21 June 19 – By Cosmeticsbusiness.com
Cultural shifts and environmental concerns are taking the world of perfumery into new directions. This report reveals how fragrance brands can stay relevant.
Market overview: At a glance
What’s in this report?
Top 5 trends:
Global value & growth 2018
Total fragrances market. Source: Euromonitor International
Key market challenges addressed
It could be said that the growth of luxury artisanal fragrances, which have responded to the rising demand for individuality, quality and exclusivity in perfume, has rescued a fragrance market that in other areas is flat or declining.
Yet Clotilde Drapé, Research Analyst at Euromonitor International, says that in the future, the upper prestige fragrance segment will have to find ways to remain relevant, and more importantly competitive. “It will have to keep justifying its high prices to consumers as new players are emerging on the market offering premium alternatives at lower price points and with as much exclusivity,” she explains.
Floral Street, which recently won Retailer of the Year at the 2019 Fragrance Foundation UK Awards, is an example of a brand providing a new type of competition.
Fragrance: Top 5 countries by size, 2018
Source: Euromonitor International
Founder Michelle Feeney says: “We wanted to create a new luxury – to do our part to show that luxury doesn’t need to cost the earth,” she says, referring to both the price of the perfumes (£58 each) as well as the brand’s planet-friendly approach to packaging.
All brands in the fragrance market also need to be continually aware of the shifts in how consumers are purchasing products. Drapé says brands must “capture the consumers’ noses and eyes through creative digital strategies as consumers are starting to get ready to buy their fragrances online more and more.”
Yet brands can also win consumers back to discovering perfume in person, with immersive retail experiences that may even be a blend of digital and physical.
Another key challenge for the fragrance industry – as it is throughout the wider beauty industry – is the sourcing and sustainability of fragrance materials. Angela Stavrevska, UK Creative Director and Perfume at CPL Aromas says: “The key thing though is that, even when faced with a shortage of a particular material or materials, perfumers are highly creative and innovative: we usually find a solution to these challenges.”
As the global fragrance market breaks the $50bn barrier, it is also breaking new ground that will position perfumery for a successful future. The evolution of niche brands into the mainstream has created a dynamic upper prestige segment that is powering market growth.
But beyond this, it is also bringing a new, creative and experiential element into retail at what is a challenging time for physical stores, while also educating consumers about fragrance development.
“Customers are always interested in learning about something new and it takes an element of retail-theatre to get their attention,” says Jo Osborne, Director of Beauty and Concessions at Harvey Nichols.
“We launched Hermetica, an alcohol-free molecular fragrance brand, last year with a great response from customers as it was something different to what we currently offer. Not only is their space in-store eye-catching and unique, their sales team are extremely knowledgeable and are in tune with our customer.”
And while immersive experiences in fragrance retail used to be notable exceptions, today they are becoming more numerous and effective in driving consumers into stores.
Clotilde Drapé, Research Analyst at Euromonitor International, says: “Diptyque is very good at this, launching pop-ups not just focusing on the products themselves but on the whole brand experience. Aesthetics are key and so is brand identity.”
With consumers seeking uniqueness in fragrances, brands focusing on personalisation are proving attractive. One example, notes Drapé is the collaboration between Sillages Paris and French department store Le Bon Marché which used AI to tailor fragrances to consumers’ needs. “The collaboration was a huge success thanks to the premium clientele of the department store and communication from the brand itself,” says Drapé.
The popularity of luxury artisanal brands such as Tom Ford, Jo Malone, Le Labo, Frédéric Malle, Byredo, Serge Lutens, L’Artisan Parfumeur, Penhaligon’s and Miller Harris has also instigated a ripple effect further down the market.
Drapé explains: “Over the past couple of years, the prestige market has picked up the pace, trying to revamp its dusty image, especially with luxury designer fragrances. As consumers grew tired of all smelling the same and not being able to identify to the products and their advertising strategies, traditional fashion luxury players have had to adapt to counter the growing popularity of premium unisex fragrances and ‘niche’ players.”
She notes that all major fashion houses have now created an additional ‘exclusive’ range of scents in order to get back to the rising demand for individuality, and bring their consumer base closer to their brand through ‘affordable’ luxury.
Global premium vs mass fragrance sales, 2018, by Segment
Source: Euromonitor International
The push in unisex fragrances has played a large role in this, with Chanel through to Britney Spears launching gender-neutral scents over the past year. IFF perfumer Céline Barel says: “While fragrances classified as ‘for men’ and ‘for women’ still dominate the market, these notions are being challenged with new global launches becoming positioned as accessible for all.”
Mona Maine de Biran, co-founder and President of unisex artisanal line Kierin NYC, adds: “The current gender-neutral trend in fragrance is just the beginning and its evolution is inevitable. I dream of a day when there will be no ‘for women’ or ‘for men’ fragrance aisle in-store or online.”
The industry is also spotting new opportunities to take the redevelopment of the fragrance category even further.
One is to start the conversation about fragrance ingredient safety directly with consumers, to communicate not only the value of natural materials, but the value of synthetics, and to make the point that ‘chemicals’ can be harmless.
Kickstarting this conversation is the emergence of some clean fragrance brands, like New York- based Ellis Brooklyn, which states on its website that while it prefers to use naturals for their complexity and beauty, it “will use synthetics when they are the safer or more sustainable option.”
