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Ruth Sutcliffe provides perspectives on success and innovation in fragrance at the WFFC Fall Meeting.
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In the spring of 2009, the Women in Flavor & Fragrance Commerce (WFFC) technical affairs and education committee met to decide the topic of this year’s fall seminar. The intent was to focus on the most relevant issue and design a program that would help the WFFC members not only navigate towards, but also to create, their own success in the industry. Accordingly, this year’s fall seminar discussed a topic that is continues to weigh on everyone’s mind—the economy and its effect on corporations and individuals.
The seminar began with Linda Bowden, regional president, PNC Bank, Northern New Jersey, presenting some challenges that women face in the industry. Bowden noted that during the recession women’s wages fell faster than men’s, and that women are more likely than men to hold subprime mortgages. Moreover, statistics suggest that, as recently as 2005, for every $1.00 that men earn, women earn $0.77. However, she added, we also live in what is sometimes referred to as the “Lipstick Economy,” where for every 100 men that graduate from a college or university, 135 women graduate, and women hold 60% of graduate degrees. As such, while women have a bright future, they have to build and use their networks, seek out mentors, and offer to mentor others.
The second speaker at the event was Keith Aleardi, director of investment and senior vice president, PNC Bank, who discussed the overall economy and demonstrated the relevance of some seemingly abstract statistics to individuals. Comparing economists to weathermen, he said a weatherman’s temperature evaluation of 56 degrees is different from the actual “feels like” temperature of 49 degrees, if we consider the wind chill factor; the same holds true the economy. So, while it appears that the recession is technically over (and the worst is probably behind us) it will most likely take another 12-18 months for it to feel like the economy is improving. However, Aleardi noted, as the economy stabilizes and businesses gain confidence in the industry’s growth prospects and their ability to plan for and predict the future, they will begin making new investments and hiring more people. Further, believing that there is a considerable pent-up demand in the economy, Aleardi pointed out that compared to five years ago there was an additional $4 billion in cash available for investment and consumer purchases, which should translate to a positive business environment.
Next, Dietmar Hirt, managing director, Conexus Capital Advisors, Inc., discussed the landscape of the flavor and fragrance industry, calling the top five F&F houses as the “Billion-Dollar Club”—all having annual revenues in excess of $1 billion, and together possessing over 50% market share (by revenue). Hirt believed that consolidation in the industry will continue, and although the industry will rebound as the economy improves, he does not see a major re-stocking occurring. There will be fewer entrants into the industry in the coming years, largely due to entry barriers such as regulatory issues, he said, stressing the need for companies to build sustainable business models. Companies cannot be everything to everyone, and they need to focus on their strengths and to decide how and where to compete. Most of all executive management must be proactive. It is okay to pursue more than one strategy simultaneously, but a long-term strategy is of vital importance, Hirt said.