This is only an excerpt of the full article that appeared in P&F Magazine. The full content is not currently available online.
The relationship of perfume to economic cycles was the focus of Michael Carlos' presentation at the Fragrance Materials Association's (FMA) spring dinner. Carlos, Givaudan's worldwide president of fragrances, examined this "olfactory pendulum," beginning in the years leading up to the Great Depression. That age was marked by the launch of scents such as Shalimar and Chanel No 5, which evoked exuberance and extravagance. The Depression years, meanwhile, were marked by the counter-intuitively prestige-positioned Joy, which was a success despite its price point. Much later, Carlos explained, Anais Anais was launched during the economic woes of the 1970s, while the 1980s was characterized by the sensuality of blockbusters such as Opium and Obsession.
Today's economic woes are profound, and likely to reshape the fragrance industry. Consumers are trading down in fabric and home care options, while "destocking" their fine fragrance collections before heading back to retailers for another purchase. While Carlos noted this cycle will subside and sales will pick up, demand may be lowered for some time. In such an environment, the proliferation of flankers is no longer possible. In addition, said Carlos, mass and high-end luxury will do well, with the middle ground between the two likely being lost over time. How companies deal with this phenomenon in the future will be crucial.
“The desire to know more increases exponentially,” Carlos said of growing fragrance regulatory scrutiny. Here he urged industry cooperation and sound science in the service of intellectual property protection and consumer and NGO education. In addition, he said, the fragrance industry must continue to communicate its value, citing the statistic that while fragrance accounts for 6% or less of any given consumer product's cost, it actually drives 50% of the value in consumers' eyes.