The flavour and fragrance industry experienced a shortage of patchouli oil in 2010 when soggy weather gave Indonesian growers a poor harvest of Pogostemon cablin, a perennial shrub in the mint family that is the source of the fragrant oil. That disappointment was followed by volcanic eruptions in the islands, which spawned earthquakes and a tsunami, further disrupting supply.

The patchouli market has since recovered. “Prices have come down over the last couple of months. It is a good moment to buy now before the demand starts to pick up,” advises Eramex Aromatics, a German supplier of flavour and fragrance raw materials, in its March 2012 market report.

The same cannot be said for some other flavour and fragrance raw materials. Among the difficult-to-source oils, Eramex reports, are bitter orange, grapefruit, rose, and sandalwood. Price swings and supply disruptions can be caused by disasters both natural and man-made. They include droughts and floods, as well as poaching and government corruption in the far-flung regions where many essential-oil crops are grown by small landholders.

It is no wonder, then, that purchasers of fine-smelling and -tasting substances would seek alternatives to nature-grown materials. Indeed, major flavour and fragrance houses such as Givaudan, Firmenich, and International Flavors & Fragrances are intrigued by the possibility of using biotechnology to produce key components of essential oils from abundant sugar feedstocks via fermentation.

For assistance, they are turning to the growing number of biotechnology start-ups that are targeting the flavour and fragrance industry. These firms, which include Allylix, Amyris, Isobionics, and Evolva, claim their microbial platforms can produce just about any plant-derived molecule. Once they scale up, they say, supply shortages will be a thing of the past.

The move toward biotech routes for these high-value molecules has also attracted interest from the big chemical firms DSM and BASF. DSM spun off Isobionics in 2008 and has been working closely with the 10-employee firm since then. In March of this year, BASF announced that its venture arm has invested $13.5 million in San Diego-based Allylix.

Curiously, both Allylix and Isobionics are promoting the same two citrus molecules — valencene and nootkatone — as their first products. Valencene is extracted from the peel of the Valencia orange. Nootkatone comes from grapefruit peels but can also be produced from valencene. Both are currently used in fruit-flavoured beverages and in perfumes but have potential for use in personal care and cleaning products.

Industry experts say it is too early to tell what portion of the market for flavours and fragrances might move to biotech production. The overall industry, including synthetic molecules made from petroleum feedstocks, was worth $21.8 billion in 2011, according to flavour and fragrance consulting firm Leffingwell & Associates.

The ability to make high-demand molecules such as valencene and nootkatone through fermentation could significantly alter supply dynamics, says Kalib Kersh, an analyst at consulting firm Lux Research. “There is potential for biosynthetic routes to completely replace any natural sources,” he observes…..

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