Founder Bee Shapiro tells Cosmetics Business: “At Ellis Brooklyn, we love our naturals and we use a very high percentage of naturals. But there also needs to be a balanced viewpoint on how using naturals can affect sustainability. There are some molecules today that can be created by green chemistry, meaning they net out as having zero impact on the environment, and for us that’s a beautiful, exciting thing.”
The fragrance industry is also seeing more brands move towards the use of sustainable packaging. Ellis Brooklyn’s new fragrance West, for example, comes in an environmentally-friendly glass bottle from an Ecocert supplier, and its Bakelite caps are made without the use of petroleum.
Meanwhile, the packaging for Clean Reserve’s range of fragrances is 100% recyclable, with caps made from certified wood from sustainably managed forests. The brand also uses compostable corn-derived cellophane.
UK-based Floral Street’s founder Michelle Feeney says that the fragrance industry, like the wider beauty industry, now needs to ramp up efforts to move away from excessive packaging: “Although we are starting to see movement in health and beauty brands adopting eco-friendly packaging there is still some way to go.”
SPOTLIGHT TREND: FUNCTIONAL FRAGRANCE
In the future, fragrance will be used to help us perform better. This was the message in the 2019 Global Wellness Trends Report from the Global Wellness Summit, which highlighted ‘functional fragrance’ as a key trend. Cosmetics Business speaks to Jules Miller, founder and CEO of The Nue Co, about its recent launch – an anti-stress supplement in the form of a unisex fragrance
Why is fragrance being increasingly linked with health and wellbeing benefits?
There’s a powerful connection between cognitive function and the olfactory system. Put simply, certain scents can elicit certain reactions with the body, both physically and psychologically. The impact of scent on emotional state has been recorded anecdotally across cultures around the world. With Functional Fragrance, we have taken that concept, but applied a scientific lens. We worked with data from the University of Geneva’s Brain & Behaviour Laboratory to definitively prove that fragrance can also have a function.
How could this change the role of fragrance and perfumery for the consumer?
Across the board, consumers are expecting more from the products they buy and the brands they buy them from. With regard to fragrance, I think it’s likely we’ll start to see functional benefits being a mainstream addition in the near future.
The fragrance industry can do more to promote the benefits of synthetic ingredients, both in terms of safety and potential environmental benefits.
The entire industry has undergone a shift – there’s more awareness about ingredients and also more beauty knowledge in general that is being shared across social channels. Brands that are savvy in communicating what their brands stand for will win out in the end.Bee Shapiro, founder, Ellis Brooklyn
Trend #1: The race for prestige
Return to the fragrance market around five years ago, and the scent of acquisition hung firmly in the air as the global leaders raced to acquire high end perfume brands.
Estée Lauder snapped up Le Labo and Frédéric Malle in 2014, and Puig acquired Penhaligon’s and L’Artisan Parfumeur in 2015. In 2016, Estée Lauder was back with the further acquisition of By Kilian, then L’Oréal stepped in with the purchase of Atelier Cologne. The following year LVMH took the plunge, with the acquisition of Maison Francis Kurkdjian.
They were wise strategic moves. The latest 2019 financial results from these companies reveal that not only are luxury artisanal brands experiencing some of the strongest growth in their portfolios, they are, in some cases, offsetting weaker performances in designer fragrances.
Estée Lauder’s “outstanding” fiscal 2019 third quarter growth, for example, was within its fragrance portfolio boosted by “expanded targeted reach and new product launches” for Le Labo and By Kilian, as well as growth in fragrances at Jo Malone London and expanded targeted consumer reach.
Meanwhile, Tom Ford Beauty experienced increased sales too which reflected “strong growth from Private Blend fragrances Oud Wood and Soleil Blanc”, according to the company release.
L’Oréal’s first quarter 2019 results picked out notable growth from Atelier Cologne, which it says “continues to attract new consumers”, and Puig’s 2018 results reported that L’Artisan Parfumeur has “shown through its excellent performance in its owned stores and in large department stores that it is ready to be scaled up to the international market”. Meanwhile, Penhaligon’s enjoyed double digit growth above the market rate.
“Today, the fragrance market is about the race for prestige. The groups who have understood that are the ones gaining market share and revenue,” says Olivier Aron, founder of fragrance analysis company ROSAE.
“Five years ago, Estée Lauder went full steam ahead on the upper prestige segment, rather than investing in the traditional prestige segment, and during the last quarters have seen tremendous growth, triggered by the great success of their upper prestige brands. The company invested in its management of department store stands, and its big success has been Jo Malone. We knew this was happening when Jo Malone became the number one perfume brand in Harrods – the Jo Malone stand was beautiful and properly managed.
“This know-how is now being applied with great success to Tom Ford perfume and beauty,” he adds.
Boosting the market
Aron notes that the upper prestige segment is now proving highly profitable for department stores and specialist stores, taking a larger chunk of sales every year.
But it is also having a considerable impact on the wider market. “The growing importance of the upper prestige segment has become the key trend in the category. It is bringing an area of strong growth to the market, even though the market as a whole is flat. It is driving the whole market up,” he explains.
@franciskurkdjian via Instagram
Mathilde Lion, Director and Industry Analyst – Beauty Europe at The NPD Group agrees that high end fragrances priced over 150 Euros are continuing to grow into 2019, and Marc Chaya, CEO and co-creator of Maison Francis Kurkdjian, tells Cosmetics Business: “While the general fragrance market is indeed showing moderate growth, as it is now a fully mature market, we are seeing sustained strong customer demand for a more exclusive, more creative and more upscale offering in fragrances, which we are providing alongside other players.” Chaya explains that the French fragrance house has been doubling its size every two years since it launched in 2009.
