Byline: Jennifer Weil

PARIS — There were many topics covered at the World Perfumery Congress in Cannes, but perfume was far from first.
Of course there were discussions about green and oriental notes at the conference, but the buzzwords were consolidation, changing consumers and new delivery systems for fragrance.
The conference took place May 27-30, and more than 1,000 executives from 28 countries attended.
Patrick Choel, who heads the beauty division at LVMH Moet Hennessy Louis Vuitton, set the tone when he opened the conference by saying: “With the dawning of the year 2000 the whole [fragrance] industry will have to rise to its challenges.”
He and other speakers agreed that the hurdles are numerous but not impassable. They include changing distribution routes, delivery systems and consumers, and increasing globalization.
Mary Manning, senior vice president of market development in the U.S. for Coty, explained that one of the biggest challenges for the industry is fragrance’s new paradigm.
She said that the business has “probably changed irrevocably” toward specialty fragrances, especially aromatherapy.
Manning added that while eau de toilettes served companies well through the mid-1990s, from 1995 to 1997 U.S. mass market fragrance sales were down between 5 and 8 percent.
“Many companies were blindsided. The paradigm was shifting: Women were being enticed toward specialty retailers — aromatherapy, bed and bath products and candles,” she said.
Yet with the onslaught of lifestyle products came technical constraints. For example, adding fragrance to skin care can be tricky.
Avon has been experimenting with delivery systems for fragrance. For instance, it has explored the idea of lipstick with an addictive taste, said Lynn Emmolo, group vice president of global products and marketing at Avon Products.
The firm is focusing on its personal care category. Emmolo claims that many customers use roll-on deodorants as fragrances and that what sells in most of the lifestyle products is the juice.
Aromatherapy is a major trend, most agreed — even in Europe. “I’ve never seen a development as important as aromatherapy,” said Ange Zola, director of essential oil and raw material supplier Adrian, based in Marseille.
There’s also a boom in specialty stores. Bath & Bodyworks, for instance, had sales in 1997 of about $1 billion, Manning said.
But many manufacturers were late to see the shift from department stores. “For too long the industry thought it could shape consumers. U.S. department stores thought that they were the only game in town,” said Michel Mane, president of Mane USA. He pointed to LVMH’s Sephora as a leading example of the new specialty store. There has also been a change in the process of creating fragrance, speakers said.
“Before, the luxury perfume market was an autocracy. Today, it’s more of a democratic regime,” said Jean Amic, president of Givaudan Roure Fragrance. “The fashion is imposed. We have to understand the expectations of a larger number of consumers and integrate these expectations.”
Decades ago only the well-heeled purchased scent. Now, it’s the 2.3-billion-strong “global teenager” who’s involved in the music culture that helps drive the industry, said Pamela Baxter, who was named senior vice president, general manager of Aramis Inc. on Thursday.
Her appointment will be effective July 1.
Baxter said that in the U.S., 12- to 25-year-olds spend more than 40 percent of their pocket money on clothing and personal care — or more than $150 billion. She added that they spend more than 30 percent of their time listening to music either on the radio or on TV.
Tommy Hilfiger, who has long linked his fragrance to his street culture and fashion, has the number-one-selling men’s prestige fragrance in the U.S. with its Tommy. In England, Tommy was in the top 10 after a few months on the market — even without gift-with-purchase.
And new markets are emerging quickly. “Fragrance is the largest category in beauty, with 31 percent of sales. Forty-one percent of those take place in Latin America, and 12 percent in the Asia-Pacific region,” Emmolo said.
But people at the congress were also concerned with building their business in other ways, one of which is to pool resources, such as marketing, purchasing, research and development, speakers said.
Mane said suppliers should even think of outsourcing their research and development departments with noncompeting suppliers.
Avon, for instance, realized that it had to change to keep up with the market, so the company recently created a Global Development Center.
These consolidations could help perfumers keep up with market demands, by developing new aromachemicals, for instance.
But as consolidations pick up speed, speakers pondered whether there’s a “critical size” for survival.
“It does exist — it is that which makes it possible to meet expectations of clients on five continents,” said Philippe Maubert, president and general manager of Robertet & Cie of Grasse, France.
Consolidations can have other positive outcomes, too. “While the raw material companies are being consolidated, they’re becoming more specialized,” said Michel Demarest, corporate vice president of the raw material division at Charabot, of Grasse.
Regulatory issues pose another constraint for perfumers. “Legislation is increasingly becoming the focus of international companies as borders come down in world trade,” said Maurice Wagner, executive director of the European Flavor and Fragrance Association. He said the goal is single-market legislation.
India was a big topic of discussion at the conference, and there were 110 people — or 8.7 percent of all attendees — from that country.
Once known primarily for its sandalwood, India is now making inroads in essential oils. “India has become and will in the future be a very important place for essential oils,” said Jean-Pierre Subrenat, co-chairman of the congress.
India’s export of essential oils is valued at about $170 million.
Overwhelmingly, perfumers agreed that innovation is the key to success — especially in mature or stagnant markets.
“Our industry lacks the entrepreneurs that had the sixth sense that enables them to create fragrance trends,” said Richard Loniewski, president of Richard Loniewski Associates. “Today, fragrances follow rather than lead.”
“Fortune opens itself to those who dare,” said Raymond Chaillon, co-chairman of the conference. “Elements of risk should be accepted [in the industry].”

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