JUNIPER OIL DISTILLATION AND MARKETING PROJECT Final Report
WESTERN JUNIPER COMMERCIALIZATION PROGRAM
TABLE OF CONTENTS
- Executive Summary
- Project Initiation, Objectives and Scope
- Project Implementation Schedule (1996)
- Distillation Equipment: Installation and Use
- Juniper Selection, Harvesting and Processing
- Distillation Process and Results
- Production Cost Analysis
- Oil Test Marketing and Results
- Business Opportunity Conclusions
- Appendix A: Project Documentation and Contract (hard copy report only)
- Appendix B: Original Distillation Records (hard copy report only)
- Appendix C: Gas Chromatography Analyses (hard copy report only)
- During the distillation of thirteen (13) batches of Western Juniper oil (Juniperus Occidentalis) it was found that there was much to learn about the harvesting, preparation and handling of the raw materials if yield is to be maximized. Example: best yields were from materials harvested in the Fall, raising the speculation of seasonal considerations in the tree's oil content.
- With properly prepared materials, and an efficient distillation system, expect oil yield of 0.5% - 0.75% from a zero-pressure system. Though not explored in this project, oil yield could average 1.0% - 1.5% in a 20-40 psi pressure system. Yield from the bole materials would probably be especially enhanced with a pressure system.
- Optimum distillation time was deemed to be 3-4 hours, resulting in a yield of 80% - 90% of the recoverable oil.
- Yield from properly dried materials could be greater than from fresh materials, however fast-drying tends to result in reduced yield since some oil is lost along with the moisture.
- The oil itself is a fine quality oil, rich in monoterpines and bornyl acetate, and with an aroma distinctly similar to the aroma of the fresh tree materials. This is not true of all tree and needle oils.
- The estimated cost of recovered oil (from a zero-pressure system) was $360.00 per gallon for a commercial (volume) operation, and $925.00 per gallon in a small, entrepreneurial operation.
- There are three market sectors to be served, with substantial variance in
the prices between them:
- a.) Industrial: $7.50 per pound for wood oil in drum lots.
- b.) Commercial:
- Large Commercial Segment; $25.00 per pound (drum lots) for leaf oil for oil blenders and large third party manufacturers of commercial products.
- Specialty Commercial Segment; $60.00 per pound for leaf oil for specialty aroma therapy, naturopathic and specialty scent products, including entrepreneurs doing retail products.
- There is some market interest in the distillate "waters" which come off of the process at a ratio of 300/1 to the oil. The waters may have large volume applications for certain scent cosmetics (e.g., cologne), animal pesticides, and insecticides. The insecticidal/pesticidal qualities of the waters should be explored in a dedicated research project.
- There is no business opportunity for the selling of wood oil to the Industrial sector (@ $7.50 per pound) in competition with Eastern Red Cedar oil (Juniperus Virginiana).
- Serving the Large Commercial segment (@ $25.00 per pound) would only be economically viable at yields in excess of approximately 0.9%.
- Serving the Specialty Commercial Segment is an attractive business opportunity, with a break-even point of 0.5% yield at $60.00 per pound in small (2-10 kgs.) quantities. At a product yield of 1.0%, business viability is assured down to prices as low as $25.00 per pound (see Break-even Sensitivity Analysis).
- There is a substantial business opportunity for entrepreneurs who wish to distill Juniper oil for use in their own specialty retail products, such as hunter's scent mask, mood scent kits, seasonal scents, and other specialty scent products such as soaps and candles. This is, perhaps, the most attractive near-term opportunity even if they had to pay the $60.00 per pound for oil, if it were available. The value-added aspects of blending, packaging and marketing provide very high revenue leverage over the marketing of the raw oil.
- Since Western Juniper oil is not currently available commercially, some investment in market development would be necessary in order to introduce the oil or its end products to the target customers.
Project Initiation, Objectives and Scope
In September of 1994 the Confederated Tribes of Warm Springs presented to the Multi-Region Strategies planning group a proposed research project to distill the essential oils out of Western Juniper trees (species Juniperus Occidentalis) for purposes of determining whether there were viable commercial business opportunities that could be generated from this use of the Western Juniper biomass. This research project was later incorporated into the an overall Western Juniper Commercialization Program, involving a number of other projects seeking to find markets for Western Juniper lumber and products, and was then submitted through the Oregon Economic Development Department as a proposed economic development project.
The proposed Western Juniper Commercialization Program was submitted to Governor Kitzhaber for review, and on April 18th, 1995 the Confederated Tribes of Warm Springs was advised that funding for the Juniper commercialization program, including the proposed oil recovery and marketing project, was approved by the Governor.
On August 29th, 1995 the Confederated Tribes of Warm Springs was advised by the Klamath County Economic Development Association (KCEDA) that they were empowered to authorize the commencement of spending for the oil recovery and marketing project. However, because of the need to execute agreements between the funding and contract administration agencies, and the agencies that would actually do the projects, the agreement between the Confederated Tribes of Warm Springs and KCEDA was not formally executed until April 1996. With the formal contract agreements finalized it was then possible to move ahead with the execution of the project. Copies of the relevant correspondence initiating this are included as Appendix A in this report, for reference.
The objectives of this research were as follows:
- 1. Determine the economic and process viability of obtaining the essential oils from Western Juniper trees, including the distillation and testing of oil yields from the Juniper leaf, bole wood, and the dried berries.
- 2. Determine the marketability and market value of the oil obtained from the distillation process by sampling the commercial market for Juniper oils, or oils similar to Juniper, in a variety of their most logical applications.
- 3. Determine whether business opportunities exist on either a large-scale commercial basis, or an entrepreneurial basis, for the distillation and marketing of Juniper oil, either to the commercial oil markets or, potentially, to end user markets.
- 4. Identify specific product opportunities toward which the oil could be applied such that entrepreneurs, or small businesses, could consider getting into the markets for these products on a profitable basis.
