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The Business of Smell
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AUGUST 2010ReportLinker.comFind All 2010 Market Reports, Business News & Company
Fragrance Industry Analysis:Reigniting Growth in the Fragrance Industry
REPORT EXTRACT
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Reigniting Growth in the Fragrance Industry
AUGUST 2010
Objectives of Global Briefing
• To identify which regions and individual countries are key for fragrance sales globally and the reasons behind this.
• To assess which markets and regions are set to drive future growth in fragrances.
• To ascertain which categories of fragrances represent the majority of fragrance sales, the rea-sons for this and the categories with the best potential for future expansion.
• To identify key trends in fragrances and to assess the current and future impact of these trends.
• To assess the impact of changes in retailing trends on fragrance sales.
• To analyse how fragrance manufacturers have adapted their strategies in the recession and beyond.
• To consider the outlook for the fragrance industry and in particular the impact of global eco-nomic recovery on growth.
ReportLinker.comFind All 2010 Market Reports, Business News & Company
Reigniting Growth in the Fragrance Industry
AUGUST 2010ReportLinker.comFind All 2010 Market Reports, Business News & Company
Key Findings
Poor performances in some of the biggest and most mature fragrance markets such as the USA and Japan dragged down global fragrance growth to just under 4% in 2009, from 5% in 2008. Consumers are sacrificing fragrance purchases in premium-dominated Western markets, while mass brands maintained growth better, primarily due to strong growth in Latin America where mass scents comprise the vast majority of sales.
Many of the new product launches in 2009 and 2010 were either celebrity fragrances or extensions Many of the new product launches in 2009 and 2010 were either celebrity fragrances or extensions of existing brands. A reduction in consumer spending on scents led to reduced marketing budgets and thus using well-known names made good sense. Latin America bucked the trend of reduced spending on fragrances in 2009: the region actually im-proved on its 2008 performance in value growth terms in 2009.
In terms of individual markets, emerging countries with low consumer debt levels topped the highest growth list. Latin American countries such as Venezuela, Brazil and Argentina were among the high-est performing.
One of the major disappointments in 2009 for the fragrance industry was Eastern Europe. The region had previously experienced buoyant value growth but suffered a steep drop in growth in 2009 due to the impact of the global recession on the region. Hopes of recovery are being boosted by the regions of Latin America and Eastern Europe. Both are set to outpace Western European and North American fragrance constant value CAGRs by 2014. Two divergent trends have emerged in fragrances: diversification in response to trading down/lower demand to spur further interest; and drive for exclusive scents in response to oversaturation and demand for niche, tailored individual fragrances.
