Sniffing out new outlets for lavender oil

ALAN WOOD
Last updated 05:00 28/12/2013
Philip Simms and Owen Dexter of NZLavender

PURPLE FIELDS: Philip Simms (right) and Owen Dexter (left) started NZLavender 10 years ago.

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The owners of a large lavender farm say business is blooming with the latest summer crop and work to open up fresh export markets into China and the United States by February.

Philip Simms and Owen Dexter started the NZLavender business 10 years ago, with the first harvest in 2006.

More recently they have found competition in the bulk oil sector fierce, so there is a renewed focus on branded oils for the retail market, which already includes health shops and chemists in New Zealand.

A small bottle usually sells for between $10 and $12.

The US and China are the latest planned export markets, and the pair have received approval from the US Food and Drug Administration for their packaged product, licensed as a cosmetic product rather than a medical drug.

NZLavender is also hoping to get a licence by February to enable sales into the Chinese market.

The company worked with a consultant to make sure it met the requirements under the US regulations.

The main use of the lavender is an aromatherapy oil, rubbed on the temples or back of the neck to help with sleep and stress relief.

"We've just done new packaging with FDA approval, so we're launching in America with the retail packaging and in China. That [product] will be released in February," Simms says.

Part of the US sales would be driven through the Base3usa shared warehouse and distribution centre, located in Georgia but working on behalf of Kiwi companies.

"[Initially], the goods are sent over there. You just email the orders to them and they just package them up and send it through to your customers."

NZLavender's 20-hectare farm, located south of Dunsandel, already exports into around 17 countries.

At harvest time they produce 1000 litres or a tonne of pure lavender oil distilled from the flowers. Competition comes from countries like Bulgaria, the biggest producer of lavender oil in the world. The bulk oil sells for between $200 and $250 a kilogram. "The commodity market is pretty tight and ruthless, that's why we now fill it throughout New Zealand as a retail item and that's why we are going to go directly to China and America as a retail item," Simms says. "With the retail packaging we can get between four or five times that [price]."

NZLavender would continue to serve some export clients who used it for the manufacture of cosmetics or rebottled the oil.

Not all the farm has been developed into lavender, though the owners have 110,000 plants, based on a cultivar developed at the Christchurch Botanical Gardens.

They import blue glass bottles from Germany to use for retailing, but use Christchurch contractors to help label and package.

Simms says the lavandula angustifolia plants produce hypoallergenic, pharmaceutical-quality lavender oil known for its soothing properties. China's urban population, often living in crowded cities, was "into" essential oils as a form of relief for the overcrowding.

Simms was a veterinary surgeon and partner Dexter a dairy farmer. But they retired, selling businesses to invest in the farm as a new venture.

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"I said I didn't want any livestock and he said he didn't want to go back to the land, so somehow we ended up with lavender."

To help with marketing, they have engaged Carol McGeady as an international sales manager. McGeady, who previously created Cariboo, had contacts in American babycare and retail shops.

Simms says it is probably one of the largest lavender farms in Australasia. The pair do the bulk of the farm work - the planting, weeding, harvesting and distilling of the oil, the never-ending weeding by hand, the watering, the accounts and designing the marketing material.

Converting the lavender flowers into oil is a relatively short process, done at a relatively low temperature so as not to damage the oil and its properties.

- BusinessDay

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