By  on July 16, 2010

CANNES, France — How the fragrance industry should reinvent itself was the principal talking point at the recent World Perfumery Congress.

Its speakers included Jean-Paul Agon, L’Oréal’s chief executive officer, plus executives from India and China for the first time. WPC’s 700 attendees came from 39 nations (with a large contingent from Brazil), and there were 57 exhibitors, including 14 new ones.

“It seems obvious that with the huge drop in sales in the last couple of years, at least in fine perfumery, our business model has been seriously challenged. Perhaps it’s time to reshape it,” suggested Jean-Pierre Subrenat, president of Creative Concepts Corp. and chairman of the WPC.

Agon agreed change is in order. “Our world is changing dramatically; major transformations are shaking it up and redefining its contours,” he said. Agon cited some examples, including how the natural environment is giving rise to serious concerns; how the economic situation and demographics are undergoing profound shifts, and that in the more mature markets, the theme of sustainable development is firmly anchored in consumers’ minds.

L’Oréal, said Agon, has identified six major fields of reinvention for “sustainable success and leadership.” These are comprised of sustainable innovation, sustainable production, sustainable consumption, accessible innovation, “universalization” — including cultivating the diversity of the brand portfolio and distribution channels — and corporate citizenship.

Michel Mane, president of Mane Americas, was among the many other executives maintaining that sustainability must be a core industry value.

“As consumers of biological diversity, we need to reengineer our existing supply chains or develop new ones for which organic farming is encouraged, and practices inspired by the principles of the [Union for Ethical BioTrade] are more widely supported,” he said.

The fragrance industry also has to cater to a changing consumer.

“Traditional consumer segments like ethnic communities will continue to evolve, and new segments centered on lifestyle will appear,” said Jack DiMaggio, managing director of global fragrances and the flavor business unit of Colgate-Palmolive Co. “Tomorrow’s consumers will continue to treasure their homes as a sanctuary, but their homes will reflect emerging social, environmental and security sensibilities. This new consumer is informed and occasionally even wants to be involved in the design of products. The shopping venues of tomorrow will include traditional channels like grocery in mass but also new direct-to-home and lifestyle retailers will be appearing. Virtual communities and groups may offer the most attractive targets yet.”

There was buzz about social media.

“It creates opportunities, provides insight, reveals trends and real-time information but, above all, I think it encourages innovation and inspiration,” said Tim Sinclair, chairman of Wolfstar. “It gives you an opportunity to express yourself. Social media works well if you are passionate.”

Innovation outside the virtual world is key, too.

“I believe, in the long term, the only basis for profitability in this industry is based on proprietary, patented new aromachemicals that enable entirely new levels of product performance and cost efficiency,” said Stephen Hicks, director of research and development and flavors and fragrance global capability at Procter & Gamble Co.

“We must strive to bring a clear identity and more sophistication to our scents for more impactful launches,” continued Benedicte Bron, associate vice president of creative fragrance at Beauty Avenues. She added that other important qualities are diversity and an olfactive point of view.

The overall sentiment at the WPC, which ran from June 1 to 4, was optimistic.

“Fragrance has the ability to touch the consumer emotionally, physiologically and spiritually,” said Harvey Gedeon, executive vice president of global R&D and corporate product innovation and package innovation at the Estée Lauder Cos. Inc.

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