This project was not intended to be a comprehensive analysis of the many combinations of variables that would be involved in this test including the nature, sex, age, size, etc. of the trees themselves; the nature of the land upon which the Juniper is growing; the altitude and water availability; or the many other variables involved in the harvesting, handling and preparation for use, as well as the many variables of the distillation process itself. To this end it was envisioned that a reasonable test distillation facility would be set up for use in distilling oil from Juniper materials that would be obtained, handled and processed in a nonspecialized way such that most anyone who would want to duplicate this process could readily do so. Return to Contents
Project Implementation Schedule (1996)
|April 30||Contract between KCEDA and the Confederated Tribes finalized.|
|May 10||Project management and technical/ marketing support agreements finalized. Equipment site and support agreement with Warm Springs Forest Products Industries (WSFPI) plant finalized.|
|May 17||Space at WSFPI plant cleared for distillation unit. Distillation unit placed at WSFPI.|
|May 20||Authorized Juniper cutting area toured, trees cored, selected and marked. Arrangements made with Tribal Natural Resources Branch for harvesting, bagging and hauling crew (for fee).|
|June 6||First harvesting: two trees harvested. Bagged leaf material, and bole wood, brought to distillation site.|
|June 7, 11||First distillations: two batches of bagged leaf materials.|
|June 19, 20||Second harvesting of two trees. Cook two batches of bagged leaf materials.|
|July 1||Chip and cook first batches of bagged bole wood.|
|July through November||Continue harvesting and cooking as needed to refine process and obtain oils needed for marketing samples.|
|July 1||Begin commercial marketing activity.|
|July 30||Gas chromatography results of leaf oil, boil oil and distillation waters received from Flora Research.|
|August through October||Continue commercial marketing efforts.|
|November 1||Do extra cookings to obtain additional oil for samples.|
|November 15||Prepare sample hunters scent spray bottles to sample retail application market|
|December 1||Expand retail test marketing of sample spray bottles for general/ seasonal aromatic uses.|
|December 17||Final report draft completed.|
|December 24||Final report completed and distributed.|
Distillation Equipment: Installation and Use
The distillation system was obtained under contract from the Essential Oil Co., Lake Oswego, Oregon, which also was retained under contract to provide technical distillation assistance and product marketing services to the commercial essential oils marketplace. An agreement was made with Warm Springs Forest Products Industries (WSFPI) to site the still in a little used portion of their lumber processing plant at Warm Springs, Oregon. The site was accessible by vehicles and heavy equipment, and was generally out of the way of their normal business operations.
The distillation system itself consisted of a retort for holding the raw materials and was capable of handling 250 to 300 pounds of materials when fully charged. The steam outlet from the retort was via an insulated pipe which carried the steam to a condenser and separator which would take the output of the retort, condense the steam into water, and then separate the condensate into oil and the distillate runoff "waters" (which were the secondary byproduct of the process).
Distillation in the retort was accomplished by piping steam to the retort from the plant bsteam system which supplied steam at approximately 350 degrees F and between 125 and 150 pounds per square inch. The condenser required the piping-in of cooling water in order to facilitate the condensing of the steam output from the retort. The separator for separating the oil from the distillate waters obtained the condensate by gravity feed from the condenser. Once in the separator, oil floating on the condensed liquid could be tapped off separate from the distillate waters. The distillate waters were then allowed to feed via a gravity connection to a 20 gallon catch drum which caught the runoff waters from the distillation in progress.
The distillate catch drum was connected via a transfer pump to a 400 gallon holding tank (provided by WSFPI) such that the distillate waters from the catch drum could be pressure-pumped periodically from the catch drum to the holding tank. The plant then provided disposal services for the run-off waters by emptying the holding tank as needed.
Much of the in-kind costs associated with the project were related to the costs involved in the installation of the equipment and providing the steam, water, supplemental lighting, holding tank and disposal services needed to facilitate operations.
When used for distillation operations the raw materials to be distilled were bagged in burlap bags weighing approximately 15 to 25 pounds each, depending upon the nature of the material being distilled. This was necessary in order to facilitate removal of the distilled materials from the retort after distillation, since the retort needed to be loaded and emptied through the top via the tilting back of a hinged lid.
The system operated essentially as a zero pressure system with ambient atmospheric pressure in the retort and condenser. However, there was considerable expertise needed in the management of the volume of steam being applied to the retort during the distillation process, and the amount of cooling water flow to the condenser, in order to balance the throughput of the system such that the condenser was able to effectively condense the quantity of steam coming out of the retort such that there would be no loss of oil through vaporization.
Though the test system was substantial, and was very effective for purposes of this project, it nevertheless was a manually operated system that, when operating, required constant attention and fine tuning by a knowledgeable operator. The Essential Oil Company provided the expertise and the training needed for those involved to effectively run the system and, as time went on, those involved did become more expert in managing the process.
The hard copy report contains photographs which show the distillation system in place at WSFPI in Warm Springs. Return to Contents
Juniper Selection, Harvesting and Processing
Location - The Juniper harvest site, as approved by the Tribes' Range and Agriculture Committee, was situated approximately 2 1/2 miles S. - S.E. of the Warm Springs community on a terrace, and at an elevation of approximately 2,500 feet, between the Tenino Creek and Seekseequa Creek drainages. The map at the end of this section (hard copy report only) marks the location of the Juniper harvest area in relation to the town of Warm Springs on the reservation.
Soil - The soil in the harvest area consisted primarily of Type I Lavey-Drybed-Madras bounded by Type II Simas-Ruckles-Antoken, which at this location is a very dry, sandy silt and stony loam. Click here for a general soil map for the Warm Springs Reservation, and an associated soil type legend. The location of the Juniper harvest area is marked for reference.
Tree Density and Ages - In the Juniper harvest area the density of trees appeared in general to be approximately 12-20 trees per acre with some substantial variance (more or less) depending on the specific location. Sections which seemed to have mostly larger mature trees also seemed to have fewer younger trees around them. The bulk of the geographic area and space was taken up by relatively mature trees, the average of which appeared to be between 50 and 150 years old. During the course of the study the trees that we took down out of that area all fell within that age range. Mature trees were chosen with the assumption that they would provide the best oil yield. Most of the trees harvested and used for purposes of this study were between 75 and 125 years old. The mature trees typically seemed to vary between 20 and 40 feet high, with a substantial variance in the diameter of the foliage canopy, as well as substantial variance in the density of leaf or foliage on the tree. Most trees in the harvest area appeared to be in reasonably good health. During the course of this study none of the trees that were cut down or core-sampled were materially diseased. They all had very solid boles without any material decay in the interior of the bole.
Tree Selection - The trees that were chosen for use in this test were clearly the more mature trees, with robust foliage, and preferably of a deeper or darker green color. Some were chosen that were heavily laden with green berries, and some were chosen that were devoid of berries. Given the level of expertise on site we could not effectively determine the sex of the trees. Upon researching into it further it is our understanding that the sex is difficult to determine at any point in time since the tree changes sex periodically as it goes through its berry- producing and non-berry-producing cycle. Most of the trees that were harvested were cored in order to determine their health through the bole into the heart wood, and all samplings showed healthy trees. More specifics on the characteristics of the first six trees harvested for use is as follows:
|Height (ft.)||40 ft.||35 ft.||25 ft.||30 ft.||25 ft.||30 ft.|
|Diameter @ Base (in.)||24"||30"||24"||28"||20"||20"|
|Est. Percent Heartwood (%)||50||60||50-60||50-60||40-50||40-50|
Harvesting - Harvesting of the tree and its related materials was done by a crew provided by the Natural Resources Branch of The Confederated Tribes. The Natural Resources Branch, for a variety of reasons, including fire danger, insists that work done on the Reservation be done by folks who are authorized, and who have the proper training, safety equipment, and administration. For this reason the project chose to contract with the Natural Resources Branch for the materials harvesting and hauling activities.