He adds: “I see this trend accelerating in the years to come as more customers in mature markets such as Europe and the US are converting to upper-prestige fragrances, while in key emerging markets such as China, which carry tremendous growth ahead, category newcomers are entering directly through the high end segment.”
BRAND SPOTLIGHT: ORMONDE JAYNE
Luxury niche brand Ormonde Jayne is building on its success by expanding into new territories including China, the Middle East and Australia, with new launches planned in Canada and South Africa. Cosmetics Business speaks to founder Linda Pilkington about the growing market for upper-prestige fragrances
Upper-prestige fragrances are bringing strong growth globally to an otherwise flat fragrance market. Why do you think this is?
I think clients are becoming more educated and knowledgeable about good craftsmanship. You see this in all areas, for example many people have a favourite coffee shop with speciality coffee beans, and others save up to by a shirt made in Savile Row in Mayfair because they know they will get a very good product that has been made with care, love and passion. The same is true for the perfume industry – with our perfumes, the investment is all in the juice inside the bottle – this is where our biggest investment is and customers know that millions of pounds have not been spent on enormous campaigns in magazines and adverts at every bus stop.
What are consumers looking for from upper-prestige brands?
What I’ve noticed is this: we were told to adjust our prices by department store buyers because they said that consumers don’t want to invest in speciality raw ingredients and exotic absolutes. We were considering making a variable only to find that when we launched Elixir at a higher price point, it sold out immediately. Buyers and analysts might forecast different trends, but it’s not necessarily relevant for my brand. Our clients like what I do, they like my ingredients and they are prepared to spend more because they know there is a good reason for any increase.
The success of the best upper-prestige brands can inspire other prestige and upper-prestige brands, through their unprecedented consumer in-store experience.
If you are lucky enough to own your own stores or your own stands it is not enough to sell in a beautiful environment and to restrict, for instance, the personalisation of your fragrances to the colour of the ribbon. Brands can educate and promote the layering of their fragrances.Olivier Aron, founder, ROSAE
Trend #2: Immersive experiences
Store closures have reached a record-high rate, and for the fragrance category this could be seen as particularly grim news. Scent is, after all one of the few products that should be experienced in person prior to purchase.
Yet, conversely, it is precisely for this reason that fragrance could become one of most promising categories for the future of bricks-and- mortar.
“Savvy retailers should take advantage of this fact more now than perhaps ever before, enticing people into the physical store with interesting fragrance offerings and experiential booths,” says Angela Stavrevska, UK Creative Director and Perfumer at CPL Aromas. “They could be a way to keep high street stores alive.”
The spectacle of scent
Jo Osborne, Director of Beauty & Concessions at Harvey Nichols, explains that for fragrance, there are many further benefits to creating immersive experiences. “Immersive experiences bring an element of theatre and magic to a shop floor and, more importantly, make a customer’s journey interesting as they learn something new and feel like they are more involved with the process.
“Navigating through fragrance can be overwhelming at times as there are so many to choose from. However, experiences where customers can have a more ‘hands on’ approach tend to be successful and memorable.”
“Experiences where customers can have a more ‘hands on’ approach tend to be successful and memorable.” – Jo Osborne, Director of Beauty & Concessions, Harvey Nichols
The recently launched immersive pop-up with Experimental Perfume Club at Harvey Nichols’ Knightsbridge flagship to launch the new Layers 02 collection, invited customers to create their own bespoke fragrance by mixing together quantities of the new fragrances for something truly personal.
“Customers are always interested in learning about something new and it takes an element of retail-theatre to get their attention,” says Osborne.
Jo Malone has become known for its large scale immersive experiences in recent years, the latest being a spring-themed exhibition to showcase its limited edition Blossoms collection in London’s Bloomsbury Square. The experience included immersive light and sound installations, four themed scent booths that enabled consumers to experience each scent for themselves and a range of workshops.
“Sensory experiences and consumer engagement have become increasingly important when it comes to selling products,” says Stavrevska. “Consumers increasingly prefer to spend money on experience over products so using experiences to offer a little extra in retail is ideal, and is likely to continue to be important.”
According to Lizzie Ostrom, scent and sensory consultant and producer, the goal is not so much to produce an experience which inspires people to buy a product, but for the product to be the thing they get that reminds them of the experience. “When we did the perfume exhibition at Somerset House in 2017, the perfume sales in the gift shop seriously outstripped all our forecasts, because the moment in which visitors encountered each scent gave them space to get acquainted with them,” explains Ostrom.
“With only ten perfumes to try, each in a very different kind of area, there was a clear pathway through and not too much to overwhelm the consumer.”
This type of environment contrasts sharply with the way fragrances are often sold on the high street. “What this means is, somehow, we need a new politics of retail particularly in department stores and multi-brand environments,” says Ostrom.
“It is so hard when brands are competing for attention and placement is dictated by all sorts of considerations. I know new creative concessions like the Experimental Perfume Club have helped with this.”
A whiff of opportunity
Looking to the future, how might retailers reimagine their environments to offer consumers the ultimate fragrance experience? For some brands, it is worth considering how fragrance could work in other retail sectors.
