Will roses get harvested in Bulgaria this summer? What about mint, lavender, vetiver and orange flower growing in other parts of the world?
But the overriding question is when demand for prestige perfume, highly dependent on travel retail, might rebound.
“The big impact for us, and no doubt for the whole industry, is really on the slowdown of fine fragrance,” said Jonathan Warr, senior vice president of research and development, regulatory affairs and quality control at Takasago International.
Willem Mutsaerts, chief procurement and sustainability officer at Givaudan, said the weaker demand means there is “less pressure on the raw materials” in the short term.
Concurrently, the home and personal-care aspects of fragrance suppliers’ businesses picked up with increased consumer demand for such products often using natural ingredients like citrus, mint, patchouli and lavandin for scents, while the sales of flavors ingredients stayed strong.
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Most suppliers’ factories have remained operational around the globe, since they were deemed essential by governments.
“As an industry, we are extraordinarily lucky…because at least a great share of our business is up and running and doing well,” said Dominique Roques, vice president, naturals partnerships and communication, at Firmenich, adding the only exception “concerns India, where factories can still be running, but logistics, in terms of export and transportation, are beginning to be very complicated.”
That could impact an ingredient like mint, for instance, which is grown by at least one million farmers, then processed in thousands of small distilleries around the country before being sent abroad. The supply of Iso E Super from India, for one, has dried up, some say.
Prior to India’s abrupt shutdown, China was the first country to be hit by the pandemic, causing its supply chain to slow, which for a time impacted deliveries of cedarwood derivatives, for example.
Of ingredients overall, Roques said: “Up to now, it’s pretty much business as usual in terms of volumes and demand. We’re just executing the contracts that have been put in place one year ago.”
Cardamom continues being distilled in and delivered from Guatemala as always, for instance.
However, with uncertainties about how and when confinements will be rolled back in countries around the world, and whether a new wave of COVID-19 will soon spring up, it’s unclear what summer might bring. Will operations be allowed to move forward concerning harvests?
“There have been some discussions going on in the industry — more on the IFRA [or International Fragrance Association] level — that we should be concerned about the sourcing of raw materials, because there are much fewer people in the fields. People have less freedom to operate, so it makes everything more difficult,” said Mutsaerts.
It’s impossible to forecast how — if at all — the health crisis will impact consumer consumption. Might the fear factor affect the green movement, which had been afoot for awhile in fine fragrance and more recently, over the past 18 months, had begun taking off in the home and personal-care space?
“That is the kind of sustainability question which is out there — will consumer habits continue on a path of more caring, in the wider possible sense, or will people track back to performance [being] what really matters and everything else is secondary,” said Warr.
He added conversely, with pollution’s decline during the lockdowns due to COVID-19, people might appreciate nature more.
“There are different theories at the moment. Some people say human beings will forget what happened three months from now,” said Mutsaerts. “Another theory is that this is a message from the world — from nature — telling us that we are going in the wrong direction and have to adjust.”
Suppliers’ uncertainty swirls about the upcoming demand for fine fragrances.
“We have a very immediate short-term view and a very poor long-term view on almost everything,” said Warr, echoing the sentiment of others. “It’s very hard to know how things will shake out.”
One silver lining, executives believe, is that the sustainable practices they’ve established over the past decade with partners, such as farmers, to source natural ingredients bolsters the solidity of the overall supply chain during the pandemic — and beyond.
“We are really being very close to our suppliers, asking them how we can help them, whether they foresee any problems, and how we can work better together,” said Mutsaerts.
“It’s going to be a general responsibility for the industry to demonstrate that in difficult times, these suppliers will be treated as partners and that we will not let them down,” said Roques.
“There are many ways of doing that. You can buy crops in advance. You can accept carrying more inventories than you would normally do. If you’re not able to buy the same amount of a product as in previous years you can, from the same supplier, buy different products that you were not buying before,“ he explained. “There are solutions out there.”
“The whole industry has to be sensitive about how we manage resources,” said Mutsaerts. “We also have to stick together to get through this crisis. As an industry we have to stay strong and help each other.”