The harvesting operation was fairly standard in that the tree was cut down and de-limbed, after which the ends of the branches containing leaf were nipped off and then gathered up into tightly packed burlap bags. Though the process was somewhat labor intensive, this was necessary because of the need for bagged materials for use in the distillation retort so that the waste materials could be readily removed from the retort after distillation. The bole was cut up into manageable logs, and the bagged leaf and the logs were brought back and deposited under cover near the still site at the WSFPI plant. Typically it would take a three man crew essentially a full work day to get to the site, find the tree to be harvested, cut it down, bag 30-35 bags of limbs, cut up the bole, and then transport it all back to the plant at Warm Springs.
When it was necessary to distill bole wood the logs were split at the distillation site. A rented chipper was brought to the site and the chipping and bagging of the bole was done on site immediately prior to their use in the distillation process. This was necessary because of the tendency of the Juniper to dry very rapidly in the dry Warm Springs climate, particularly during the summer, thereby losing a good deal of its oil and decreasing the yield of the process. In general, it was found that the quicker the Juniper materials were used after harvesting the better the yield, because of this drying and loss factor. More information on this and its effect on the yields is given in the section on Oil Distillation Process and Results.
Waste Disposal - In keeping with the tribe's Integrated Resource Management Plan for the Reservation, the waste materials from the distillation process were then taken back to the site from which the trees were being harvested, and were distributed across the landscape as ground cover. In this way the spirit of the plan, which calls for the leaving of the branches and boughs at the site of tree harvesting in order to facilitate nutrient restoration into the soils, was accomplished. Return to Contents
Distillation Process and Results
Materials Preparation - All the materials to be distilled were placed into sealed burlap bags. The leaf materials were bagged on site at the harvesting area to facilitate their easy transport back to the still site. Bole wood needed for distillation was brought back to the still site in 15" logs where it was chipped and bagged immediately prior to distillation to prevent evaporation losses. As mentioned previously, the bagging was necessary to facilitate the loading of the retort, but most particularly to facilitate the emptying of the retort after the distillation process since the retort was a top-loading device with no facility for removing waste materials out the bottom after the distillation was completed.
After some negative experience, distillation was scheduled either the afternoon of the same day of the harvesting, or the following day, in order to minimize oil loss through evaporation. Information given later in this section will show some of the effects of the loss of oil on yield because of evaporation in the hot and dry summer climate at Warm Springs. When not able to immediately utilize the distillation materials, they were brought inside and kept under cover (out of the sun) until it was time for them to be used. If the materials were left over night they would be wet down with cooling water, or covered with extra burlap bags (also wet), to facilitate evaporative cooling minimizing the oil loss. After the distillation process was completed the bags were removed from the retort with the aid of a long fisherman's gaff because of the high temperature of the materials after distillation. The rate of drying of the materials in the summer climate at Warm Springs was absolutely astounding. We did not make accurate measurements of what the weight loss would be for both the leaf and the logs on a daily or weekly basis, but the weight change of the materials was easily noticeable, and attendant oil loss was reflected in the yields.
This raises the issue of whether or not the materials could be dried in a more controlled environment that would allow water to evaporate from the materials while still maintaining the oil content, in order to give a higher yield for a given weight of materials. We were not able to pursue this within the scope of this project but it would be worth investigating by anyone who might consider getting into the Juniper oil distillation business in the future.
Still Preparation - Prior to starting the distillation process it was necessary to purge the steam and water lines in order to insure that clear steam and clean water to the system. This was typically the first step in preparing for a distillation run. Next, the materials in the burlap bags were loaded into the retort and packed in as tightly as possible in order to provide maximum biomass in the retort for the distillation run. When loading the retort with bagged leaf materials in their natural state, the retort would typically hold between 200 and 225 pounds of the material, depending upon the degree of care taken in loading the burlap bags, and in packing the materials tightly in the retort. The same consideration was true when bagging the chipped bole wood, however the velocity of the chip flow out of the chipper would usually insure a fairly tight packing of materials in the burlap bags. Therefore a charge of bole wood in the retort would typically weigh 225 to 275 pounds, on average about 25 or 30 pounds more than if the retort were charged with leaf material.
Prior to loading the retort we found it desirable to preheat the system, particularly the retort, in order to minimize cooking times once the materials were in place. The retort was uninsulated and therefore was subject to considerable heat loss, depending on the ambient air temperature, and wind velocity, on that particular day. To minimize heat loss in the system the retort transfer pipe was insulated, and that seemed to give a more consistent cooking process.
Once fully loaded with the retort lid down and securely fastened, and all other system components properly connected, the steam and cooling water were slowly applied and increased in flow. The optimum point that was being searched for in this process is the point at which there was enough steam passing through the system to heat the materials as rapidly as possible, without spilling out as steam from the condenser bleed- off tube. When that happened it was necessary to either cut back a little bit on the steam or to increase the cooling water flow to the condenser, and this balancing process was the one that it took some experience to master.
During the cooking process, a certain amount of condensate from the steam accumulated in the bottom of the retort. There is a valved tap-off to allow this water to run off. The amount of water in the retort was managed to see whether maintaining some water in the bottom would keep the retort at a more even temperature and therefore increase the rate of oil production. However, it was found that it did not seem to make a material difference in yield whether the water was allowed to accumulate in the bottom of the retort or whether it was allowed to just run.
In the system that was used for test purposes on this project the key system limitation was the size of the condenser. Only a fraction of the steam available (perhaps a 25 psi flow) was utilized before we over-drove the condenser and allowed the live steam to escape from the condenser relief tube, thereby causing a loss in oil yield since the escaping steam would carry its attendant oil along with it. There was plenty of cooling water with which to cool a larger condenser. Therefore, with a larger condenser, one could apply more steam to the retort thereby potentially increasing the rate of oil production and certainly the oil yield for any given period of time.
Typically, once experience was gained with this particular system as to how to bring the retort up to cooking temperature of 210 degrees F., oil production began between 30 minutes and one hour after applying steam, depending upon the type and weight of the materials packed into the retort.
On some of the distillation runs the oil production was measured relative to the cooking time and the results of these measurements are given in the yield tables, following.
Oil Take Off - As the system approached cooking temperature (210 degrees F.) steam from the retort would begin to pass through to the condenser and be condensed into a liquid distillate containing both oil and associated waters. This liquid distillate was gravity-fed into a separator which allowed the oil to rise to the top of a separate section of the container, at which point there was a valved take-off outlet from which the oil could be drained off. The run-off waters from the bottom of the separator were then allowed to gravity-drain into the 20-gallon catch drum, from which the waters were periodically pumped into the 400 gallon holding tank. It is important to note that those run off waters were produced at the rate of approximately 300 to 350 gallons of run-off waters for each gallon of oil produced. This is important because in further work on the project, and further market research, it was determined that the waters may have some useful applications, and may have a substantial market value.
