Principal Teacher, Commerce Unit
Southern Queensland Institute of TAFE
PO Box 80, Toowoomba, 4350
(07) 4694 1670 or (0412) 714 548
Facsimile: (07) 4635 2078
In 1995, Solar Distributors Pty Ltd, as part of its strategic planning, looked into ways of diversifying its activities.
Medicinal herbs were identified as a rapid growth area. Tea-tree, skull-cap, Echinacea, Eucalyptus and chamomile were all considered. Chamomile was selected and the company has been supplying the Australian market since 1996.
Research into chamomile indicated that there are a number of plants known as chamomile belonging to several genera. Two, however, are of significant economic importance: German Chamomile Matricaria recutita and Roman Chamomile Chamamaelum nobile. These are grown in a number of overseas countries and imported into Australia to supply our needs.
Chamomile has long been a popular panacea of ills. It has been grown and used since the days of ancient Egypt. Down through the ages, people have turned to chamomile as a remedy for numerous medical complaints - nausea, nervous complaints, childrenís ailments, skin diseases and so on. Recent and on-going research identifying its specific anti-inflammatory, anti-bacterial, anti-allergenic and sedative properties has to a large extent validated chamomileís long-held reputation and appears to be increasing the popularity of this herb. (Salamon, 1996)
Identification of the active chemical components of the essential oil (eg. Chamazulene and alpha Bisabolol) has led to the development of new chamomile species, with higher yields of oil and higher ratios of specific components.
Product - Can I sell it?
What is the Product?
Chamomile can be marketed wholesale in three main forms: as the dried flower, as steam-distilled essential oil and as solvent-produced extracts.
Dried flower. The main product is the dried flower which is used for tea or natural medicine preparation. There is a demand for organically-grown product in the medicinal tea market although it is not practical in Australia to grow on a large scale due to labour costs. The tea, perfumery and therapeutic markets require the dried flower whole and generally donít demand specific oil components percentages . However, some natural medicine manufacturers require the dried flower from specific varieties of chamomile that will produce a high yield of specific chemicals, in particular, chamazulene and bisabolol.
Chamomile Oil. Chamomile oil can be produced by either steam distillation or solvent extraction. The higher priced blue chamomile oil (essential oil) is produced by steam distillation.
Flowers & plants. There could be an undeveloped market for chamomile whole plants and cut flowers.
Where is the product sold and to whom?
The dried flower is bought by tea companies, natural medicine manufacturers, makers of herbal extracts and health food shops. The floral water and the oil are bought by agents to supply cosmetic and aromatherapy companies. There is occasional demand for the fresh flowers, both cut and potted, for use in herbal displays. It is envisaged that this market could be expanded to include 'get well' floral gifts. .
How big is the market?
Australian Market. The Australian market is not large but discussion with wholesalers and manufacturers indicates growth. Evidence of this growth is evident on supermarket shelves where chamomile tea proliferates. Five years ago, there was a very limited range of chamomile in the supermarkets and the main outlet was the health food shops. In 1995, it was estimated that Australia imported approximately 7 tonnes annually plus 7 kg of the essential oil (based on estimates from wholesalers). In 1998 this figure is estimated to have risen to 20 tonnes of dried flower and 20 kg of essential oil.
Overseas Market. The world market, also, is growing. World wide production figures are difficult to find, due to the small scale of chamomile farming and the fact that statistics generally do not quote chamomile separately from other herbs. In 1995, we estimated world production to be approximately 5,000 tonnes of dried flower per annum from large scale farming. Current (1998) figures are estimated to be 10,000 tonnes of dried flower per annum from large scale farming. The world figure for chamomile blue essential oil in 1989 was 5.4 tonnes. (USDA, 1989 cited in Herbs and Essential Oils, 1995)
Continuity of demand
The Australian market requires not more than 20 tonnes per year at present, but this figure is growing. Discussion with one herbal medicine manufacturer indicated that Australian buyers are used to including chamomile with their overseas herb orders. Some education of the market has been required to encourage Australian buyers to consider switching to a home-grown product. Another important factor in developing Australian markets has been the need to establish confidence in the continuity of Australian supply. Local buyers do not want to risk losing overseas sources.
The world market has run short on supply by March when the northern hemisphere crops are being planted for harvest in June. Australian buyers of quality high oil content flower find they have to wait in line behind the large European medicine manufacturers if they wish to obtain large quantities.
The essential oil and chamomile water market is difficult to ascertain. There appears to be an excess supply on the world market at present and only a small number of Australian buyers who are not sure of the quality their clients require. The market for chamomile water is variable.
How much money do I get?
Price is largely regulated by the world supply and demand. Chamomile is presently being produced in countries with low labour wage costs. This can make it difficult for an Australian farmer to compete unless there is a fair degree of value adding. However, there appears to be potential for premium quality lines in niche markets as Australian produce becomes sought after as a 'pollution free' product.
The 1997 world price for dried chamomile flower ranged from $1000 per tonne for low grade to approximately $16000 per tonne for high oil content flower. Bulk Botanical Herbs, 1997, advertises organically grown chamomile on the Internet at $US28 per pound.