“Euromonitor International Research Analyst Clotilde Drapé says: “Some companies holding licenses for luxury designer fragrances should collaborate more with fashion retailers in order to introduce more fun and attractive ways to come into the stores to try out the fragrances. This is a way to attract consumers into physical shops without feeling intimidated by entering a high luxury store.”
As online shopping booms, Stavrevska can see retail outlets becoming more like showrooms for fragrance, “where consumers can play and experiment with products,” she says. “This great retail experience should then encourage sales and brand loyalty.”
“Perhaps we can consider thinking of retail locations as more like theatres, which promote seasons and different productions within one space, so that brand placement is temporal rather than spatial,” suggests Ostrom.
RETAIL SPOTLIGHT: THE FRAGRANCE SHOP’S SNIFF BARS
The Fragrance Shop’s standalone perfume bars blend physical and digital retail by enabling the consumer to talk in person to a consultant before submitting orders to arrive directly in their homes. The format is seeing a 30% higher conversion volume compared to in-store. Marketing Director Lisa Windsor explains why the initiative is proving successful
Sniff Bars are attracting 66% more new customers vs The Fragrance Shop’s direct online channel. How is it achieving this?
Customers are responding well to the phygital aspect of the Sniff Bar format and it’s something that’s new and exciting for them to experience. We are offering them an incredibly personal experience by giving them the opportunity to experience a free fragrance consultation, which allows us to develop a more personal and trusting relationship between us and the customer. Our Sniff Bar staff are dedicated to helping customers discover their dream scent, something more inviting than just sitting at home on your computer or walking into a busy store.
Why have you focused on delivering a ‘phygital’ experience?
The retail landscape is changing and customers are increasingly looking for a new, fresh shopping experience that combines physical retail, environment and digital so it’s really important that we respond to their needs. Due to the sensory nature of fragrance purchasing, unless they are already familiar with the scent it can be difficult for consumers to find their ideal fragrance online. With this in mind, developing our phygital offering will allow us to give our customer a seamless shopping experience.
Pop-ups should focus on the whole brand experience rather than just the products themselves. Aesthetics are key and so is brand identity.Clotilde Drapé, Research Analyst, Euromonitor International
Whether it is an immersive experience or the personalisation of a bottle, making the customer feel valued and special always helps to generate excitement as well as encouraging them to spread the word.Jo Osborne, Director of Beauty & Concessions, Harvey Nichols
Trend #3: Communicating the facts
Every now and then a fragrance comes along that disrupts the industry, and the launch of Michelle Pfeiffer’s 100% transparent brand Henry Rose promises to do just that.
The EWG-certified fragrance line is said to eliminate the ‘secrecy’ that surrounds fine fragrance formulation by offering full ingredient listings for each of its five scents. In doing so it has sparked new conversation around consumer mistrust and ingredient transparency in the fragrance industry – and in the process revealed that there is a key opportunity for the fragrance industry to speak to the consumer and communicate the facts about its use of ingredients.
For the fragrance industry, consumer safety is a top priority. All raw materials used in fragrance products are rigorously tested, with the products complying to the relevant legislation that is in place.
“Fragranced goods are among the most regulated goods on the market, says Lisa Hipgrave, Director of IFRA UK. “Furthermore, the fragrance industry adheres to a voluntary initiative of strict Standards on the safety of the materials we use, and encourages relevant consumer information and transparency in the approach taken to risk assessment and management. We are committed to transparency and there is no secrecy about the materials/ingredients that are used in fragrances.”
“The fragrance industry adheres to a voluntary initiative of strict Standards on the safety of the materials we use.” – Lisa Hipgrave, Director of IFRA UK
Indeed, a complete list of the fragrance ingredients used is available on the IFRA website, and for the 26 ingredients that have the potential, in some people, to cause sensitisation, these must also be listed on-pack under labelling laws.
Yet communicating these facts to the consumer – especially in the face of the highly popular trend for ‘clean’ beauty – is no simple task. Angela Stavrevska, UK Creative Director and Perfumer at CPL Aromas, tells Cosmetics Business: “Fragrance houses have little direct access to general consumers to talk about regulatory concerns so, unfortunately, much confusion and false claims have been made over the years which are detrimental to our industry.”
“Much confusion and false claims have been made over the years which are detrimental to our industry.” –
However, Stavrevska believes that Michelle Pfeiffer’s range is in fact helping to address this in a positive way. “Clean has become big in beauty, but no-one really knows what ‘clean’ means. It is often assumed that clean means ‘clean from chemicals’.
Michelle Pfeiffer’s Henry Rose range is clean from allergens and on the brand’s website, which has the ingredients for each fragrance, it includes listings for ‘harmless chemicals’.
So while some brands have confused the issues, Michelle Pfeiffer is being honest and open and talking about chemicals, saying that they are not such a bad thing. The brand is starting the conversation that chemicals can be harmless.”
According to Olivier Aron, founder of ROSAE, “the industry now has an opportunity to explain and educate consumers about the real rules used by the business.” He adds: “We have to tell the consumer how IFRA protects their use of perfume, and how it’s forced the profession to change their formulations over the past 20 years to keep safety a priority. This can bring a positive image to the fragrance industry.”
In addition, Aron says the industry could explain that natural ingredients are not always safe, and that the use of synthetics can be more helpful from an environmental perspective – sandalwood is a prime example.