Yield Results - Following is a table which shows the oil yield from the various batches of materials that were distilled showing the type and weight of materials, the distillation time, the oil yield and any other pertinent information relative to the distillation of that particular batch such as the time between harvesting of the materials and the cooking of the materials. Copies of the Distillation Record for each batch distilled are included in Appendix B (hard copy report only).
|Batch Weight (Lbs.)||222#||216#||204#||178#||252#|
|Cook Time (hrs.)||3.0||1.0||2.5||2.5||2.0|
|Oil Yield (grams)||325.5 g.||44.4 g.||157.2 g.||197.1 g.||287.7 g.|
|Percent Yield (by weight)||0.32%||0.045%||0.170%||0.244%||0.250%|
|Days Since Harvesting||1||5||1||1||1|
|Berry Amount||Sparse||Sparse||Heavy Immature||Sparse||Sparse|
Juniper Bole Wood
|Batch Weight (lbs.)||257#||224#||222%|
|Cook Time (hrs.)||4.25||2.5||3.0|
|Oil Yield (grams)||202.6 g.||65.8 g.||175.5 g.|
|Percent Yield (%)||0.174%||0.065%||0.174%|
|Notes||Chipped: 4 days prior||Chipped: 4 days prior||Chipped: 1 day prior|
Though a measure of oil yield as a function of time was not rigorously pursued, a few batches were measured to determine oil yield during the cooking process. The results are given in the following table.
Distillation Table Timed Yield Data: Grams of Oil
|Batch #||First Hour||Second Hour||Third Hour||Fourth Hour||Total Grams|
|#5 (Bole)||123.0 g.||36.5 g.||35.1 g.||8.0 g.||202.6 g|
|#7 (Leaf)||211.5 g.||76.4 g.||--||--||287.7 g.|
|#8 (Bole)||N/A||135.0 g.||40.5 g.||--||175.5 g.|
This data, along with information and observations obtained during the distillation of all batches, generally confirmed the earlier test distillation work done by Kurth and Ross of Oregon State University(1) as follows:
- Two-thirds of the recoverable oil will be obtained during the first two hours of cooking.
- A cooking time of 3-4 hours will yield 80% - 90% of the recoverable oil.
- Cooking longer than 4 hours will only increase oil yield a few percent per hour, and is not economically viable.
For clarity, it should be noted that "cooking time" is measured from when liquid distillate first begins to pass through the condenser, and does not include the time required to heat the retort and distillation materials to cooking temperature. Distillations performed on this particular system usually resulted in a first pass-through of distillate out of the condenser when the retort temperature reached 195 - 200 degrees F. This usually occurred 30 min. - 60 min. after steam was applied to the retort, and varied mostly with the amount of pre-heating done to the system before the cooking process was begun.
Subsequent to the test distillations done in June, July and August, additional batches were distilled in both October and November to provide additional oil and waters at the request of potential customers. It was interesting to note that the oil yield from these batches (leaf; done from trees that had a minimum of immature berries) was substantially greater than from the batches distilled in late spring and early summer. Following is a Distillation Table which shows the distillation results of these later batches.
|Batch Weight (lbs.)||265#||276#||189#||166#||181#|
|Cook Time (hrs.)||4.0||4.0||3.0||2.5||3.25|
|Oil Yield (grams)||550 g.||550 g.||322 g.||261 g.||354 g.|
|Percent Yield (by weight)||0.46%||0.44%||0.375%||0.346%||0.42%|
Though this data is scientifically inconclusive, it has resulted in speculation that there is a significant seasonal variation in the oil content of the leaf. Minimum oil when the tree is in the peak of its growth season; maximum oil as the tree approaches dormancy. If true, this act could have a significant impact on the economics of a potential oil-based business, and is an area fur further research. Another possible explanation is that, in the hot, dry summer weather of Central Oregon, the oil evaporates out of the leaf material faster than the tree can replace it.
It is also important to note one change from the original goals of the project: no meaningful work was done on the distillation of dried Juniper berries. This task was eliminated because of the following factors:
- Our experience showed that, at Warm Springs, the Juniper loses much of its oil as it dries.
- Green berries, though heavy, contain little oil.
- Few dried berries were visible on he ground or on the trees throughout the period of this project. Our speculation was that they are simply consumed by the local birds and animals.
In a climate different from Warm Springs the dry berries may be more recoverable. However, in the interest of achieving the primary objectives of this project, a judgement was made that the dried berries were not a viable, attractive business resource.
The following Yield vs. Distillation Time chart maps the results of all distillation batches. Note that the highest yields were from the first batch (done in June), and from the last five batches done in October and November. The anomaly of the yield from the first batch (1L) can not readily be explained. Later experience led us to believe that the extraordinarily low yield from leaf batch two (2L) was due to oil loss from drying since the batch was not cooked until about a week after it was harvested, though it was kept under cover during that time. Interestingly, Kurth & Ross(1) also had some unexplained low yields in their work.
Comparison with Previous Work - The report published by Kurth and Ross, Oregon State College, No. C-3, dated 1954 (included in the Bibliography as Exhibit 1) provided the most useable benchmark information with which to compare the resutls obtained in this project. Key comparative observations are as follows:
- a.) Though they had a wide range of yields over 30 test distillations (0.24% - 1.82%) their yields were, on average, substantially higher than those of this project (six batches with yield between 0.30% and 0.45%).
- b.) Their higher yields were produced in a pressure apparatus (20 psi - 60 psi). This project's test still was a zero-pressure system.
- c.) They were using "dry" materials, though no specific information is given in the report on their drying process. During the test proejct it was found that air-drying in the Warm Springs climate (June - Sept.) Materially reduced yield.
- d.) They obtained higher yield from materials that were processed to give a smaller particle size than was used in this project.
- e.) Their batch sizes, typically 20# - 40# (dry weight) per distillation batch, were much smaller than the average 200# - 225# batches (wet weight) distilled during the project. This raises the issue of wehther larger batches need to be distilled under a different presusre/temprature/time profile in order to maximize yield, because of the nature of the materials.
Chemical Analyses - Following are example pages from a gas chromatography analysis report on Juniper leaf oil from batch number WS1JL. The analysis was done by Flora Research of San Juan Capistrano, California, a firm that specializes in gas chromatography analysis of essential oils. Included with the data are graphs that show the relative magnitude of the different chemicals contained in the oil.
Complete copies of all gas chromatography analyses reports are included in Appendix C (hard copy only) for reference, and includes an analysis of the distillate "waters".
Some of the relevant conclusions from an analysis of the chemical content of the oil are:
- a.) It is a colorless or pale greenish-yellowish liquid with a characteristic fresh- basalmic odor and bitter burning taste. Like all Essential oils it must be stored in a cool place, in airtight containers and protected from light.
- b.) The oil has more than 70 isolated components. It contains the terpene, pinene, sabinene, limonene (a terpene hydrocarbon) and terpinen-4-ol. The last constituent is said to cause the diuretic action which is mainly loss of water not sodium ions. It does not irritate the tissues in contrast to other terpenes. Juniper also contains borneol, geraniol, and other sesquiterpenes, phenols and esters. The monoterpenes are the main components and account for the antiseptic and antiviral action.
