Armand de Villoutreys, President Perfumery Division, Firmenich

Premium Beauty News - In recent years, a strong trend has driven the growth of a demanding perfumery, which has been attracting perfume addicts, tired of big launches, and looking for exception and rarity. What is the impact of this trend on the market?

Armand de Villoutreys - We can observe an undeniable need for more intimate and personalized perfumes. The so-called "niche" perfumes enjoy high growth rates, but figures start from very low. For the moment, in terms of volume and market share, niche perfumery is - one might say "by definition" - marginal. Especially because it still has to cope with strong distribution issues.

In addition, the boundaries of this perfume category are now even more difficult to drawn since traditional brands have responded to niche brands by developing their own elitist strategy. They have launched their own intimate lines with market codes similar to those of small brands: standard bottles, highlight on the main ingredients and notes, restricted number of point of sales.

Today, this market is very crowded. To succeed brands must redouble differentiation efforts and have a very strong concept. For instance, a brand like Le Labo, has been successful in change the relation to perfumes by inviting consumers to smell their ingredients. Frederic Malle’s idea - to create a publishing house for perfumes and to highlight their creators - is also truly remarkable. We can also mention Jo Malone’s combinations, or By Kilian’s hyper luxury, without forgetting Diptyque who pioneered the segment and has celebrated its 50th anniversary.

But these niche brands have also demonstrated that a perfumery deeply rooted in the ingredients appeals to many consumers. More figurative than conceptual, these brands give value to raw materials, focus their creativity in the concentrate, rather than in the bottle or advertising. They helped restoring the quality of the concentrate, in which they invest a lot, and obviously it is something that we warmly welcome. Actually, I do think too many savings have been made at this level. For many years, we have faced briefs setting tight prices for concentrates, even though it coincided with a sharp rise in raw materials prices.

Premium Beauty News - More generally, the rhythm of major launches is apparently slowing down?

Armand de Villoutreys - Yes the number slightly slowed down and I personally consider it a good thing. We had reached a kind of craze that created a strong pressure on the brands’ budgets. The success of those who have slowed the pace, implementing the "fewer but bigger” principle, showed that another way is possible.

However, we must immediately temperate this observation because there are always so many flankers. Furthermore, if there is a real slowdown in the prestige segment, it is less marked for masstige and mass. Simultaneously, the market share of the luxury perfumes has been steadily declining globally due to the rise of emerging countries, including Brazil, which are rather masstige or mass.

Premium Beauty News - Precisely, how is the global market evolving?

Armand de Villoutreys - First of all, the global market was transformed by the explosion of the huge Brazilian market. After taking first place in volume a few years ago, the Brazilian fragrance market has recently overcome the United States first in value.

Also worth to note is the dynamism of the Middle Eastern market that represents a total of about 300 million consumers who are heavy perfume buyers. Besides, this market also has a great influence on the whole Muslim world, including countries such as Indonesia and Malaysia, for example.

In contrast, Asia - i.e. mainly China, Japan, and Korea - is not significantly taking off.

As far as our organization is concerned, we opened creative centres dedicated to fine fragrances in Sao Paulo and Dubai. We now have four of these units: in Paris, New York, Sao Paulo and Dubai. We formulate locally, in direct contact with the local population.

Finally, it should be noted that if our markets are highly globalized, it is also the case of our supplies. Today our ingredients are sourced from around the world, with a growing weight of central India. So far, we have eleven factories, nine of which are located in emerging markets.