendors at different concentration percentages. For example, say, my oil as a distiller is 80 % which will be very costly so the supplier will source from another vendor whose oil contains lesser Citronellol say 40 % —whose price will be a lot lesser –mix it and bring it within acceptable parameters. Secondly, we need to understand an oil’s total ingredient can be 100 % —so more of one ingredient, the others will fall. So, in wholesale businesses, you work on standardized protocols and try to maximize on that way. And that is bulk both in volumes and value of the business.

In the perfumery industry, margins are insane. And if they like your oil, smell/and how it blends in products and how good that product sells, they will not change vendor for price or quality. That is true even in the case of fragrances used in gutkas of high quality. There being a disruption in oil production since covid- one segment that has been breathing fire over our necks has been gutka perfumers; as gutka demands soared, oils shortages ballooned the prices. Since in that segment, both prices and margins are insane and the only thing that differentiates one from the other is fragrance, they do a lot of experimentations with oils. They buy a lot of oils in small quantities especially high valued ones, just for experimentation. Those oils are not valued there, the NOSE and distiller work together like designers and tailor is the cream of trade.

There is another downstream highly technical side —-where essential oils are spilled down to isolate their medicinal active ingredients and used in the pharma industry and the rest oil is added with a chemical part to replace the missing part and sold as EO in the market. The same happens with some specific tones of fragrant compounds either because the buyer wants that tone from natural sources or the lab has not been able to find it.

Global trade in Eos

Lot of countries are making EO’s and their prices vary –like most Chinese EO’s are the cheapest. They can sell Lavender oils for a few kg; Europe call sell from 6000-8000 INR based on the country and Kashmir lavender can go as high as 30000 INR. And hence, obviously, the quality of oils also varies as agro growing conditions vary but so will properties. These huge variations in prices are essentially created by NOSES, where they reject one oil over the other. But in the other markets, it does not really matter; lavender oil will remain lavender oil and third world countries are huge markets for these.

And I don’t talk of outright cheating where chemical compounds and fragrances are added and sold as EO.

And finally, segment:


AROMATHERAPY:



Since the market size is not big, parameters are not well decided, and oils numbers always ballooning the best place to buy is through wholesalers, who give standardized oils or manufactured oils depending on buyer willingness to pay and knowledge but they normally deal in standard regular industrial EO’s. For small quantities traded high valued oils –no one is going to invest in stocking. Since high valued oils come only once year (like roses, German Chamomile) or in cases of wood oil like sandal that comes once in a while, to trade in them one needs to invest in inventories. So, what happens to those demands I leave you to guess, but my guess is very bad. If I was buying, I won’t trust.


As buyers/users, they must know the subject. If you want to buy diamonds and know nothing of diamonds even companies like Geetanjali sold glass pieces as diamonds to high-heeled clients.


And that is why in this series of knowledge sharing, we want people to know oils and then intelligently use them. They have medicinal values. The labels, however, beautifully they are made or marketed, aren’t giving them healing properties.

Now people talk of certifications, if you don’t know how to read them, they are Latin or may say they can be of some other batch or of absolute metaphysics. Not even a great number of very good chemists can use them intelligently. So, neither trust them nor try to waste time in understanding them. Leave it for industries where they use it to test if the oil meets their basic benchmarks for effectiveness – for the individual buyer, it means reading a spreadsheet in Latin.

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