Did you know, humans can distinguish more than 1 trillion scents? According to Martina Bianchini, President of the International Fragrance Association (IFRA), “smell is an essential part of our life, yet of our five senses, it’s perhaps the most underrated, but one with a unique power to stimulate the emotions, trigger memories, to attract, comfort or excite.”
There is no doubt that fragrance is a key driver in purchasing decisions. In fact, a recent report – published by PwC for IRFA last year – found that consumers were willing to pay up to 88% of the price of a product simply for the fragrance element.
Valued at USD 31.4 billion in 2018, the global fragrances market is continuously shaped by evolving innovation, major trends, and ever-changing consumer preferences for fragrance in personal care products. R&D professionals that explore how fragrance enhances the brand experience and use this knowledge to elicit an emotional response in consumers will be able to tap into this ever-growing market.
Is natural fragrance for cosmetics always better?
Beauty buzzwords ‘clean’ and ‘natural’ continue to dominate all categories within the personal care industry, including the fragrance sector. And this global demand for natural products provides lucrative opportunities for key players and emerging indie brands.
Valued at USD 2.7 million last year, the natural fragrance market is projected to reach USD 4.3 million by 2024, at a CAGR of 9.6%. This growth has largely been led by Europe and North America, but today several emerging economies are making waves in this sector of the market, including China and Japan.
Synthetic ingredients in skincare products are a concern for many, particularly those with sensitive skin. And it is this that is driving the demand for natural or organic fragrances and in some cases ‘fragrance-free’ products. In line with the widespread trend, even those without skin sensitivity are opting for natural ingredients to avoid adverse reactions.
Synthetic fragrances are created using chemicals, while natural alternatives are typically made using essential oils or natural extracts. Though more expensive to produce, essential oils are estimated to lead the natural fragrance market in terms of value.
But do synthetic fragrance ingredients cause irritation? Perhaps surprisingly, both synthetic and natural fragrances contain allergens that can be bad news for sensitive skin. In fact, essential oils are concentrated and higher in compounds such as limonene, citral, geraniol and other allergens that must be included in ingredients listings. For this reason, formulators and R&D professionals must understand fragrance allergens and how these fragrances can interact with other ingredients in a cosmetic formulation.
With that said, consumers’ ongoing preference for natural ingredients ties in heavily with the all-encompassing wellness trend that has dominated global markets in recent years. With further stresses due to COVID-19, Samantha Dover, Senior Beauty and Personal Care Analyst at Mintel, also believes that “[fragrance] products which claim to offer emotive and wellbeing benefits will resonate” with consumers in a post-pandemic world. She goes on to say “the top mood/emotional benefits UK fragrance users are looking for are de-stressing, energising, and relaxing.”
Continued research into the influence of fragrance on human physiology, plus advancements in treatments like aromatherapy, is another factor driving innovations in the fragrance market.
The global aromatherapy market is expected to grow at a CAGR of 10.4% from 2015 – 2026, reaching a value of USD 2.8 billion. The report by Grand View Research suggests that the APAC region is expected to see the highest growth in this forecast period due to an increasing interest in essential oils across China and Japan, as well as the rising number of burn accidents in India which has led to an increased demand for essential and carrier oils that are used to treat burn scars.
Sustainability in fragrance ingredients
Another major trend impacting the fragrance market – and wider beauty and personal care industry – is the challenge of sustainability. As previously explored in the ‘Road to in-cosmetics Asia’ series, eco-conscious Generation Z and Millennials hold a majority of the spending power between them. This means brands are being forced to consider how they can source their ingredients sustainably, reduce emissions during production, deliver greener formulations, and package their products in recyclable materials. “Right now there is a lot of irresponsible activity in perfumery, from deforestation to river pollution. But it’s changing: manufacturers are leaning towards more transparency, being cleaner and having a conscious eco-impact,” comments Mona Maine de Biran, co-founder of Kierin NYC.
According to Mintel, as many as half of UK consumers think that fragrances have too much unnecessary packaging. “Low-waste packaging was important a couple of years ago, nowadays it is critical and necessary to ensure business continuity,” comments Luis Miguel Gonzalez, Perfume Business Unit Managing Director, Bulgari. The premium label claims to be the first selective perfume brand to launch one of its fragrances in 90% post-consumer recycled glass.
However, many, even within the industry, don’t believe the sector is doing enough. “Although we are starting to see movement in health and beauty brands adopting eco-friendly packaging there is still some way to go,” comments Michelle Feeney, Founder of Floral Street. Brands that can innovate in this field, make sustainability a focus and communicate this to their customers will likely succeed in the fragrance marketplace.
On the contrary, many within the industry are positive about the industry’s movement towards a greener future. Angela Stavrevska, UK Creative Director and Perfume at CPL Aromas, says: “The key thing 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.”
