Morice Land and Resource Management Plan

Market Analysis

The global market for natural products was estimated to reach US $128 billion in 1999. The US accounts for 34% of the global market, followed by Europe (33%), Japan (18%), rest of Asia (7%) and Canada (3%). Growth is anticipated to continue at a rate of 7% worldwide.

Annual manufacturer sales of dietary supplements, herbal preparations and functional foods are estimated at $550 million. The largest proportions of annual sales under $250,000 are in the retail producers/growers and ingredient supply businesses. Companies with sales exceeding $10 million annually are found in the packaging, product manufacturing and distribution / marketing sectors. Mid-sized companies ($250,000 to $10 million) dominate in laboratory/testing, custom and ingredient processing.

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  St. John’s Wort (approximately l50, 000 lbs)
  
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  Oregon Grape (20,000 lbs.)
  
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  Cedar Oil (around 6,000 lbs.)
  
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  Devil’s Club (less than 5,000 lbs.)
  

Medicinal botanicals wildcrafted in smaller quantities included

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  Nettles,
  
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  Burdock,
  
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  Yarrow,
  
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  Mullein,
  
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  Arnica,
  
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  Chamomile,
  
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  Tansy,
  
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  Rose Hips,
  
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  Cascara,
  
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  Yew,
  
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  lichens such as Usnea wirthii
  

Indigenous medicinal BC plants much in demand on the European herbal markets include:

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  Devil’s Club (increasingly used as a ginseng substitute in herbal formulae)
  

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  Cascara bark
  
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  St. John’s Wort
  
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  Black Hawthorne (Crataegus douglasii)
  
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  Mountain Ladyslipper (Cypripedium montanum, a threatened orchid
  
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  Hemp Dogbane (Apocynum cannabinum),
  
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  Equisetum pratense (horsetail)
  
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  Circaea alpina (nightshade)
  
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  Valerian sitchensis
  

Market Opportunities: Product Selection

Market opportunities for medicinal products in the Morice LRMP area should focus on niche value-added products. There is little profit to be made in selling bulk dried or fresh botanicals unless the plants are located in areas accessible to transportation routes and harvest and preparation time can be reduced to a maximum of two or three hours per kilogram. It is unlikely that many of the plants in the Morice LRMP area would be easily marketed in this fashion with the exception of Devil’s Club which commands a dried bulk price of between $60.00 and $160.00 per kilogram wholesale, with the harvester being paid approximately one quarter to one half the wholesale price. Devil’s Club has the potential to become a very important herbal remedy due to the possibility of success in treating tuberculosis as well as other applications. The other exception is Western red cedar foliage. Due to the somewhat regional isolation of the Morice LRMP, shipping bulk dry or fresh medicinal products to wholesale markets in the major centers to the south could be cost prohibitive but not insurmountable