- c.) The distillate waters have a high content of boryl acetate and caryophyllene.
- d.) The oil is somewhat unique in that its aroma is very similar to the aroma of the living tree.
- e.) In the oil that was produced from leaf that was heavily laden with berries, there was elevated sabinene levels (batch number WS3JLB).
- f.) The Juniper oil is non-toxic at low dose and non-sensitizing, but irritation may occur on sensitive skin.
- g.) The oil can be ingested in moderate doses orally, however, it is not to be used during pregnancy or breast feeding. Juniper is a stimulating diuretic and is not prescribed whenever there is kidney inflamation or irritation. Use for a maximum of four weeks at any one time. Resume administration if indicated after four weeks without use. Prolonged or excessive use can result in renal damage.
Summary: Observations and Conclusions
Project experience with the harvesting, preparation and distillation of Western Juniper materials has resulted in the following broad conclusions, with a high degree of confidence:
- All mature, reasonably healthy trees are candidates for use in an oil extraction process.
- Materials preparation (chipping, chopping, etc.) Is best accomplished at the harvest site.
- The finer the materials are prepared, the quicker oil can be recovered from them in the distillation process. Recommend that bole wood be chipped and leaf materials chopped in a commercial process.
- However, Western Juniper dries quickly and loses significant oil in the process. Recommend that the materials be distilled as soon as possible after harvesting, preferably within 1-2 days in order to obtain maximum yield. Unused materials should be kept in a cool, damp environment to inhibit evaporation of the oil.
- Oil yield by weight from fresh leaf materials will typically be 50% greater than from fresh whole bole materials.
- Trees heavily laden with immature berries will yield significantly less oil from the leaf materials, as compared to leaf from trees which are sparsely berried.
- Maximum economic distillation time is 3-4 hours, depending on the power of steam/retort/condenser equation. Properly tuned, a distillation system should yield 80 oil recovery in three hours.
- From an economic standpoint, distillation of leaf materials seems best because of the higher oil yield; because the materials take less pre-processing; and because the market value is higher.
- When distilling fresh leaf materials from mature trees; in a properly operated zero-pressure system, expect a minimum oil yield of 16 fluid ounces of raw oil from 250 pounds of leaf materials (minimum 128 ounces -- one gallon --per ton of leaf materials), giving a yield of 0.4%.
- Run-off distillate "waters" should be captured and held for sale. The distillation process produced 300-350 gallons of waters for each gallon of oil produced. There should be a market for these waters.
- With finely chipped or chopped materials, it is possible to pack them too tightly into the retort, thereby resulting in poor steam infiltration away from the steam source.
- The optimum distillation system needs to have matched components for maximum thruput, meaning that the retort, condenser, separator, and steam and water supplies need to be matched in capacity in order to facilitate the maximum yield of oil out of the materials with minimum cooking time.
- Overall, there was much more to be learned about the materials and distillation process than was originally envisioned, and the yields were much lower than expected. Therefore, twice the amount of distillations were required than was originally anticipated.
- Referencing the aforementioned results obtained by Kurth and Ross,
three areas of process improvement may be important to providing greater
product yield, which is the ultimate key to an oil-based economic business
- a.) Use of a pressurized distillation system (20 psi - 40 psi) may significantly increase oil yield.
- b.) Proper materials drying, such that oil is not lost in the process, may increase yield.
- c.) Reducing the materials to smaller particle size with chopping, hammer- milling, etc., may increase yield.
Production Cost Analysis
As mentioned previously, the distillation unit used for this test project was only capable of handling approximately 250 pounds of materials at a time. Though a distillation system of this size may be adequate for an entrepreneur or small business that is seeking to serve consumer markets with specialty oil products, a larger system, capable of handling a ton (2,000 pounds) of distillation material at a time, would be essential if oil were being produced for the commercial (bulk) oils market.
Based on the experience of this project, and making logical extrapolations for supplying a distillation system of commercial size, the following assumptions are relevant:
- One mature Western Juniper tree will yield 500 pounds of leaf materials and approximately 1,000 pounds of whole bole wood.
- Oil yield from the leaf material and bole wood will be 16 fluid ounces (one pound) from each 250 pounds of material, or one gallon (8 pounds) per ton of material (0.40% yield).
- Oil yield from whole bold wood (chipped) would be 10-12 fluid ounces per 250 pounds of material, or 80 fluid ounces (5 pounds) per ton of material. We would expect that distilling the wood in a pressure system would result in an oil yield equivalent to leaf material.
- Materials for distillation to be prepared (chipped, chopped, etc.) at the harvest site and transported to the still ready for use. Leaf chopped. Bole wood chipped.
- Regardless of the size of the distillation unit, two batches could be processed each day (4 hours per batch), including loading, unloading and cooking time.
- The distillation unit can be handled by one operator.
- A two-man crew can harvest and prepare 6 mature trees per day, with the proper equipment on site, for a commercial operation. This assumes a moveable retort (on wheels) can be brought to the site and loaded there. Assume that the small still (retort) is not moveable.
- A two-man crew can harvest and prepare 4 Juniper trees for use in small-still operations.
- Labor cost is $120 per man day ($15 per labor hour).
- Amortized distillation unit costs are based on a small-still cost of $5,000, and a commercial still cost of $20,000.
- Cost of operating supplies and fuel would be the same regardless of still size, for any unit weight of material processed.
- The market price of wood oil is $7.50 per pound ($60.00 per gallon) bulk.
- The market price of leaf oil is $60.00 per pound ($480.00 per gallon) bulk.
Based on these assumptions, following is a comparative cost model which estimates the cost of processing 2,000 pounds of chopped leaf materials.
Cost Analysis 2000 Pounds Juniper Leaf Distillation
|250# Capacity||2000# Capacity|
|Man-Days Needed to Harvest||2||1.33|
|Cost of Trees||-0-||-0-|
|Retort Batches Needed||8||1|
|Harvesting Costs - Labor - Amortized Equipment and Transportation||$240.00 75.00||$160.00 50.00|
|Distillation Costs - Labor - Amortized Still Cost - Operating Supplies and Fuel||480.00 80.00 50.00||60.00 40.00 50.00|
|Total Product Cost||$925.00||$360.00|
Yield and Commercial Value:
|Wood Oil||Leaf Oil|
|Oil Yield - One (1) gallon (8 pounds); Commercial value||$ 60.00||$480.00|
|Water Yield - 300 gallons; Commercial value @ $1.00 per gallon||300.00||300.00|
|Potential Commercial Product Value||$360.00||$780.00|
The obvious points of interest in this analysis are that:
- a.) Small scale operations are not economically viable in providing product to the commercial (bulk wholesale) market.
- b.) Even on a large-scale commercial basis, economic viability is dependent upon developing the market for the distillate waters.
