Survival or Revival?

November 9, 2009

Still reeling from a disastrous 2008 holiday season and plummeting sales through the first half of 2009, fine fragrance marketers hope autumn launches and holiday promotions provide some much needed relief.

Survival or Revival?

Still reeling from a disastrous 2008 holiday season and plummeting sales through the first half of 2009, fine fragrance marketers hope autumn launches and holiday promotions provide some much needed relief.

Christine Esposito
Associate Editor

After an awful 2008 holiday season and further decline in the first half of 2009, fine fragrance sales, to put it bluntly, stink.

Josie Natori’s Natori, a scent from Parlux, is a new floral oriental with notes of rose, plum, ylang ylang, peony, jasmine, patchouli, amber and musk.
“The first half of 2009 was ‘the end of the world’ and the fragrance market had a very difficult time achieving sales, particularly as retailers discounted the price of products,” said Toon van Beeck, senior industry analyst with IBISWorld Inc., Jersey City, NJ. “Mother’s Day and Valentine’s Day usually see large spikes in fragrance sales, but this was less so for 2009.”

According to NPD Group., Inc, Port Washington, NY, prestige fragrance sales in the U.S. plummeted 10% versus first half 2008.On the mass side, IRI reported that men’s sales fell more than 6% and women’s fragrances declined nearly 4% for the 52 weeks ended Sept. 13 (See chart below).

With numbers like that, industry executives are hoping Fall 2009 launches and absolutely critical holiday promotions will generate excitement among recession-rocked consumers and provide some much needed relief. But will it be enough?

“The hard part is, we don’t know,” said NPD global beauty industry analyst Karen Grant. “One would hope that because fragrances declined by as much 10% last holiday, we hope to see flat this season. But that is hard to tell.”

Some surveys suggest consumers might be more interested in purchasing fragrances this holiday season. According to NPD’s recently released annual survey of consumers’ holiday spending intentions, while more respondents said they plan to spend less on holiday purchases, fragrances moved up one spot to ninth place in NPD’s list of the top 10 items consumers plan to buy as a gift.

And the Fragrance Foundation will trumpet the cause—although it will come after the critical holiday period—by launching a new multi-media initiative created “to entice consumers back to the pleasures of fragrance.”

The “One Drop Changes Everything” campaign goal is to entice the 62 million consumers who already use fragrance sometimes to spritz or splash more often.

Rochelle Bloom, president of the New York City-based group, likened One Drop’s potential to the “Got Milk?” campaign, which debuted 16 years ago and is credited with boosting milk consumption.Increasing sales as little as 2-5% would have a significant impact on the total category, Ms. Bloom noted. New York City ad and design firm Yard was tapped to create the campaign, which will bow in January, just in time for Valentine’s Day.

It’s a Man’s World

Despite all the gloomy news during the past several months, there have been some bright spots in the fine fragrance market, one of them being the men’s prestige sector.

“The men’s market has seen a surge in demand in the past three years—the result of changing male grooming patterns, in which the average man now spends more time [grooming] and a larger portion of his income on shaving products and toiletries,” noted Mr. van Beeck.

According to NPD, new men’s launch activity was up 23% in the first half of the year compared to women’s new launches, which fell 31% compared to 2008. Within the prestige space, three of the top 10 scents through the first half of 2009 were men’s fragrances, NPD reported.

Avon’s Patrick Dempsey 2, which bows this month, is an Oriental spicy fragrance and the direct marketers second scent with the actor.
Parfums Givenchy has made a high-profile return to men’s fragrance with Play, a new scent that hit U.S. counters in September featuring Justin Timberlake as the face of the ad campaign. The Play EDT opens with a top notes of bergamot and citrus, and dries down to a woody finish of vetiver and patchouli, while an accompanying eau de toilette intense swaps the citrus notes for the lingering scent of tonka bean. Both varieties share a mutual middle note of amyris wood (similar to the scent of sandalwood and cedar) and were created by Emilie Coppermann and Lucas Sieuzac of Symrise Paris under the direction of Parfum Givenchy’s Françoise Donche. Bottles were designed by sculptor Serge Mansau to resemble an MP3 player.

