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Nicolas Mirzayantz, group president of fragrances at IFF, has an endless fascination with the world around him. Possessed of a kinetic energy that propels him one moment to visit consumers in rural India to discover how they live, the next to hone in on an emerging creative force in one of the world’s capitals, Mirzayantz has helped build IFF’s fragrance division into a $1.4 billion powerhouse. Here, he talks experience, innovation and interconnectivity.
This story first appeared in the August 10, 2012 issue of WWD. Subscribe Today.
What is your current assessment of the fine fragrance industry and where do you see the most opportunity?
The market has evolved a lot, going from facing many challenges in 2009 to a strong rebound in 2010. We see the convergence of different forces—2011 was the first time in a long time we had growth in North America and in the UK. We saw also the influence of travel and travel retail—more people traveling with more disposable income, having access to new brands, creating additional demand, especially travelers from Asia and Latin America.
Brazil continues to be the growth engine for the market. One of the biggest drivers there is the population growth. A staggering number is that 32 million people moved from class D to class C in Brazil from 2002 to 2009. Class C now represents the majority of Brazil’s population—close to 52 percent—100 million people who represent 63 percent of the consumption potential. At the same time, 7 million people rose to class A and B, and they represent 37 percent of the consumption potential. Another driving force is the Middle East, where we are seeing significant growth in consumption. One interesting trend is that global prestige brands are creating specific offerings for the regions.
What does the industry need to pay attention to most?
Consumers are looking for sensorial experiences. They find it in the entertainment industry, in music, the digital space. We have to create that experience and to some degree bring the back stage to the front to redefine the fragrance experience. Products have to go beyond pure functional benefits and provide that element of sensorial stimulation. You have this duality between the digital world and the authentic sensorial experience. The changing consumer needs are a very unique opportunity for the industry. Right now, the digital space is starved for content and our industry is very rich in content. It’s about engaging consumers with that content, and telling the story. IFF has been at the forefront of creative collaborations between perfumers and outside entities like artists, fashion designers and editors.
Why is it so important to keep your perfumers creatively inspired?
It is all about content, creativity, connectivity, about our perfumers being connected to the designers and artists who are not going to define the trends but who create the trends. It’s about being upstream as much as we can, to find who and what will be the influencers of tomorrow and help us find what that new sensorial environment for consumers will be. When I look [at our programs] with the Royal College of Art in London, the Antwerp School of Design, the École des Arts Decoratifs in Paris, the artists who won our prize 20 years ago are now the lead designers of the brands we’re working with. That connectivity and interaction is important. Look at the collaboration between Le Corbusier, Mies van der Rohe and Oscar Niemeyer, who were the most famous architects of their time, but decided to open an agency together. Their proverb was, “We can do together things we can not achieve alone.” Providing this creative outlet for perfumers and helping them to look at other creative fields is a fundamental part of nurturing the source of inspiration.
It’s defining return on investment in a different way.
You have to be very open. Some might be very short- term, some might be very long-term. Some of the work we did for Visionnaire ended up finding outlets, because some of the designers were the designers for leading fashion brands and we were able to continue our collaboration. The work we did with Hedi Slimane, for example, became Dior Homme.
Does the industry have a misplaced fixation on classics? Is the idea outmoded?
No, it’s very relevant. If you look at what remains from major cultures around the world, it is really their art. If they [became] classic, they were able to transcend some relevance above their immediate creative process.
What other issues are you focused on?
We’re looking at some of these emerging markets and a challenge to the potential growth is distribution— how to reach new consumers, especially in places like India, where there is a culture of fragrances. Another challenge is how to make innovation relevant and affordable for the emerging markets, where consumers have less discretionary income to make purchases based on the emotional [appeal] alone. How do you bring innovation and regional relevance at an entry price point? How do you make it affordable but still keep the key components of the industry? New product forms will be coming out of this.
Are you seeing that already?
Yes. One of the first trends that took place was sachets. People were buying individual doses, which is an interesting way to engage with consumers and respect their challenges in terms of disposable income. What Sephora has done with roll-on fragrance is very interesting.