- c.) The distillate waters from the wood distillations will probably have substantially more commercial value per unit of oil obtained than the oil itself, once the market for the waters is developed.
The key determinant in this economic equation is, of course, the relatively low yield (0.40% - 0.45% under optimum conditions) of oil from the Western Juniper leaf materials in a zero-pressure system as was used for this project.
The economic profile for the distillation of wood oil would be even more unfavorable since:
- a.) The bole wood would require additional processing (splitting and chipping).
- b.) Oil yield from bole wood would only average 0.75 times that of the leaf (6.0 pounds of oil per ton of material).
- c.) The current market price for equivalent competitive wood oil (Eastern Red Cedar- Juniperus Virginiana) has a current commercial market price of only $7.50 per pound ($60.00 per gallon).
- d.) Oil yield from the wood may be greater if the heartwood were boxed out of the log and used in the processes, however this would also add cost to materials preparation.
Process Yield vs. Product Value
|Product Value (w/o waters)||Product Value (with waters)|
|Oil Yield (Percent)||Oil Yield (Lbs.)||Leaf||Wood||Leaf||Wood|
Economic Leverage Points - Looking at the cost analysis for the distillation of fresh (wet) leaf materials, following are factors which could materially change the cost (and therefore profitability) profile of the oil recovery process:
- a.) Yield would likely be improved by the use of a pressurized distillation unit, as was the experience noted in the work of Kurth and Ross at OSU, referencing item (1) in the enclosed bibliography. Yield could possibly also be improved by drying the materials according to a proper drying schedule that would not cause attendant oil loss in the process. Additionally, preparing the materials into smaller particles by chopping, hammer-milling, etc., could result in an improved yield as is also noted in Kurth and Ross' work. The effects of oil yield improvement on the product-value of the process are startling, as given in the following table: On a commercial basis the business break-even point for leaf oil (w/o waters) is at a yield of 0.45% - 0.50%, as shown in Business Opportunity Conclusions. Therefore, even small changes in yield could radically change the business attractiveness of this opportunity. If yield on the order of 1.0% - 1.5% could be achieved, as experienced by Kurth and Ross with a pressurized system, business viability would be certain, even with substantial swings in market price.
- b.) Labor costs for harvesting and hauling could be somewhat reduced with a more efficient harvesting and materials preparation system, however labor efficiencies wouldn't have nearly the effect on business profitability as would the improvement of product yield.
- c.) All other cost elements have only a relatively minor effect on the potential economic viability of the process.
Market Test Results
The methodology for doing the market test on the Juniper oil included the determining of target market applications, the development of a market segmentation scheme, the development of a list of potential customers in the market, market sampling, an analysis of similar and "competitive" products that are on the market today, and the distillation of market feedback to determine market interest and potential pricing of the Juniper oil in the target market segments.
The Essential Oil Company of Lake Oswego, Oregon, was contracted in this project to provide the test distillation still, technical distillation services, and test marketing services. The Essential Oil Company is in the business of providing many different types of essential oils to brokers, blenders and manufacturers throughout the world. Hence they have the product and market knowledge necessary to do a reasonable market test of the Juniper oil for purposes of determining its market value and potential as the basis of a business enterprise.
A list of the best possible target applications for the oils of Juniperus Occidentalis is as follows. This list was the basis for developing a target customer list of firms that provide either raw oil or blended oils to companies that produce the end products in these application areas, or in some cases are the companies that in themselves produce the end products and take them to either the wholesale or retail markets.
- Mood scent kits
- Room fresheners
- Scent masks
- Insect repellants
- Soaps and candles
- Cosmetics, fragrances, lotions and cremes
- Naturopathic (possible application: antibacterial/antiviral applications)
Small samples of essential oils, and in some cases the distillate waters, distilled during the course of the Juniper oil project were sent to prospective buyers of such materials for appraisal. In some cases, results of the gas chromatography testing were also disclosed. Feedback from the potential customers on the applicability of the oils or waters to their products and markets was solicited.
After analyzing the potential markets it was determined that, for purposes of this market test the potential target markets broke down into the following major sectors:
- Industrial Sector: firms that supply essential oils and related blending chemicals, including artificial scents, to product manufacturers in bulk form, typically 400 pound (45 gallon) drums. Since these firms supply a great number of manufacturers that use essential oils in their products, our particular interest here was in testing whether any of them would know of a market requirement for which the Juniper oil or waters might have a unique fit. These firms are typically large distillers of essential oils, and/or are brokers and wholesale distributors of oils produced internationally or by other speciality chemical firms.
- Commercial Sector: The commercial sector breaks down into two
distinctly different kinds of customers:
- 1.) Large Commercial Segment. The companies in this segment are not necessarily always distillers but are principally volume oil brokers and distributors for oil in drum lots to oil blenders and large third party manufacturers of commercial products. Most of the commercial products produced by their customers ultimately end up at the retail distribution level for consumers.
- 2.) Specialty Commercial Segment. These firms are distributors and sometimes blenders of a wide variety of essential oils, often on a regional basis. Their customers generally purchase in relatively small (2 kg. to 10 kg.) lots, and they are generally producing specialty products in aroma therapy, naturopathic medicine, and specialty scent products for selected niche markets, including entrepreneurs doing specialty scent products at a local or regional level. These firms typically have a broad technical, product and marketing expertise, and can assist their customers in the defining and developing of new scent products. Some of these firms also do a certain amount of business in the large commercial segment for some of the more common generic oils. The Essential Oil Company is one of the firms that is in both of these market segments.
- 3.) For purposes of this project another market segment was delineated for analysis and that was the Entrepreneur/Retail Segment, defined for purposes of this project to include local Oregon entrepreneurs who might consider distilling relatively small quantities of oil which they would use themselves to create retail products for local and regional distribution, typically in either aromatherapy or the specialty scent products market.
The list of potential industrial and commercial customers used for purposes of market sampling is considered proprietary to the Essential Oil Company because of the highly competitive nature of this industry. Hence the list is not included for general distribution in this report but will be sent under proprietary acknowledgment to the program manager (Larry Swan) and the project administrator (Candice Richard at KCEDA) for their files. Requests for access to this list should be made through either Larry Swan or Candice Richard, who can then forward the request to Robert Seidel of the Essential Oil Company in Lake Oswego, Oregon.
Other manufacturers and distributors were contacted regarding the availability and pricing of competitive or similar oils, particularly those of the cedar, spruce, pine, fir and hemlock families. Following is the list of oils available in the commercial marketplace of some of the products which might be considered similar and/or competitive to Western Juniper oils.
