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Fragrance Market Results and Outlook
Posted: April 23, 2008
Analyst Alex Kirilov (Euromonitor) has issued a mixed report on the state of the cosmetics and toiletries industry (including fragrance) for 2007–2008. The US market, Kirilov notes, is slipping:
As the US economy faces increasingly gloomy prospects, the cosmetics and toiletries market shows strong signs of contraction, with virtually no growth in real terms in 2007 and a disappointing outlook. According to Euromonitor's forecast, the US market will decline 2007–2012 by almost $1 billion—as calculated in 2007 prices—or 0.4% a year on average. Fragrances will be the sector hardest hit by the economic downturn, as cash strapped consumers turn away from items they consider superfluous.
The report goes on to note that the global fragrance market totaled $33 billion in 2007, driven by celebrity scents, particularly in Western Europe. Kirilov also cites a fragrance boom in Latin America, Eastern Europe and Asia-Pacific (excluding Japan).
Finally, the report takes an upbeat (but conflicted) take on the demand for natural/organic products:
Products with natural claims account for 10–12% of the global cosmetics and toiletries market. Demand continues to boom as consumers become more concerned about their health and increasing exposure to chemicals during their daily beauty routine ... However, the lack of global and regional standards for natural cosmetics and toiletries products still confuses customers ... Euromonitor International expects internationally harmonized standards for naturals some time in the future, with strong growth expected as a result."