According to a 2013 report from Alix Partners, “Consider the Source,” it has grown more expensive to do business in China compared to Romania, Russia, Vietnam, India and Mexico, largely due to energy, labor, shipping, water and land cost increases in recent years. China’s growing scrutiny on pollution controls has also exacerbated the cost increases. Some sourcing in the aromatic ingredient market has already shifted to Vietnam and other parts of Asia. Given these factors, manufacturing in alternative locations, including the United States, could become more competitive, explained Robert Weinstein (Robertet) during a panel discussion held at the annual business meeting of the International Fragrance Association North America (IFRANA).
The panel, which comprised Weinstein, Jean-Paul Benveniste (Phoenix Aromas), Monte Henige (Tru Fragrance), Paul Pearl (Arcade Marketing), Andy O’Shea (drom) and moderator Jennifer Abril (IFRA North America), discussed several factors affecting the industry in North America and beyond, including sustainability. Currently, many companies are able to apply their sustainability initiatives as a competitive advantage. However, brands are beginning to feel the pressure from retailers to become more sustainable in exchange for precious shelf space. While no organization can ignore sustainability, the IFRA North America panelists wondered whether customers will actually pay for it, or if instead it will become a commoditized and expected part of business practices. And, the panelists asked, will consumers pay extra for it?
According to a 2013 Nielsen report, “Fifty percent of global consumers surveyed are willing to pay more for goods and Members of the incoming IFRA North America board. From left, back row: Michel Mane (Mane), Robert Weinstein (Robertet), Karen Manheimer (Kerry), Fred Kritzer (Symrise), Edward Gotch (Emerald Kalama), Robert Amaducci (Flaroma), James Heinz (Bell F&F), Andy O’Shea (drom) and Jennifer Abril (IFRA North America); front row, from left: Paul Ireland (Takasago), Joy Atkinson (Firmenich), John Vernieri (Givaudan), Steve Tanner (Arylessence), Jean-Paul Benveniste (Phoenix Aromas) and Kim Bleimann (Berjé); read Vernieri’s open letter to the industry on Page 64. 41 services from companies that have implemented programs to give back to society, an increase of five points (45%) from 2011…”