Changing the synthetics story
“I’m tentatively excited about the move towards transparency,” scent and sensory consultant and producer Lizzie Ostrom, aka Odette Toilette, tells Cosmetics Business. “So many industries – not just beauty – have got their knickers in a twist about discussing naturals and synthetics with the public in a way that’s thoughtful and moderate. This applies also to food, textiles and more.”
She believes that fragrance houses could really take ownership here. “Even though they are B2B they hold so much expertise and can look at ways of extending their communication out. And universities and research organisations have so much to say. They could collaborate with intermediaries to bring their stories to the public accessibly whether that’s through museums, social media or public engagement projects.”
Lizzie Ostrom, scent and sensory consultant and producer, explains how the fragrance industry could raise the profile of synthetic ingredients with consumers
1. Demonstrate links
Do more to educate on what is a synthetic, an isolate and an extracted natural. Demonstrate where many synthetics are also found in nature to reassure, with a link back to the material world which we find palatable. The problem with synthetics is that chemistry is abstract to most people.
2. Talk about allergens
Positively talk about the traceability and purity of aroma chemicals in terms of massively reduced scope for allergens.
3. Find a language
Find a bridging language between trade and consumer communications to articulate what particular ingredients bring to a formulation.
4. Focus on synthetic sustainability
Promote the sustainability story for synthetics as well as naturals. It may be much more interesting to hear about sustainably sourced neroli and local trade partnerships, but we need to know there are limits to natural resources and that one solution to scarcity is chemistry or biotech.
5. Tell stories
Consumers seem to have more appetite for synthetics when it becomes a story about the ingredient interacting with their body. See the success of Iso E Super or Cashmeran as modern love potions. So instead of isolating the material and just discussing that, we need stories about the behaviour of that material. These stories could be psychological or cultural.
Synthetics apart, there are further issues that the industry is expected to address to respond to the demand for increased transparency. “From time to time there is some criticism levelled at the industry that not all formulas for products are disclosed,” says Hipgrave.
Yet this is a difficult issue to overcome as disclosing the complete formula for a specific product could lead to a rise in counterfeiting, with unregulated or lower grade ingredients from less ethical suppliers, she explains. “This actually poses a greater threat to consumers than what might be perceived as a lack of transparency in publishing the formulas. There is no secrecy about the ingredients we use, but the actual formulas are not easily protected by copyright laws.”
There is also the practical issue of listing all ingredients on-pack, as there can be between 30 and 400-plus ingredients, yet Hipgrave says that the industry is actively exploring other ways that this can be achieved.
Meanwhile, the IFRA network is currently designing a new website to allow consumers to find out more about the ingredients the industry uses, which should be available by the end of 2019, and Hipgrave notes that some brands already list the ingredients used on their websites. “I am sure this will continue to be a growing trend in the coming years,” she says.
The industry has an opportunity to educate consumers about how the fragrance business really works – safety standards regarding ingredients, the positive facts about synthetics – and how it protects consumers.
The ‘noses’ should be the ones to communicate the science – after all, they are the only ones that truly understand the chemistry involved. Sam Farmer, Owner, Samuel Farmer & Co
Trend #4: Low-waste luxury
Unnecessary packaging has become a consumer bugbear. And luxury fragrance, notorious for its often excessive packaging with layers of cellophane wrapping, boxes, tissue paper and heavy glass bottles, is under fire.
In the UK, as many as half of consumers think that fragrances have too much unnecessary packaging, according to Mintel, and for brands, there is now an urgent need to move towards a future of low-waste packaging.
Percentage of UK consumers that agree fragrances have too much unnecessary packaging
“It was important a couple of years ago, but nowadays it is critical and necessary to ensure business continuity,” says Luis Miguel Gonzalez, Perfume Business Unit Managing Director at Bulgari. “Ultimately, our clients and the planet demand it, and it is a growing movement across the board, especially with the younger generations.”
“Low-waste packaging was important a couple of years ago, nowadays it is critical and necessary to ensure business continuity.” – Luis Miguel Gonzalez, Perfume Business Unit Managing Director, Bulgari
Bulgari has started implementing an internal product creation process based on eco-design, and has a dedicated team of experts with the sole objective of recommending packaging, raw materials and supply chain interventions to minimise its environmental impact.
A result of this is Bulgari’s fragrance Man Wood Essence, which has been considered a bold move in the industry for its high degree of packaging sustainability. “We were the first selective perfume brand to launch its sellable references in 90% post-consumer recycled glass,” says Gonzalez.
The brand worked with French glass manufacturer Verescence on the flacon and the cardboard boxes carry Forest Stewardship Council (FSC) certification. “It was a challenging process,” admits Gonzalez, “as we needed to guarantee sufficient supply to satisfy the demand, especially as the introduction of Man Wood Essence has been very successful, above our expectations and above our original sales forecast.”
British fragrance brand Floral Street has also achieved stand-out recognition for its 100% compostable carton packaging. “Our totally recyclable and compostable box is a first in the premium fragrance industry,” says Michelle Feeney, founder of Floral Street.
She adds: “Each 50ml fragrance is tucked inside a ground-breaking sustainably sourced pulp carton with an embossed lid, made from recyclable paper packaging and held together with a reusable boldly-coloured band.”
The cardboard and pulp fibres used by the brand come from trees that are fully certified by the World Land Trust and the FSC, the inks used are environmentally sound and tamper sales are use to close the pulp cartons, instead of cello wrap.
