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Navigating the Fragrance Revolution with Jean-Paul Agon of L’Oréal

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“Position yourself to go with the wind,” Jean-Paul Agon said when Linda G. Levy, Fragrance Foundation president, asked how his passion for sailing and his 39-year career with beauty went hand in hand. In the case of the latter, the wind refers to positioning business strategy towards growing segments in beauty and fragrance, including artisanal brands, ingredients and sustainability.

As chief executive officer and chairman of L’Oréal, Agon described himself as “intense” and “passionate” in the intimate Masterclass session held by the Fragrance Foundation at the French Institute Alliance Française in New York City on October 5, 2017. Hosted by Linda G. Levy and sponsored by Givaudan, the second annual Masterclass offers exclusive professional and creative insight for the fragrance industry, including the Fragrance Foundation’s up-and-coming thought-leaders, aptly named The Notables and undergraduate and graduate students from the Fashion Institute of Technology.

“We’re excited to have a visionary and beauty icon here tonight…We’re looking forward to sharing ideas and life experiences…and that will leave you feeling inspiring and enlightened,” Levy said in her opening speech. 

Introducing Agon to the stage, Felix Mayr-Harting, global fine fragrance president of Givaudan said, “Honestly, I think there’s no greater opportunity than the opportunity to hear from and learn from other leaders who define our industry…As a leader in the industry, Mr. Agon shines a light on new paths: building brands that consumers love, opening emerging markets, leading the industry in digital and pioneering in sustainability programs.”

Planning Locally, Thinking Globally

Universalization. A word that Agon defines as creating a global business strategy so that products are relevant everywhere for the consumer. “In the beauty world, you need to have global brands and they need to be in every part of the world. If you take the L’Oréal Paris brand, the number one brand in the world, the formulation of the products will be different in every part of the globe.” Though the brand may be present universally, the products will be formulated to be catered to that specific regional audience, he explained.

“We try to reconcile this necessary global approach, but never forgetting the relevant approach for every consumer.”

Brands can certainly change shades in makeup and formulations in skincare to fit consumer needs, but fragrance plays a different kind of tune when it comes to global consumer relevancy.

“A successful fragrance in Europe may not be successful in America. You can play with your portfolio [in fragrance] based on region,” added Agon.

Opening up New Dimensions

Beginning his career at 21 in sales and marketing for L’Oréal in Paris, Agon showed promise early in his job. This promise led him to Greece for four years as general manager of the region, where he learned to speak Greek fluently, which proved to help him establish stronger relationships with his team and customers.

Agon traveled across the U.S. for six months, visiting 500 stores, as a way to understand American retailers and consumers. “American consumers are obviously one of the most expert and discerning consumers of the world, and that’s why the competition here is so fierce,” Agon explained. “The competition in the U.S. is…so healthy. I think that this industry [is] all about innovation, new ideas, new creation—especially in the fragrance world—so the more competition there is, the better it gets.”

This competition is exactly what drives L’Oréal to hold the position of number one beauty company in the world. Despite the company’s size and presence in the world, Agon describes it as a family business that has been with the same family for 110 years. “It has more than a $120 billion market gap. It’s a huge size. But it has the soul of a family business,” he said. After the passing of Liliane Bettencourt, the only daughter of L’Oréal founder, Eugène Schueller, in September, the company was in an emotional state and employees from all over the world felt a deep connection with L’Oréal’s “grandmother.”

"The digital revolution places the consumer at the heart of the whole industry. It opens up new dimensions, new horizons and new perspectives to this industry."

He continued, “We want to be a large company with the spirit of a small one. A leader in the spirit of a changer and we want to keep the culture of the company very entrepreneurial. At L’Oréal, everything is based on the people [first]…and [adapting] the business [strategy] to them.”

This is in the wake of the company recently acquiring artisan perfumery, Atelier Cologne, which Agon sees as a long-term investment for the company. The rise of artisanal brands offers authenticity and quality that Agon believes will create a positive impact on the industry.

Leveraging Digital

“The digital revolution places the consumer at the heart of the whole industry. It opens up new dimensions, new horizons and new perspectives to this industry,” Agon said. The digital retail shelf is booming, and translating a fragrance’s story on the screen offers up opportunities for brands to target a product to the right audience. As the industry becomes more segmented and brands are working on several campaigns at a time, digital and social offer a trackable, more refined path to reaching a consumer.

A critical area of development is ingredients and telling the story to consumers. Agon emphasizes the importance of brands and suppliers working together to push the story outside of the industry and into the consumer space.

Referring to his passion for sailing, Agon explained “If you are a brand or a segment of the market where there is no wind, you can do whatever you want [still] you will not grow. If you position yourself smartly on what I call the ‘sailing trend,’ immediately you will see fantastic growth.” Agon’s job is to direct his team to the wind.

“We have to [tell] the ingredient story of the perfume, and we need to bring that to the consumer. We’re on that quest,” Levy added.

As the consumer, digital, retail and ingredient revolution continues to grow, the industry is kept on its toes to adjust its sails for the next big gust. And what else will keep the industry thriving? The people who love their jobs. Agon concluded the evening by addressing the Notables, who were all eagerly sitting in the front row to listen to him wrap up his story with, “Do what you love.”

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