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The Four Worst Factors in Fragrance Today, Part I

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In thinking about what is having the worst effect of the fragrance industry today, I was hard pressed to find a single factor that explains all the problems surrounding quality, reformulation, and customer satisfaction. I think that to discuss matters fully, we need to look at four separate, but interrelated issues.

1. Sourcing and cost of raw materials

Over-harvesting of many perfume materials has provoked a situation in which many are at a point of near-extinction. In a recent report issued by Cropwatch (which describes itself as “a loosely based, non-financed, independent watchdog to the aroma and natural products trade, in existence approximately seven or eight years”) has identified all four major animal perfume materials and 71 plant-derived perfume materials that are classified by International Union for Conservation of Nature (IUCN) “near threatened” or higher risk.

Many of the formerly most-valued materials, such as sandalwood oil and musk deer extracts, are so near extinction that they are effectively unavailable on the market. Where there is a black market for such materials, its existence threatens to extinguish these species permanently by continuing to harvest the materials. Reputable perfume manufacturers will not touch these substances. In other cases, such as ambergris, controversy exists as to whether these materials can be collected without damage to endangered species. Many perfumers claim that natural ambergris extracts are available from beach-found materials, but Cropwatch contends that there is evidence that sperm whales killed for other materials in which ambergris is found are contributing to the market (or perhaps black market) supply.

In any case, the cost of these materials is driving manufacturers to seek lower-cost synthetics to substitute for them in newer production; many perfumers feel that these synthetics are not the equal of the natural substances and do not work well when blended with other both natural and synthetic materials.

2. Rush to market

The fragrance industry is controlled by five or six large multinationals whose main concerns are with bottom-line profit issues. If we take the top ten in flavor and fragrance, there are five headquartered in Europe, two in Japan, two in the United States, and one in Israel. Their combined sales volume in 2010 was $16.7225 billion, representing 76%of the total world market; all other companies in the business share the remaining 24 percent.

In order to save on costs, perfumes go through fewer iterations during research and development. From the original brief handed to a perfumer to the final retail distribution, costs are minimized chiefly by restricting the time devoted to development; i. e., the formulas are designed, tested, and redesigned, going though this process the minmum number of times to get a saleable product. Materials budgets are also restricted for mass-market placements, in order to keep profits high. On average, when you pay $80 for a bottle of scent, about $1.60 (or 2% of the total price) is represented by the actual cost of the odorant material in the juice. [Reference: See Part II, #4]

3. IFRA and the synthetics industry

The International Fragrance Association (IFRA) “is the official representative body of the fragrance industry worldwide. Its main purpose is to ensure the safety of fragrance materials through a dedicated science program. IFRA publishes a list of usage standards for fragrance materials based on the findings of the Research Institute for Fragrance Materials (RIFM).” IFRA members are flavor and fragrance associations from around the world. The largest number of members represents the European area. There are four areas in total around the world; the other three areas are North America, Asia-Pacific, and Latin America. In actuality, IFRA is closely associated with agencies of the EU, siting its headquarters in Brussels, where the EU is also headquartered. IFRA and RIFM both work closely with such EU organizations as the Scientific Committee on Consumer Products (SCCP) and the Scientific Committee on Cosmetic Products and Non-Food Products (SCCPNFP), both of which have input to EU health and safety regulations. This close relationship has led some in the perfume industry to believe that IFRA's association with these bodies results in certain advantages to synthetic fragrance companies, which are created by recommending the elimination or restriction of many natural odor materials which IFRA (based in RIFM research) finds to be toxic, allergenic, or extinction-threatening. This opens the field to synthetics companies to offer their synthesized materials as alternatives to banned and restricted substances. Cropwatch considers this a fear tactic aimed at consumers, which puts pressure on perfumers to omit these materials from their perfume palette.

Many Basenoters are aware of some of these facts, but there is one effect that we may not see here: it is that forcing all perfumers to restrict their palette of usable materials has the effect of “leveling the playing field.” It is a kind of Gresham's law of perfume. If bad money drives good money out of circulation (Gresham's Law in economics), banning or restricting natural products forces everyone to use synthetics to replace them, thereby cheapening the “coin” of perfumery. Now this isn't to say that all synthetics are bad; some are really quite good and are even acceptable substitutes for the naturals. Yet the overall effect is one of substituting lesser, cheaper products for better, more expensive ones, thereby lowering costs and maximizing profits all around.

Cropwatch alleges certain complaints against the IFRA process, to wit, that IFRA:
  • Has banned or restricted ingredients essential to several historic perfume types, such as hesperides, orientals, fougères, and chypres.
  • Has used faulty research and has sometimes published data that experienced perfumers easily recognized as containing errors of fact, such as misidentifying the botanical source of common perfume materials. Evidence which IFRA has used to ban or restrict natural perfume materials has on several significant occasions been disproved by independent studies.
  • Works through committees that are often staffed by persons related to large fragrance materials producers which rely on the sale of synthetics for their profits.
  • Accepts studies presented to it and other Health and Safety agencies of the EU often produced by persons associated with these same firms.
  • Does not declare that many of the synthetics that are replacing the natural materials being banned or restricted are derived from petrochemicals, and does not report on the possible toxicity of the synthetics.
  • Plays down the fact that the presence of many natural materials in perfumes is exponentially lower than the amounts sent into the environment by naturally growing plants.

And finally:

“The perfumers' workload of weekly customer briefs nowadays invariably contains requests for natural and sometimes even organic perfumes. The reality is, that there is no way that natural perfumes can be sold legally without labeling, or by going against IFRA Standards, and we have to face the fact that we are now firmly in the age of the synthetic perfume. This latter fact is such a truism that many senior perfumers have pointed out that this present generation of emerging perfumers are so unfamiliar with natural ingredients, that they are unable (through lack of training & familiarity) to craft 100% high-art natural perfumes.” [“Perfumers and the 40th IFRA Amendment,” by Cropwatch's Tony Burfield.]

Continues in Part II

Updated 30th September 2011 at 11:49 PM by JaimeB

The Fragrance Industry , The Art of Perfumery , Personal Reflections


  1. ROtto's Avatar
    Thanks for an interesting post. A small point: "Their combined sales volume in 2010 was $16.7225 trillion ..." can't be right. The combined GDP for the EU in 2010 was $16.242 trillion.
  2. JaimeB's Avatar
    Quote Originally Posted by ROtto
    Thanks for an interesting post. A small point: "Their combined sales volume in 2010 was $16.7225 trillion ..." can't be right. The combined GDP for the EU in 2010 was $16.242 trillion.
    The figure is for world-wide sales, which for the top ten, includes five non-European companies, two each in Japan and the United States, and one in Israel. I double-checked my source here, and I see that it refers to a total for the top ten of 16,722.5 million, which is 16.7225 billion... Sorry for the mistake; the info on the webpage is in rather small type, and I misread the figure as being in billions, rather than millions... I have corrected the entry in the blog post. Thanks for spotting the error!

    It may be worth noting that the companies cited sometimes are contracted to develop perfumes for the firms that introduce them to the market, but they also provide perfume materials to the larger houses that use their own perfumers. In any case, the retail value of the perfumes from the designer and niche houses that market them under their own labels is not included in the figures cited on the website I referenced. Those would show up under LVMH, Coty, and so on. Also, those figures would include considerable markups over the companies' costs for the value added in design (where done in-house, rather than by the likes of Symrise or IFF), manufacture, packaging, marketing, distribution, advertising, etc. The entire fragrance market is probably considerably larger than just the figure I cited.
    Updated 26th September 2011 at 06:49 AM by JaimeB


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