Less waste, more luxury
Beside the use of recycled and recyclable materials, brands are also exploring other ways to cut the waste. Mintel says in its Sub-Zero Waste report that creating new ‘end purpose’ packaging concepts will appeal to consumers. Miller Harris’ Forage fragrances, for example, are presented in a recycled plastic tray rather than a traditional box, which can be repurposed for storing jewellery or small items.
And for Christmas 2018, the brand launched a gift-wrapping initiative with 100% silk twill scarves, rather than plastic and paper, to make the packaging a covetable and re-usable item in its own right. It was so well received by customers that the brand has made the initiative permament, offering silk scarf wrapping to all its customers purchasing fragrance.
Return and refill
In January Miller Harris also trialled a ‘Bring it Back’ promotion encouraging customers to return old perfume bottles from any brand and in any size, for recycling, while offering a replacement Miller Harris perfume at a significant discount.
The appeal of refillable perfume systems as a zero-waste solution is also resonating with more brands. Thierry Mugler pioneered refill fountains for Angel more than 20 years ago, but brands including By Kilian and Le Labo offer fragrance refills while Guerlain, Viktor & Rolf and Louis Vuitton all feature perfume fountains at select boutiques.
Olivier Aron, founder of ROSAE, believes that the move away from throwaway packaging presents new opportunities for brands to bring more value to their perfume bottles – and more luxury.
“A clear area for growth is the ‘connected object’,” says Aron. “I can foresee the development of a bottle which is also an electronic device controlled by a smartphone that enables the balance between top, middle and base notes to be changed according to the user’s mood. As a connected object, it allows the consumer to take control, on the spot, and respond to their mood, or the weather for example.
“If a bottle is a connected object it plays a role – it has more value, and the fact that it is not a throwaway item enables brands to use materials that are even more luxurious.”
Already the fragrance market is seeing brands develop creative and groundbreaking developments in low-waste and eco-friendly packaging solutions. But over the coming years, the wider adoption of these necessary changes could even redefine how luxury is expressed in perfumery and in retail.
For now, however, more eco-friendly developments need to be happening in fragrance, and in the wider health and beauty category too, believes Feeney: “More needs to be done to raise awareness of the harm that excessive beauty packaging has on the environment – the legacy it is leaving behind in landfills is far from pretty.”
Brands must be increasingly mindful of the waste that excessive packaging can produce and should focus on the use of recycled materials, ensuring all components are recyclable, or even minimising the overall packaging that is used.Rosalia Di Gesu, Global Beauty & Personal Care Analyst, Mintel
Brands could explore connected technology to develop ground-breaking innovations in refillable bottles, that elevate the luxury experience. They could also explore the possibility of customisation to further enhance consumer participation.
Trend #5: A gender-fluid future
Fragrance has been categorised by gender for decades. But as consumers’ beliefs and attitudes become more fluid, both as a whole and specifically about gender, so the fragrance industry is reflecting this shift in mindset.
“We are seeing products that present a non-binary aesthetic featuring notes that aren’t defined by masculinity or femininity,” says Victoria Buchanan, Strategic Researcher at The Future Laboratory.
“It’s also part of a bigger trend to reflect personality and mood, and subvert the traditional codes of male and female categories. The shift also reflects a swing away from the sexualization of scent in the nineties and noughties, as it becomes more subtle, neutral and empowering for the wearer,” she explains.
“What we see weakening is this idea of thinking in ‘absolutes’, that men or women have to fulfill specific roles or norms,” adds Céline Barel, perfumer at IFF. “Brands are seeing the changes in consumer attitudes with respect to gender. We don’t need to fully blow out that this fragrance is over-the-top masculine or feminine. Brands are reacting by building and crafting products that speak to all.”
Calvin Klein’s CK One paved the way for the creation of unisex fragrance in the 1990s. But Buchanan notes that the marketing behind the recent CK2 fragrance relies on a more heterogeneous approach to make it truly genderless.
And the the past year has seen brands from all corners of the fragrance market move into this space: Chanel with Les Eaux des Chanel, and LVMH with its Sun Song, Cactus Garden and Afternoon Swim scents, as well as non-gender specific range debuts from the likes of Britney Spears and Ariana Grande.
Fashion retailers Zara and All Saints have also joined the fray, while Banana Republic launched its Icon Fragrance Collection in the UK with eight unisex fragrances inspired by travel and adventure.
BRAND SPOTLIGHT: MAISON FRANCIS KURKDJIAN
In February Maison Francis Kurkdjian launched Gentle Fluidity, two edps that are said to go beyond the concept of perfumery for women, men or mixed. Cosmetics Business speaks to Marc Chaya, CEO and co-creator of Maison Francis Kurkdjian, about the the future of gender in perfumery
We are seeing the rise of gender-neutral fragrances. How do you think this is likely to evolve next?
I think we are going beyond gender-neutral fragrances and gradually embracing a form of freedom in the way we view perfume. The current gender criteria in perfumery are rather modern era conventions, categorising floral scents as mainly feminine and woody-leathery-aromatic scents as mainly masculine, while fresh-citrusy perfumes are generally perceived as gender-neutral or unisex. But with perfume, as a man, I can wear a floral scent without questioning my masculinity – actually this is currently very true in the Middle East – and every women can feel feminine wearing a perfume traditionally categorised as masculine. It’s the perception that is changing as the gender clusters are being blurred by a more fluid approach to wearing perfume.
