NEW YORK — A decade ago, Geoffrey Webster recalls, fragrance manufacturers routinely invited five or six suppliers to compete on a new project brief. Now it’s down to two or three.
Another way the business has gotten tougher is a shrunken client list: consolidation of ownership has taken care of some vendors, while bankruptcy has zapped others, like H. Alpert & Co. and Houbigant. There is no longer much room for error.
The intensification of bottom-line pressures and competitive infighting in a mature fragrance market is perhaps felt the most sharply at the supplier level, with its hard-charging battles for every piece of the pie and white-knuckled grip on survival.
“In our business, winning briefs isn’t the only thing, it’s everything,” said Webster, the president and chief executive officer of the North American fragrance division of Givaudan Roure Corp., based in Teaneck, N.J.
“No winning briefs, no business,” he concluded, adding that “you could bluff your way through a brief 15 years ago. No longer.”
But more challenges are involved in doing business in the hardscrabble Nineties than one-upmanship. “The issue with our industry is that it is an irrational business that has to be run rationally,” Webster said.
As with other companies, Givaudan has found new disciplines to generate profits — instituting such measures as global ingredient purchasing, greater use of robots and a reliance on computer-aided fragrance design. Webster said perfumers can use computers now to run a cost modification of a formula in 10 minutes. “It would have taken two days five years ago,” he said.
But the Nineties also have demanded greater focus. There is no time or energy to pursue marginal opportunities. Since the merger of Givaudan and Roure formed a fragrance business that generates $120 million in North American sales — $55 million of it in fine fragrances — the company has slashed its client list accounts to put more emphasis on its solid performers, according to Thomas A. Malone, senior vice president of fine fragrances.
Webster noted that he now follows two lines of attack — concentrating on his list of 25 key accounts and pursuing new, fledgling businesses that are rich in potential. One example of the latter is Givaudan’s development of Adrienne Vittadini’s new women’s fragrance AV for Khepra Beauty Group LP.
Webster said Givaudan also has been working on a project with Robert Isabel, an example of seeking out “people who have good ideas.”
Like its competitors, Givaudan has sought new approaches to the business — both from the scientific and the marketing angles. In a takeoff on the head space technology used by many firms, Givaudan has been utilizing a process, called En Fleurage 2000, in which super-cold liquid carbon dioxide is used to flush out elements of flowers that usually go undetected. The typical head space technique only captures the volatile elements of the subject, the company said.
Marketing creativity also is being viewed from new lifestyle-driven perspectives. Susan R. Virtue, vice president and creative fragrance director, and Lori Rienzi Smith, marketing manager of fine fragrance, see patterns emerging not only in terms of how fragrances on the market are grouped, but in consumer tastes and dynamics shaped by demographic shifts.
There are the usual edible notes like Thierry Mugler’s chocolate-tipped top note in Angel, but also fragrances themed on the color blue — Wings for Men and Brute Actif; elements of nature, like Boss Elements; falling in love — Coty’s Longing and Elizabeth Arden’s True Love — and boy toys like DK Men and Legendary Harley-Davidson.
A hip group of fragrances classified as young couture includes Miss Arpel, Laura by Laura Biagiotti, Flore by Carolina Herrera, G Gigli by Romeo Gigli and Trocade from Rochas, which is now a strong hit in France.
A new school of thought when it comes to men’s fragrances involves notes designed to put a fragrance into a man’s psychological comfort zone. Scents like leather and cognac are used to put the wearer at ease.
A lot of the marketing work, which includes focus groups with young opinion makers and visual approaches, focuses on Generation X as one of the newest group of consumers. The phenomenal success of Calvin Klein’s CK One has intensified interest in this group.
The attention is justified, judging from consumer research done by Givaudan. The good news for suppliers is that people are experimenting with fragrances at a much younger age.
The results from the men’s portion of the survey is startling. Of those questioned, 55 percent of young males said they had tried fragrance by the age of 12, while only 25 percent of mature men, aged 55 to 64, said they had experimented that young.