- Oil of Balsam Fir: $10.00 per pound (50 pound drums)
- Oil of White Pine: $30.00 per pound (50 pound drums)
- Oil of black spruce: $30.00 per pound (50 pound drums)
- Oil of Western Red Cedar leaf: $20.00 - $25.00 per pound (400 pound drums)
- Oil of Western Yellow Cedar: $60.00 per pound (45 gallon drums)
- Oil of Pacific Silver Fir: $67.00 per pound (45 gallon drums)
- Oil of Douglas Fir: $72.00 per pound (45 gallon drums)
- Oil of Western Hemlock: $180.00 per pound (45 gallon drums)
- Oil of Cypress: $58.00 per pound
- Oil of Juniper berry: $75.00 per pound
- Oil of Eastern Red Cedar wood: $7.50 per pound (400 pound drums)
The above list represents pricing for various "needle" oils.
Following are the results and conclusions from the feedback obtained from the test marketing activities.
- Industrial Sector: This sector deals with bulk production and distribution of various oils, including needle oils. In that regard the bulk of their current business is for the oil of Eastern Red Cedar which carries a market price of $7.50 a pound at the industrial distribution level. They are generally uninterested in talking to potential vendors of a relatively unique oil like the Western Juniper for which their is no established volume market, and for which the end use products have generally not yet been defined. Given the fact that the oil from the Western Juniper is not remarkably different from that distilled from the Eastern Red Cedar (Juniperus Virginiana) these potential customers see it as a product competitive with the Eastern Red Cedar and therefore are only interested in talking about it at a competitive price of $7.50 a pound. Another limiting factor in dealing with this kind of customer is their tendency to only want to spend time working with distillers that are already in production and from which there is already a projected volume output that they can consider and buy. We were also limited in addressing these potential customers by the sizes of the samples we were able to give them in that a small sample for their purposes would have been a kilogram. These potential customers, therefore, were not considered viable potential target customers in the near term.
- Commercial Sector - Large Customers. The feedback from customers serving the large commercial sector segment was mixed in that they also saw the oil from the bole wood of the Juniper as being essentially the same as, and competitive with, the oil of the Eastern Red Cedar which is currently on the market. They are only interested in purchasing that oil at a competitive market price (less than $10 a pound in 100 pound drums). One of the characteristics of the potential customers in this segment are that they attempt to buy at as low a price as possible and then take a middle man's markup. They are, however, a principle distribution source for the list of needle oils given above and sell those needle oils at the prices and lot sizes given in the above list. Larger volume users can obtain discounts from them on these prices of as much as 50%. There was particular interest expressed in the oil from the Juniper leaf, with indications from some of them that they would expect to sell that product for $60 to $75 a pound to specific small target users once the market were developed for the oil. However, the estimate of price that they would be willing to pay for the oil, which would represent the distillers price to them, would be approximately $25 a pound.
- Specialty Commercial. Many of the customers in this segment are the customers for the large commercial segment brokers and distributors, and many of the firms in this segment are also blenders and provide technical product development services along with being an oil supplier. It is these potential customers that would be the market for the Juniper leaf oil at an estimated $60 a pound in relatively small quantities, typically 2 kg. and 10 kg. per order, with a 20 kg. order being a large order. These firms typically are specialty products distributors, and are often themselves in the business of blending and marketing products for the retail consumer markets, particularly in the aroma therapy marketplace. Included in the Specialty Commercial segment are the small local entrepreneurs who do specialty aroma therapy and scent products, principally for local and regional distribution. These small firms would also be prospective customers in small volume, typically at the 1 to 5 kgm. per order size, but which can be marketed to via catalog, direct mail, Internet, and general distribution vehicles.
There is a high degree of confidence that there would be a market for the Juniper leaf oil at prices ranging from $25 a pound to $75 a pound for the leaf oil, depending on the sector and the segment being served. The volume of oil required to serve this market is highly uncertain at this point because it involves the development of new scent products and the development of the markets for those products. However, as part of this project, a few dozen one ounce scent spray bottles of 20% oil solution, in alcohol, were prepared to test customer acceptance of them as a hunter scent mask product. Later, the test was broadened to include the use of that same product as a room scent, and as a scent for artificial Christmas wreathes, Christmas trees, etc. A few gift shops specializing in those seasonal products were sampled and oil spray samples were left with them. The response to both the hunter scent and the use of the same spray scent bottle as a room or seasonal scent were both very good. These products would make good entrepreneurial business opportunities. Return to Contents
Business Opportunity Conclusions
Commercial (Bulk) Products: In developing a business opportunity analysis on a commercial (bulk wholesale sales) basis, the following assumptions are in order.
- The analysis for bulk production and marketing of leaf oil (without the marketing of the distillate runoff waters) will be the baseline. Other cost and revenue assumptions will be estimated relative to leaf oil on an appropriate business basis.
- Cost for the production of a given volume of both leaf and wood oil is the same, given all tradeoffs.
- Marketing and selling costs are estimated at 20% of revenue for all saleable products.
- G&A, and other expenses, are fixed at 20% of leaf oil revenue, and are assumed the same for a similar volume of wood oil.
- Marginal cost and revenue estimates for the sale of the distillate waters are considered to be marginal to the oil costs, and are estimated accordingly.
- Each 0.10% yield is equivalent to 2 pounds of yield (1 quart: 32 fluid ounces) on a distillation yield of 2000 pounds.
- The market price of leaf oil is $60.00 per pound. The market price for wood oil is $7.50 per pound.
- Assumes the business is dedicated to the distillation and marketing of Juniper Oil, and that oil distillation is not a secondary by-product of other Juniper processing operations.
Using a standard production unit of one ton (2,000 pounds) of materials as the standard production unit for cost estimates, following are the profitability profiles for both leaf and wood oil, at different process yields.
Profitability Profile: Leaf Oil
|Marketing and Sales||72||96||144||192||240||360|
|G&A, and Other||96||96||96||96||96||96|
|Gross Profit (loss)||($168)||($72)||$120||$312||$504||$984|
|Gross Profit (%)||(47%)||(15%)||17%||32%||42%||55%|
Profitability Profile: Wood Oil
|Marketing and Sales||9||12||18||24||30||45|
|G&A, and Other||96||96||96||96||96||96|
|Gross Profit (loss)||($420)||($408)||($384)||($360)||($336)||($276)|
|Gross Profit (%)||(993%)------------------------------------------------------------>(123%)|
A profitability analysis of marketing the runoff distillate runoff waters, at $1.00 per gallon, once the market for this produce were fully developed, would be as follows, at a standard yield of 300 gallons of waters for each ton of materials processed.
Profitability Profile: Waters
|Product (gallons)||300 gal.|
|Costs Production (10%) Marketing & Sales (20%) G&A, Other (5%) Total Costs||$30 60 15 $105|
|Gross marginal Profitability||65%|
For an established business selling both oil and waters, the profitability profiles would be as follows:
Profitability Profiles: Oils and Waters
|Gross Profit (oil)||($168)||($72)||$120||$312||$504||$984|
|Gross Profit (waters)||$195||$195||$195||$195||$195||$195|
|Total Gross Profit||$27||$123||$315||$507||$699||$1,179|
|Gross Profit (%)||4%||16%||31%||40%||47%||56%|
|Gross Profit (oil)||($420)||($408)||($384)||($360)||($336)||($276)|
|Gross Profit (waters)||$195||$195||$195||$195||$195||$195|
|Total Gross Profit||($225)||($213)||($189)||($165)||($141)||($81)|
|Gross Profit (%)||(Loss)------------------------------------------------------------------>|
These analyses show the difficulty of making a profitable commercial business out of the distillation of oil from Juniper wood on a dedicated business basis, even if the waters from the process are marketed. However, the distillation of Juniper leaf oil shows promise, but is much dependent on the estimated market price for the oil ($60.00 per pound) for which there is not an established market -- or a truly competitive product -- today (see Test Market Results.)