One solution for brands is refillable packaging. Mainstream brands have already begun offering this, including Lancôme which launched its first refillable fragrance, Idôle EDP, last year, as well as Viktor & Rolf’s popular, Flowerbomb.
Others are making strides in sourcing ingredients sustainably. Swiss brand, Chopard, for example, works with Firmenich’s Naturals Together programme to source ingredients for its fragrances.
The programme, which was first launched in 2014, aims to bring together artisans, natural ingredients, and suppliers with a focus on social and environmental awareness. Another fragrance brand considering its environmental impact is Clean Beauty Collective, which funds a programme providing clean drinking water to the local community and champions organisations that support the families working hard to harvest the ingredients used. In addition, the brand – famous for its Clean Reserve line- also packages its fragrances in compostable corn-based cellophane and recyclable paper.
So what about natural – does that inherently mean it’s more sustainable? Synthetic ingredients can in some cases protect against the extraction of natural ingredients that would be detrimental to the environment. When speaking to Cosmetics Business, Founder of Ellis Brooklyn, Bee Shapiro said: “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.” Michelle Feeney adds: “Some natural materials are no longer in general use due to over-processing or animal cruelty – so are synthesised to be ‘nature identical’”.
The digital future of fragrance
Our digital world is governed by sound, pictures and moving image, but never scent. And so fragrances, by their very nature, are difficult to sell online – something that has been amplified by the recent coronavirus pandemic.
Though many consumers do purchase their fragrances online, they tend to take an omnichannel approach, buying repeat purchases rather than using the internet to discover new products. “We need to shop it in-person to trust our senses of fragrance on skin, but online research focuses on detail that’s hard to emotionally connect digitally,” comments Michelle Bower, Associate Director, Creative Strategy at Dalziel & Pow.
Some experts suggest that fragrance brands need to offer a more personable online shopping experience when it comes to scent. Samantha Dover believes that to reach consumers, brands must leverage influencer and user-generated content as “unlike other beauty categories, product descriptions, reviews and AR do little to aid the fragrance decision-making process, while trust in AI-powered fragrance questionnaires is weak”.
Though perhaps neglected online, scent technology is advancing and new products for the home are being developed to help consumers connect the dots between digital and real life. These technologies present the consumer with a chance to ‘engineer’ individual moods for specific occasions or times of the day, in a similar way that a playlist would.
One such device is Cyrano – a scent speaker which uses capsules to emit playlists of smells that can be paired with videos, or shared with friends through the app. David Edwards, Harvard professor and inventor of Cyrano, said: “Cyrano introduced to the commercial market a revolutionary new way to link one of the most important human senses to our digital world. Our moods are influenced by light as with the sunshine and by sound as with music, but even more profoundly by scent, as with the fragrance of an orchid, or the aroma of hot chocolate. The olfactory nerve is the only sensory nerve with direct access to the brain. With Cyrano, we can design our lives with all three dimensions of sensorial control.”
Another example is NOTA NOTA which labels itself as a ‘personal perfume mixing machine that connects the world around perfumery’. The fragrance concept allows users to design and prepare a unique perfume for any occasion, aiming to “become part of the user’s daily routine.” Elsewhere, IoT technology is allowing users to control fragrances in their homes via a smartphone or computer, based on personal preference. This includes the Scentee Machina – the first and smartest room diffuser in the world.
One for all: Fragrance trends
The launch of Calvin Klein’s first unisex perfume, CK One, in 1994 is considered by many to be the first unisex fragrance to enjoy commercial success. However, it’s only in recent years that we have seen this trend dominate the category.
Social attitudes have shifted, and as consumers focus more on their personalities rather than gender norms, we are seeing a return of this trend in the fragrance market.
In fact, the premium unisex fragrance was the strongest performing fragrance category in 2018, with global sales up 7.5% to $2.4bn according to Euromonitor International. And, individual retailers have reported sales mirroring this growth, with Liberty London noting a 40% increase in sales of its unisex scents in the same year.
Further to this, the Cinquième Sense agency found that unisex or genderless perfumes represented around 60% of new product launches in 2019. Mona Maine de Biran of Kierin NYC commented: “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.”
As a result, brands are reacting to formulate and market products that speak to both genders as one – moving away from typically masculine or feminine fragrances. In 2019, several launches capitalised on this new trend, with Maison Francis Kurkdjian launching its range, Gentle Fluidity. Here, the power of brand collaborations has also been noted, with Designer Parfums collaborating with Formula 1 to produce its first-ever unisex fragrance, while Jo Malone teamed up with Zara to launch a unisex collection known as The Zara Emotions Collection by Jo Loves. Céline Barel, perfumer at IFF, believes “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.”
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