How is this changing perception expressed through Gentle Fluidity?
The Gentle Fluidity duo, which breaks down the gender barrier by offering two distinctive fragrances created from the same ingredients list, offers the wearer total freedom to choose the one that suits their gender identity most.
The unisex boom
There has also been a sharp rise in the number of fragrances launched as gender-neutral. “In 2010, of all fragrances launched in that year, 17% were deemed as unisex. In 2018, approximately 51% of global launches were unisex or gender-neutral,” says Barel (source: Fragrances of the World by Michael Edwards).
“By surpassing 50%, it is clear that this phenomenon has made an incredible leap, influencing consumers’ perception on fragrance. They want versatility as well as diversity in choice.”
Growth of unisex fragrance launches
According to Euromonitor International, premium unisex fragrance was the strongest fragrance category in 2018, with global sales up 7.5% to $2.4bn. Some individual retailers have felt a much stronger uptick: Liberty London, for example has reported a 40% rise in sales of unisex scents.
“There is an unprecedented fluidity that has loosened up consumers’ approach to product or brand purchasing,” says Barel. “I safely assume that the rise of the gender-neutral fragrance isn’t just an ephemeral trend. Rather, it is a societal phenomenon.”
This is not to say that gender no longer plays a role at all in fragrance, and Barel believes that for some types of consumer it still does, but segregating fragrance by gender is likely to become increasingly irrelevant among younger generations, where boundaries between males and females are being increasingly blurred.
50% of American millennials do not believe that gender exists
Source: Ipsos Connect 2016, Intelligence Group, YouGov, WGSN 2017
Barel refers to research that states that 50% of American millennials do not believe that gender exists, and of those surveyed, approximately 70% do not believe that gender can define an individual.
“I believe that the shift to gender-neutral fragrance will continue to evolve as our consumers don’t believe they need a gender to identify themselves,” says Barel. “With millennials and Gen Z there is a higher likelihood of rejection of gender-conforming identities. Facebook now offers more than 70 identity options. As a result, these consumers are embracing a stronger sense of self and gender is becoming less and less prescribed.”
So what will this mean for the future of the fragrance industry? Mona Maine de Biran, co-founder and President of gender-inclusive fragrance brand Kierin NYC tells Cosmetics Business: “Segregating scent by gender is just as irrational as serving men and women different menus in restaurants. Societies that hold equality and respect for the individual as a value will see more fragrances labeled unisex in the future.”
These changes will also increasingly be reflected within retail environments. Barel notes that global retailers are already becoming purveyors of this movement by launching ‘gender fluid’ collections and creating gender-neutral retail corners.
“I think we are going beyond gender-neutral fragrances and gradually embracing a form of freedom in the way we view perfume” – Marc Chaya, CEO and co-creator, Maison Francis Kurkdjian
The rise of gender-neutral fragrances is also likely to result in a change of language and use of ingredients, believes Barel. “We can’t just prescribe this idea that a rose is purely a feminine note. With this social change, we can be versatile and use different facets of ingredients and not worry that they have to be assigned to a specific gender. There is a beautiful emergence of openness and acceptance that sparks our creativity when constructing fragrance.”
Kierin NYC has taken this creativity through to its bold, colourful packaging, which de Biran describes as being a celebratory step on from the neutral and minimalistic appearance of most unisex brands.
She believes this ‘Unisex 2.0 approach’ will be picked up by more brands in the future. Going forward, de Biran expects that impact of the gender-netural trend will shape all aspects of the fragrance business. “We can anticipate more olfactory innovation, scents which flow more freely between the traditional gender boundaries. And we can expect to see more values in concepts and product definitions, possibly even new formats.”
Furthermore, she believes that for the industry to remain relevant, it will need to reimagine the way fragrance is marketed. “I hope the fragrance industry will define fragrance in a way that inspires consumers to feel empowered and good about themselves as opposed to marketing fragrance as a means to acquire attributes of someone else.”
Gender still plays a role for some consumers, but younger millennials and Gen Z are more likely to reject gender-conforming identities.
I believe that a day will soon come when it will be commonplace to see retailers categorising fragrances by their qualities, such as ‘clean’, or by olfactory family rather than by brand or gender.Mona Maine de Biran, co-founder and president, Kierin NYC
Prestige fragrances continue to flourish in the US, fuelling growth in a market that is otherwise slowing down. According to Euromonitor International, overall sales rose by 2.8% to reach $8.4bn in 2018, with prestige scents outperforming the market with an increase of 4% and taking just over half the total value at $4.3bn.
According to Clothilde Drapé, Research Analyst at Euromonitor, this was specifically due to the growing popularity of premium unisex fragrances. “Premium unisex fragrances continue to perform well thanks to the number of brands entering the market, not only in the premium luxury segment such as D.S. & Durga but also in the natural segment with the emergence of fragrances with ingredients such as CBD, integrated by brands such as Malin + Goetz or Fresh.”
The CBD fragrance trend has developed further in 2019, with one stand-out launch being Dirty Grass from natural brand Heretic. The eau de parfum, which contains hemp-derived cannabidiol for its calming properties, is designed to be a functional fragrance that helps the wearer relax. It is also formulated with lavender and vetiver.
Another growth area is direct to consumer companies such as Sniph or Scentbird. “These are growing thanks to their ease of use and allowing consumers to try out different scents without committing,” says Drapé.