How do I get it to market?
In what form/product?
The primary product, dried flower, is generally sold as a dried whole flower-head. Harvesting is by hand or special machinery with expensive sorting and stem cutting equipment. The drying process is simple and done on the farm with low technology if you are prepared to rely on the weather. This may be supplemented by using a gas, solar air heating or heat pump system.
The flower can undergo further processing on the farm beyond drying. As evidenced from the range of products available in the supermarket, most chamomile in Australia is consumed in tea bags. This milling is a relatively simple process not requiring complex or expensive machinery. However the tea bagging machines can cost $100 000.
The steam-distilled chamomile blue essential oil and high grade floral water can also be produced on the farm with basic homemade equipment or capital outlay up to $50 000
With less complex and expensive equipment the flower can be solvent-extracted to produce chamomile essential oil which can be value-added further into floral waters, soaps and medicinal bases.
What processing and packaging is required?
Dried chamomile flower is normally carefully graded then sent to market in plastic-lined bags. The milled flower for the tea bag market uses the same type of bag. The chamomile blue oil is shipped in small, dark-coloured glass bottles. Plastic containers are used for larger quantities if storage is only a matter of weeks. The chamomile water is shipped in food-grade 200 litre drums.
The dried flower is light weight and transport costs are equivalent to volume cost. The oil and chamomile water costs are based on weight.
The whole plant requires specialised nursery transport companies and deliveries are costed on weight.
Impediments - Who is going to stand in my way?
The Australian industry is in its infancy with nearly all product currently imported from overseas. In 1995 there were no large scale suppliers of chamomile in Australia. It had been tried a number of times without apparent success. The most recent attempt was by Gary and Joy McDonnell at Mundubberah who completed useful marketing and plant production research. They also completed planting density trials with CSIRO but were defeated by the drought (and a fire) in 1995.
There are some boutique growers in Australia who are supplying chamomile for medicinal tea and potpourri. The largest grower contacted to date is growing less than one hundred square metres. Solar Distributors Pty Ltd successfully harvested up to eight acres in 1996 and 1997.
Chamomile is presently grown commercially in:
Belarus, Slovakia, Ukraine, Finland
According to wholesalers, much of the chamomile for tea consumption in Australia is supplied by Egypt at a very competitive price. Most of the higher quality chamomile used by the manufacturers of herbal extracts for the pharmaceutical, functional foods and cosmetic markets is imported from Slovakia.
To date, the important anti-inflamatory components of chamomile have not been chemically synthesised and according to Slovakian researchers this is not likely to happen for some time yet.
How can I improve my chances?
Sources of information
Current information on chamomile is difficult to come by as chamomile is not classified separately but is listed in statistics along with other herbal teas and essential oils.
To date sources of information have been:
There is no industry group in Australia. Some information and assistance may be available from overseas growers and researchers.
For chamomile production in Australia it was Gary and Joy McDonnell of Mundubberah who are now out of the business.
The prime source of information for growers in South East Queensland is Peter Blessing from the DPI/UQ DOOR-Marketing New Crop Project at University of Queensland Gatton.
QDPI provide assistance where they can but have no previous experience with this crop. Peter Walsh and his engineering team at DPI Toowoomba have assisted with harvester development and research assistance.
RIRDC funding over recent years has included essential oils and plant extracts..
Funding for two research projects has been sought in Queensland in 1996. One from RIRDC to research harvester and distillation equipment was not successful. A second is awaiting consideration from the International Science and Technology Branch of the Department of Industry, Science and Tourism.
Some promotion is necessary to convince wholesalers of the superior quality of Australian chamomile and of the advantages of a regular supply of high grade chamomile. A reasonable percentage of the population already uses chamomile tea making it most probably the most popular herbal tea after standard (camellia) tea and chinese tea.
SWOT Analysis used by Solar Distributors Pty Ltd
a suitable climate is present in Toowoomba
basic processing equipment was obtainable
money was available for start-up costs
staff had basic farming knowledge
principal had strong marketing background
suitable land was available
company secretary had a background knowledge of alternate medicine
staff had absence of large crop experience
staff had no previous knowledge of growing chamomile
there was a difficulty in replicating northern hemisphere conditions
there existed a growing demand for the product
there was no Australian competition
verbal encouragement and support was given by some Australian buyers
the Balkan wars had temporarily reduced world supply
there was some previous Australian research material available
the high Australian cost of production
the low world market price
the high cost of water/irrigation
Slovakian research material available but nobody qualified to translate it.
List of References
C.B Alexander Agricultural College(sponsored by RIRDC) 1995, Herbs and Essential Oils, Conference and Workshop, 19 -21 April.
Salamon Dr I. (1992) 'Production of Chamomile in Slovakia ' Journal of Herbs, Spices and Medicinal Plants Vol. 1 (1/2)
Contact: Dr Rob Fletcher, School of Agriculture and Horticulture, The University of Queensland Gatton, 4343; Telephone: 07 5460 1311 or 07 5460 1301; Facsimile: 07 5460 1112; International facsimile: 61 7 5460 1112; Email:email@example.com
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Latest update 30 October 2000 by:RF