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Global Fragrance Market Booms

By: Diana Dodson
Posted: February 11, 2008, from the February 2008 issue of GCI Magazine.

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Celebrity fragrances are primarily positioned toward younger women and teens, but manufacturers are increasingly expanding the trend to new demographics. Lovely by Sarah Jessica Parker aims at the 30-plus age group, and Danielle Steele’s eponymous scent targets the older set. Men’s celebrity fragrances have become the latest area for innovation, and, in 2006, Sean John Unforgivable became the first to break into the global top 10 for premium men’s scents.

Coming years could also see the beginnings of what some industry sources suggest is an inevitable backlash against celebrity scents—and this will be driven by consumers as their growing sophistication makes them more likely to be persuaded by interesting scent combinations and innovative delivery formats than by savvy marketing campaigns. However, manufacturers may also start pushing for this shift. Celebrity brands do not tend to have longevity, and in fragrances, extending shelf life has become vital in an increasingly fickle market.

There is some evidence that this is already beginning to happen, as speciality fragrances emerge as a fast-growing niche. Le Labo, for example, is an ultra high-end but unbranded fragrance range that was created as a reaction against mass-produced premium scents. Fragrances are mixed on-site upon purchase, and are only available in selected retailers and the company’s own “labs.” The proliferation of bespoke fragrances is further evidence of this trend toward exclusivity over broad-appeal brands.

Even more compelling, some heavyweight scent brands are moving toward a narrower but higher value consumer base. Procter & Gamble’s vice president of fine fragrances, Markus Strobel, said the company would be aiming for “fewer, bigger and better launches.” Other firms, such as Bulgari and Gucci, are taking tighter control over the distribution of their fragrances to keep them out of mass retail channels.

Wellness Trends: the Catalysts of Innovation?

The global fragrances market is set to grow by approximately 3% through 2011 to reach $35 billion. While premium fragrances will remain the largest segment with steady growth of 2% a year over the forecast period, mass fragrances will be the more dynamic, with a compound annual growth rate of 4%, driven by new demand in emerging markets.