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Guess: How long is a million seconds? About 12 days. Now, how long is a billion seconds? Roughly 31 years.
This simple illustration helps give shape to the astounding sums being bandied about on every financial news outlet across the globe. The economy is in unprecedented straights, and while no industry can escape the repercussions, flavor and fragrance companies are faced with unique questions.
In comments delivered at this year’s Research Institute for Fragrance Materials’ annual meeting, David Duncan (Unilever) noted that companies such as his will be looking to cut costs. “This must not be achieved by shortchanging on quality,” he stressed, “and that includes fragrance and flavor quality … The fragrances in our products can help to reassure and promote a sense of well-being in difficult times.” As Duncan called for continued “commitments to sustainability,” he warned, “[Consumers] will likely also be more discerning and less inclined to pay for what they perceive to be unnecessary ingredients. The more transparent we can be on this, the more we can build and keep trust and our reputation for delivering value.” Sustainable fragranced products, he continued, will serve to “proactively [disarm] any accusations that fragrance ingredients are just unnecessary chemicals … Nobody is upstream or downstream on this; we are all on the front line.”
Meanwhile, during a conference call regarding Sensient’s fourth quarter and full-year 2008 results, president and CEO Kenneth Manning said, “The actual demand for our products is increasing as [our customers] go to maybe less expensive products to attract consumers. This gives us a chance to reformulate [in a way] that’s always a win-win. We can use other ingredients—we generally get a higher margin and the customer gets a product that’s more suitable for his customers.” Dick Hobbs, the company’s senior vice president and CFO added, “Reformulation … gives us an opportunity to produce a new product for the customer with new ingredients.”
While headlines portend further job losses, curtailing of expenses and ongoing uncertainty, the industry overall remains focused on winning—not just today, but also tomorrow, in brighter economic times that will demand sustainable and efficacious products. We know these and countless other issues weigh on the minds our readers and our colleagues, and so we encourage you to reach out and tell us what your concerns and strategies are for the next 12–18 months. How are you dealing with the current crisis and how are you positioning your organization for the dynamic consumer waiting on the other side? I look forward to the discussion.