Against a dismal backdrop of mounting retail closures, Brexit uncertainty and low consumer confidence, it is no surprise that the UK fragrance market registered a flat performance overall last year.
But there was some good news. According to Kantar, men’s fine fragrance fared particularly well. “Male fragrances enjoyed the strongest growth, mainly through a valorisation as shoppers spend more per pack,” says Kantar.
UK: Male fragrance sales, 2018-2019
UK: Female fragrance sales, 2018-2019
Figures from The NPD Group concur. Men’s prestige fragrances were up 4% for the year ending March 2019, and Mathilde Lion, Director and Industry Analyst – Beauty Europe at The NPD Group, explains that this was specifically due to the boost in sales of edp juices.
“It was the launch of fragrances in higher concentrations that drove the growth in men’s fragrances. For example, Dior Sauvage and Bleu de Chanel launched in edp versions in 2018 and this had an impact on the trend,” says Lion.
“For brands, offering fragrances in a different concentration is a way of animating their pillar lines, and in men’s fragrance we are seeing this strategy more and more with edp.”
Women’s prestige fragrances, on the other hand, remained flat, which was in part due to fewer important launches than the previous year. “New launches declined by 14% in terms of sales,” explains Lion, “but the best launches were Joy by Dior, L’Interdit by Givenchy and Daisy Love from Marc Jacobs.” The slowdown was also linked to a weaker Valentine’s Day period; however, gift sets have remained strong with growth of 5%.
“Overall, the results are not so bad,” says Lion. “If we think about the closure of doors and the lack of footfall I would say fragrance is resisting well in the UK.”
Italy’s fragrance market has transformed over the past three years, and the past year marked a further period of sustained growth for a country that is now edging out of recession.
Italy: Total fragrance sales, 2018
Source: Euromonitor International
NPD figures show that for the year ending March 2019 the prestige segment grew by 5%, with female fragrance up 5% and male scents increasing by 3%.
“What has changed is that growth used to be led by price increases – but this is less the case now as the market is growing in units too,” says Lion.
“In Italy, demand is dynamic. It is not concentrated on one or two retailers, there are a lot of independent and local chains that are very important to this market too.”
And although launches over the past year have been down by 10%, existing products have driven continued growth. “One main change in the women’s fragrance market is that Lancôme’s La Vie est Belle has risen up the bestseller ranks from number four to number two. It is interesting that it is still improving its performance,” says Lion.
CBD has been a significant trend and we may see more fragrances appear that are based around the latest ‘wonder’ ingredient.“It is essential to be able to support any beneficial claims made with evidence as consumers demand more transparency, particularly with wellbeing product claims.Angela Stavrevska, Creative Director and Perfumer, CPL Aromas UK
Bricks-and-mortar retail remains very important to fragrance, and to recruit consumers retailers can focus more on the way fragrances are made and process of discovering a new fragrance.Mathilde Lion, Director and Industry Analyst – Beauty Europe, The NPD Group
By 2022, the global fragrance market will be worth an estimated $70bn, according to figures referenced by scent subscription service Sniph, and much of its growth will continue to come from niche and artisan fragrances, which in 2018 shot up by 14%.
Forecast global value & growth, 2019
Source: Euromonitor International
But other segments of the market will continue to be challenged. Clotilde Drapé, Research Analyst at Euromonitor International says: “For the exclusive fragrance ranges from luxury designer brands, the next challenges will be around keeping a sustainable strategy to justify high price points. There are many emerging brands on the market which are claiming to have ingredients of high quality but that are managing to offer lower price points and as much exclusivity to consumers.”
“Many emerging brands are claiming to have ingredients of high quality but are managing to offer lower price points and as much exclusivity” – Clotilde Drapé, Research Analyst, Euromonitor International
The price of exclusivity
An example is Ostens, which offers ‘preparations’ or scented oil base formulas for consumers to either use by themselves or to layer and mix and match with edps from Ostens’ Impressions collection, or with a perfume from another fragrance house.
Moving forward, brands will have to make sure they catch the eye of consumers always on the look out for more exclusive concepts, says Drapé. The new Pacollection range from Paco Rabanne, which launches this month, exemplifies this by being a daring yet affordable concept featuring atypical packaging with soft bottles rather than traditional glass.
For other players, going back to the name and brand itself will be key to create a community of consumers faithful to the brand’s identity. “Gucci managed this very well with its fashion range and is now expanding this identity to its new fragrance range, the Alchemist’s Garden,” says Drapé.
And as the cost of sourcing quality ingredients continues to rise for brands, Drapé notes that “finding the right balance between price, quality and uniqueness combined with a strong marketing strategy will be key to attract consumers to the brand’s identity.”
Forecast global growth, by segment, 2019-23
Source: Euromonitor International
EXPERT INSIGHT: SOPOST
Amid a crowded market and changing retail landscape, it will be key for brands to find innovative ways for consumers to trial fragrances, says Jonathan Grubin, founder and CEO of technology platform SoPost
“As shopping habits change I expect there to be an even greater move to sampling through online channels. The decline in retail footfall and magazine circulation has forced brands to explore new channels for their samples. Combined with issues of economics, and the fact that we can make each sample work much more effectively than a ‘spray and pray’ approach, we’re seeing brands now launching many of their online activations with sampling as a key component – there is a lot of change happening with sample formats and communications strategy too, as a result.”