The issue of First Nation’s proprietary rights, historical and ceremonial use, traditional knowledge including product prescreening of native species, as well as treaty rights will require separate discussion and can not be addressed within the scope of this analysis.
Depending on the traditional and cultural viewpoint of local First Nations regarding commercialization of medicinal species, there could be a small to medium size enterprise opportunity for First Nations’ communities or other entrepreneurs to develop traditional use products or specialty products. The focus on First Nations or pioneer heritage remedies would be a natural marketing tool for niche products. This does not preclude, however, the fact that non-First Nations peoples and/or communities could embark on some level of commercialization of medicinal species. The unique opportunity for value-added products lies in the fact that they require fewer raw materials and sell for a higher price premium than bulk dried pharmaceutical or botanical products.
Because the adventure tourism, guide outfitter sector and sport fishing industries are well established in the area, it may be prudent to develop a series of products or travel pack kits that offer botanical first aid and cold remedies tailored for the outdoor enthusiast. Plant species such as Willow and Poplar can be formulated into skin creams and salves for use on sprains and burns. Willow is also used as an analgesic in the same way as aspirin and can be used as a tea or refined encapsulated. Poplar can be used as a tincture or syrup for treating coughs. Devil’s club has antiviral, anti-bacterial, anti-fungal properties and can be used as a respiratory stimulant as can Western red cedar. Western red cedar has antiseptic properties and Uva Ursi is a worthy astringent. Rosehips from the Prickly Rose bush may be used in dried tea in combination with other plants such as, raspberry leaves, wild mint, Labrador tea, and dried berries to act as a good source of Vitamin C without the bulk of carrying fresh fruit. Huckleberry juice could be combined with herbs such as Devil’s Club and local honey to create cough syrups or herbal infused juices. Fruit leather can be made from berry mash and by incorporating a combination of dried berries, is another addition to a product line geared towards the outdoor tourist. Novel packaging that is single portion, airtight and waterproof would be optimum for creating travel kits or juices targeted for an outdoor market. Brand identification should focus around the First Nations or pioneer theme, and be sophisticated and upscale.
Another enterprise that may be considered could be the distillation of essential oils from cedar, fir, spruce and pine logging waste and tree limbing. Large quantities of material are required for the production of essential oils but with a well co-coordinated program between forestry operations and a potential distillery it may be possible to build an enterprise that could collect bark, boughs and branches from areas adjacent to the Morice LRMP area as well as from the Morice. Because the product is high value and is usually packaged in relatively small containers, shipping costs of the final product would not be prohibitive. Essential oil is sold in 10-15 milliliter bottles for retail sales and may be sold to soap-makers and candle-makers in larger quantities. Currently, there is still good market growth potential for high quality conifer oils. Canada Post most effectively handles shipping of all products therefore a separate transportation analysis will not be provided.
Cedar oil also as an industrial application, however the distillation process for this crude oil would be at a different scale than for essential oil production and is not considered in this analysis.

Sales Channels

Sales channels for botanical first aid and cold remedy products and first aid kits as well as infused juice or berry fruit leather would be to tourist locations, sports shops, grocery stores, guide outfitters and natural food stores located in the Morice LRMP as well as in the larger centers of Smithers and Prince George. Approaching larger retailers such as Mountain Equipment Co-operative and Valhalla Pure Outfitters in Vancouver would also be a possibility as the clientele has an affinity for natural products. Airport and B.C. Ferries gift shops are other candidate market channels.

The essential oil market is large and varied. Essential oils sourced from conifers have a heavy market in the Christmas candle, potpourri and burning oil sector but conifer oils are used for therapeutic and aromatherapy purposes as well. Spas, salons, health food stores and gift shops in small and large centers are natural targets for essential oil products. Website sales would be an advantageous market for these products.
Separate from these products, Aveda Cosmetics is initiating a First Nations line of products and is hoping to source certain raw materials from First Nations enterprises. While the list of indigenous plants Aveda is seeking occurs in the southern portion of the province, there are some species that can be cultivated in more northern climates.

Production Facilities and Location

Exclusive of construction costs and consumable costs, equipment required for the development of a botanical production facility would vary depending on the type of products that would be created and the scale of operations desired. A small-scale plant for producing a variety of herbal remedies at a cottage industry scale would cost approximately $15,000-$20,000 to set up.

Conversely, developing a medium sized plant, which would be capable of producing the types of products discussed in this analysis, could cost up to $275,000 in capital equipment costs. Included in the list of equipment needed would be washing equipment, cutting and sorting tables, dryers, steam kettles, a hammer mill, vacuum sealers, steam distillation units, bottle filler, labeler, etc.
There could be some thought put into combining a medicinal production facility with other enterprises such as a fish cannery or berry production facility. Experts in designing food production plants may be able to design a facility to overlap equipment required for production or packaging.
Production of first aid containers or kits would provide another opportunity and would require additional investment in a cutting table and industrial sewing machines.
Within the Morice LRMP area, Houston would seem the likely candidate area for a botanical production plant. Transportation routes from Houston and a youthful population to supply a labor force would be an advantage. However, Granisle may be another suitable location in that it is situated in an area where there is a lower level of yearly income and recreation and tourism activity is high, thereby creating an opportunity for the plant itself to be a tourist attraction. First Nations initiatives would be naturally located in an area that would provide the most benefit for community employment.

Employment

The labor force required for a botanical enterprise or the amount of self-employment generated by developing a botanical enterprise will be dependent on the nature and size of the business. There would be employment opportunities in harvesting and or cultivating plants from the wild, preparing the material for value-added production and for each step of production of the products. Administrative work in marketing and financial management would also be required.

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