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Industry Snapshot: WFFC Fall Seminar Presentations

By: Mary Herbst, Berjé; and Gillian Bleimann, Whole Herb Co.
Posted: November 9, 2009
Ruth Sutcliffe at WFFC Fall Meeting

Ruth Sutcliffe provides perspectives on success and innovation in fragrance at the WFFC Fall Meeting.

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Complementing Hirt’s presentation, John Vanarthos, chairman of the Norris McLaughlin & Marcus corporate law department, discussed the more technical and legal aspects of mergers and acquisitions. To simplify, he identified 10 steps to the process of buying or selling a company—(1) identify what it is you want; (2) prepare; (3) go through the sales process; (4) structure and negotiate; (5) sign the letter of intent; (6) complete due diligence; (7) negotiate and sign the transaction contract; (8) complete post-contract and pre-closing activities; (9) close; and finally, (10) wrap-up post-closing items. Preparation was cited to be of the utmost importance.

Customers are Key

The seminar’s next speaker, Stan Frankenthaler, executive chef/director of culinary development, Dunkin’ Brands, focused on the flavor side of business, by making the important distinction between consumers and customers—consumers, he said, are people that are analyzed in blocks with certain bookends (for instance 16-24 year olds could be a consumer group.) Frankenthaler noted that customers, on the other hand, are individuals that support a business on a regular basis; customers (and not consumers) are key, as is repeat business.

Creating a Future

Taking this discussion a step further, Herma Schmitz, principal, Executive Coaching Group, Inc., spoke on people empowerment to cause a breakthrough in performance. Excluding shareholders for the moment, Schmitz explained the three levels of conversations that occur in an organization: (i) the executive level, where leadership lives, discusses and creates the long-term future of the organization; (ii) the middle or operational level, where the viability of the organization lives, people engage in projects that are measurable in time; (iii) the individual level, where short-term conversations occur. In addition, there are two different types of language, Schmitz noted— (i) the descriptive that includes stories and opinions, and is based on past events, and (ii) the declarative that signifies the act of making a statement, thus allowing something to become possible in the future that was not possible without the declaration. According to Schmitz , for an individual, as well as the organization to succeed, one needs to first make a declaration, and then manage the conversations in order to fulfill that declaration. If a declaration is not made, then one accepts the “default” future, which is nothing more than a continuation of the past. Thus, Schmitz stressed that it is up to leaders to make declarations and cause the future, and up to managers to manage the breakdowns along the way; the individuals, meanwhile, have the power to make their own declarations and create their futures, she added.

Fragrance’s Next Chapter

Next, Leslie Smith, vice president of fragrance technology for Coty, discussed the role of technology in the fragrance world, noting that the three main technology platforms are based on added benefits, sex/emotion/psychological attributes, and performance. Explaining this further, he said added benefits could include antibacterial, anti-aging, slimming or deodorant properties; technology to improve performance includes processes such as encapsulation and film-forming. Finally, underlining the importance of new molecules in the fragrance industry, Smith said, new molecules can improve creativity, take a fragrance in a new direction, replace scarce naturals and contribute to sustainability, and replace regulated ingredients.

The conference wrapped up with a presentation from Ruth Sutcliffe, senior director, international fragrance development, Coty, who discussed how fragrance (like fashion) evolves in cycles and often imitates fashion itself. To explain this, she cited examples from the era of depression and prohibition in the United States, and the creation of fragrances like Tabac and Old Spice; the abstract expressionism of the 1940s and 1950s coincided with the launch of Miss Dior and Youth Dew; the popularity of green florals and fougere grew in the 1960s and 1970s; the rise of very loud fragrances occurred in the booming 1980s, followed by the marine notes of the 1990s; today, new musks rule the innovation landscape. In this complex backdrop of trends, Sutcliffe cited some steps that one can take to innovate and stay ahead of trends. For one, it is crucial to read a variety of magazines, newspapers, and literature every day, she said. In addition, one can look at architecture, jewelry and electronics to see what is new in those categories; use trend agencies; and look at the sciences, politics, pop art, blogs, social media. Being aware of one’s competitors is crucial, Sutcliffe added, as is being passionate and open minded.