Following is a graph which shows the changing profitability of leaf oil as process yield changes, with and without the marketing of the associated distillate "waters".
The critical determinants driving the viability of a Juniper oil business in the commercial marketplace are:
- Product price
- Process yield.
This project has shown that, even given reasonable extrapolations for economies of scale, at the current market price of $7.50 per pound (competitive with Virginia Red Cedar -- Juniperus Virginiana oil), and with maximum anticipated product yields of 1.5%, the business would still not be profitable. Both price and yield would both have to increase 50% - 100% in order to make this a viable business opportunity.
An except to the above statement would be a case where a distiller could set up in conjunction with an existing Juniper processing operation and use (free) readily available waste materials. Processing (distillation) and other costs would remain the same, however $210 of production costs (per 2,000 pound batch) could be saved by not having to harvest and transport Juniper materials. Though this would help, it would only change the wood profile as follows:
|Oil and Waters||($15)||($3)||$21||$55||$69||$129|
If a commercial market could be found for the distillate waters, then this scenario takes on a modest business attractiveness at the upper end of the anticipated yield spectrum.
Using price/positioning estimates based on the markets for other needle oils, the business potential for Juniper leaf oil is attractive, particularly if yield can approach those achieved by Kurth and Ross in a pressure distillation system (1.0% - 2.0%). The break-even point for leaf oil is at a yield of approximately 0.5%, that almost achieved in the projects small, zero-pressure distillation apparatus. This without considering the potential for revenue from sale of the distillate "waters".
If estimates of leaf-oil process yield and market price are reasonably correct, and if the distillate waters can be marketed, then the distillation of leaf oil becomes a very attractive business opportunity with gross profit of 42% at the 1.0% yield level, and 55% at the 1.5% yield level.
Market sampling has shown that there is opportunity to enterprising entrepreneurs to make a business of distilling Juniper, and possibly other aromatic botanicals, for use in their own specialty retail products (see Test Marketing Results). The products for this opportunity would be pre-packaged oils and other specialty "scent" products for home, commercial, aroma therapy and other "mood" applications, as well as for the hunter's scent - mask market.
For this business opportunity only a modest-size distillation unit would be required (the 250 pound capacity still used in this project is a good example). The key to business viability comes from using oil to create a large volume of small, pre-packaged retail products from a small volume of oil. Oils are often packaged down to 1/4 oz. sizes (or less) for a pure oil, and other spray-scent products are a mixture of oil and alcohol in a 5% or 10% (1/20 or 1/10) oil/alcohol solution. This provides enormous product and revenue leverage from small amounts of oil. It does require, however, that the entrepreneur be prepared to do the packaging, marketing and selling of the products (at wholesale) to the appropriate customer (chain stores; gift shops, etc.). A business analysis for this opportunity follows:
- Distillation process yield will be that used in determining a standard expected yield from a small, zero-pressure still as was used in this project -- meaning an expected minimum yield of 0.40%.
- Harvesting, materials preparation and distillation costs will be the same as estimated previously in this report -- $925.00 per 2,000 pounds of material processed.
- Either the leaf oil or wood oil will be equally useable for these products (however, leaf oil may be somewhat preferable).
- Wholesale value of the pre-packaged products is 50% of the retail price.
- Based on market investigations, retail prices for comparable "pure" oil scent products is: $8.00 - $10.00 per 1/4 ounce of the oil; $4.00 to $6.00 per ounce for 10% solution pre-packaged spray scent products.
- Packaging, marketing and selling costs are 30% of revenue for the pure oil, and 40% of revenue for scent sprays because of the additional materials, blending and packaging costs.
- The greater of these estimates will be used for purposes of this analysis because of the uniqueness and quality of the Western Juniper oil-based products.
Profitability Profile: Packaged Retail Products
|1/4 oz. Pure Oil||One Ounce Scent Spray|
|Raw Oil Product||1.0 gallon||1.0 gallon|
|Packaged Sale Items||512 bottles||1,280 spray ounces|
|Packaging, Marketing & Sales||768||1,536|
|Other Business Exp.||256||384|
|Gross Profit (%)||24%||26%|
If the oil were commercially available at $480 per gallon wholesale, as estimated in the commercial analysis, rather than having an entrepreneur distill it themselves at a cost of $925 per gallon, the profitability of a retail products business would look as follows.
Profitability Profile: Packaged Retail Products
Using Purchased Commercial Oil
|1/4 oz. Pure Oil||One Ounce Scent Spray|
|Packaging, Marketing & Sales||768||1,536|
|Other Bus. Exp.||256||384|
|Gross Profit (%)||41%||38%|
- There is a very high revenue leverage in developing specialty niche products for retail markets.
- Modest investment would be required (est. $10,000 - $20,000) and a low- cost access to Juniper would be required.
- There is no direct equivalent competitive products available today. The Western Juniper essential oils market remains largely untapped at the retail level. A unique market position is available for enterprising entrepreneurs.
- Business profitability is adequate (est. 25%) for product pioneers who do their own distilling in small batches. Enhanced profitability (40%) would come from being able to purchase the needed raw oil on the "bulk" commercial market.
- As is true with many products, the business leverage comes from the business acumen needed to define and serve retail markets with new products. The key to doing this, however, will be marketing and distribution savy, and the working capital needed to support these activities in the early stages of the business.
- To complement the basic oil-based scent products a variety of low-cost, high-margin products such as scent rings, candle-heated vaporizers, etc., can be distributed along with the scent products. In addition, once an oil supply is available, items such as scent soaps and candles can be produced to specification by third-party manufacturers and distributed at high margin to the aroma markets.
- In summary, there is a window of opportunity for entrepreneurial ventures in supplying retail scent products based on Western Juniper oil derivatives.
(1) E.F. Kurth and J.D. Ross (1954), "Volatile Oil From Western Juniper", Report #C-3: Oregon Forest Products Laboratory, Oregon State University.
(2) Robert P. Adams (1987), "Investigation of Juniperus Species of the United States for New Sources of Cedarwood Oil": Economic Botany, New York Botanical Garden.
(3) H.L. Gholz (1979), "Structure and Productivity of Juniperus Occidentalis in Central Oregon": School of Forestry, Oregon State University.
(4) Robert P. Adams (1987), "Yields and Seasonal Variation of Phytochemicals from Juniperus Species of the United States": Biology Department, Baylor University.