Historically, China hasn’t been a big fragrance market. How do you see it evolving?
The sensorial element of fragrance exposure in the Chinese consumer has increased 20-fold in the past 10 to 15 years. One very interesting observation when we do research in China is that the spectrum of olfactive notes that Chinese consumers are accepting is actually very, very wide. In the industry, we’re talking a lot about reverse innovation, and some of our most innovative notes in the beauty-care category were launched in China or Asia, where we’ve been pushing the envelope the most. The fragrances we’ve created for China are groundbreaking in terms of olfactive notes and will impact the U.S. and Europe.
One fact which is important is per-capita spending on beauty care and home care is eight-times higher in the developed market than in the emerging markets. That highlights the gigantic opportunity. The world’s population is seven billion today, and will be nine billion by 2050. More than 90 percent of the growth will come from emerging markets. The majority of the world’s biggest cities will be in Asia or emerging markets. Not only will it be a population expansion, but also an urban environment promoting the use and need and exposure to our products. That will create significant demand.
What drives you?
Passion for the product, for the people, for the brands, for the market. What is so stimulating is that we have endless opportunity. We’re in an industry where consumers are engaging with our products 24 hours a day. When I look at all the different trends and the innovation that is taking place, what we are pushing for is creating a brand-new dynamic. The challenge is, are we aware of everything that’s happening and how to identify the key drivers of motivation.
How do you keep your finger on the pulse of what’s happening?
By spending a lot of time with the team, the brands, our customers and consumers. I travel a lot and go on home visits in Brazil, China, India and also North America and Europe. It’s fascinating to listen to consumers talk about products, see how they react to a brand, the way they use a product. When you’re creating for one of these big markets, your teams in New York or Paris have to go there. Most of the “wow” moments took place when they were in a house, and they understood that it wasn’t just about the fragrance, but the fact that a consumer in India will probably be cooking and bathing in the same room as using the product.
I also try to meet people from different industries, understand their challenges, what is driving innovation and which companies they find most innovative. Advertising is very close to what we do, in the way they partner with brands at the strategic level in exactly the way we do in terms of managing equity.
I strongly believe a major influence for us will be coming from the flavor industry. When I look at the level of innovation, the speed to market, packaging trends, trends in health and wellness, boosters—there are so many things happening that will impact us.
How important is local relevance for global brands?
It’s fundamental. One of our biggest challenges relates to people, because very often, in most of the places where growth is going to be the most significant, you don’t have technical expertise that is relevant for business. So you might have great plans and growth aspiration, but where are you going to find the talent? There are very limited numbers of perfumers in China and India and Brazil, so it is a long-term planning exercise. When you look at some of the critical expertise that is required to run our business, in terms of perfumers and evaluators, it takes five to 10 years to train them to perform at the level of expectations that the brands require and to win the brief and win in the marketplace.
How do you define innovation?
The way we look at the future and want to create combines the fusion of three fundamental benefits— functional, emotional and performance-related. There is this constant desire for sensorial experience and novelty from the consumer across categories. We saw it when we introduced microencapsulation to deliver fragrance on demand in the fabric-care category, which, by the way, is a perfume in many instances for consumers in emerging markets.
In fine fragrance, what will be the next frontier?
Very often the innovation comes from packaging and new ingredients, but what new technologies will be driving it? And what additional benefits? How do you create these additional benefits? How do you engineer love? How do you create the love which will drive repeat purchases, which in the end will be the key differentiator and key driver for the classics?
Nicolas Mirzayantz holds a Master of Economics from the University of Paris II ASSAS and also completed the International Executive Program at INSEAD in Fontainebleau in 1998. After serving as deputy trade commissioner at the French Embassy in Nicaragua for two years, Mirzayantz joined IFF’s creative center in Paris in 1988. Since then, he’s held increasingly senior positions in the company, rising to group president, fragrances, in 2006. He also serves as president of IFF’s natural products division, Laboratoire Monique Rémy, in Grasse, France.