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Innovation for Changing Local and Global Realities at WPC 2012
By: Jeb Gleason-Allured
Posted: August 31, 2012
Les Smith, Coty, discusses fragrance innovation and consumer impact at WPC 2012
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Core fragrance supplier contracts have become increasingly elaborate and are now formally legally binding, a drastic evolution from mere letters of understanding, said Smith. “This leads to very intimate relationships … with smaller and smaller groups of fragrance companies. Multinationals are down to two or four or five suppliers. This gives you a tremendous opportunity to work with the creative forces of the fragrance companies and dig into their treasure troves of their technologies and to push toward a mutually beneficial transparency. Transparency is something our suppliers understand that we need.”
These partnerships will become increasingly close, he continued, with suppliers and CPGs collaborating on exclusive technologies and techniques. This cooperation will focus on needs such as longer-lasting fragrances created with greater understanding of polymer and delivery systems and deeper knowledge of the interaction of fragrances with surfaces; innovation in molecules to overcome economic and regulatory issues using synthetic organic chemistry; and improving the understanding of the psychology of fragrance, including receptors, molecules and mixtures. Innovation is not just technology. “We’re also looking at operational innovation … manufacturing locally, helping with speed to market,” he added. Suppliers will see benefits in helping CPG customers grow by sharing in their success, said Bartoletti. However, she said, supplier-customer transparency will have to be more clearly defined within these partnerships.
The Next 10 to 20 Years
Penetration of fragrance usage is relatively low around the globe, said Bhasin, noting that three-quarters of the world’s consumers don’t know the benefits of fragrance in a beauty routine. If this becomes ingrained in these populations, growth will come. There is huge potential to increase consumption in the core, he said. Accomplishing this may require creating a new business model or working with small disruptive companies.
Meanwhile, said Bhasin, sustainability has to be taken seriously by suppliers and CPGs. Sustainability, to be successful, must make a difference in the lives of consumers. “Sustainability isn’t quite there yet,” said Smith. “It’s not an added benefit for the consumer. It doesn’t sell products, yet.” However, he noted that it will drive the marketplace of the future. Bartoletti added that sustainability will be part of the brand trust equation of the future.
On the innovation front, Smith noted that the industry needs to better understand the mechanisms and affects of fragrances to better understand what makes one scent more successful than another. “We need to understand the psychology of ingredients,” he said. “We need to be able to predict exactly the psychology of complex mixtures. Ultimately we need to understand the psychology of product selection and purchase.”
Bartoletti agreed and added that the fragrance industry will need to liberate creativity through continuous reinvention. “We may sometimes have to exit from the comfort zone,” she warned, adding that the industry will be well-served by reassessing how it identifies and builds talent.