A Second Act for Patrick Dempsey

It is Dr. McDreamy redux as Avon rolls out the second scent from actor Patrick Dempsey. Patrick Dempsey 2, which bows this month, is an Oriental spicy fragrance with top notes of saffron, mandarin and nutmeg; middle notes of spiced wood accord, green fig and cistus and base notes of olibanum, patchouli, guaiacwood and skin musk accord. The Firmenich-created juice is housed in a brown glass bottle with a hint of green that is shaped to reflect strength and intimacy. In addition to the Patrick Dempsey 2 EDT, Avon is adding ancillaries to the actor’s line, with face wash, shave gel and moisturizer with SPF 15 available in December.

Like Givenchy and Avon, P&G is also tapping into the celebrity world with its mass market Tag line. The new Tag Signature Series, a collaboration with hip-hop artist Chris “Ludacris” Bridges, NBA star Carmelo Anthony and professional skateboarder/MTV personality Rob Dyrdek, includes three body sprays—Get Yours, Stay Up and Make Moves—with “cologne quality” scents.

Coty’s limited edition DaisyMarc Jacobs solid fragrance pendant.
Celebrities and sports stars resonate with men, but so do hip designers. Fragrances houses continue to rely on style gurus to bring men to their counters. Making his debut in the men’s fragrance market is designer Marc Ecko, who has created an aromatic fougere with Parlux. Ecko’s juice has notes of spice and citrus, including chilled ginger, white grapefruit, absinthe, white incense, musk and violet leaves. The scent is housed in a sheer glass that is nearly split in two, topped with angular metal.

Another fashion-forward line, Rocawear, has expanded its fragrance stable with X, a limited edition scent that commemorates the brand’s 10th anniversary. A follow-up to 9IX Rocawear, this new scent—pronounced ten—has top notes of lapsang souchong (made of rare black tea leaves from Asia) and eucalyptus on a woody bottom. Accords include Himalayan goji berries, pomelo, lime, black amber, guaiac, cedarwood and musk. EDTs are housed in a rectangular brushed silver bottle that resembles that of 9IX Rocawear’s flacon, which garnered a 2009 FIFI award for Best Packaging of the Year.

Creative packaging—be it finely crafted or kitschy—and a wider array of sizes and delivery methods are being enlisted to catch the attention of fragrance neophytes and cashed-strapped consumers.

“Novel or unique packaging and flacconage is also a great lure for first-time consumers who are struggling with the sheer mass of choices,” noted Marian Bendeth, a global fragrance expert and owner of Sixth Scents, a Toronto-based consultancy.

Real Hero SKUs: The American Line

While celebrities remain big draws in the fine fragrance market, Parfumologie has created fragrances inspired by true heros—the U.S. military. The American Line is a new collection of officially licensed fragrances from which a portion of the proceeds will be donated to military-related non-profit organizations.

Scents, all of which are for men, include Stealth (Air Force), a blend of marine and ozonic accords accented by citrus and warm musk; Liberty (Navy), billed as a platform of aquatic notes and with supporting accords of cucumber, aloe, melon, moss and musks; Patton (Army), a scent in which nutty coconut peeks out from behind a citrus opening of bergamot and lime and evolves into a sweetly woody finish with cedar, sage and hints of tonka bean; Devil Dog (Marines), which marries the rich, earthiness of agarwood, sandalwood and cedar with the juicy coolness of citrus and chilly mint accords; and Riptide (Coast Guard), a blend of citrus, herbals, woody accords and a hint of spice. Each 100ml cologne is $45.

A company spokesperson said women’s scents are in development.

More info: www.theamericanline.org
“New scents that have done well are those that have used innovation in packaging design or size. Those that are resonating tend to have a bit more novelty or point of difference or even olfactory difference,” added Ms. Grant, pointing to Harajuku Lovers, Juicy Couture Couture Couture, Ed Hardy and Sensuous as examples.

Another scent that generated excitement for its stellar packaging was Daisy Marc Jacobs. This Fall, Coty is taking it up a notch with the new limited run Daisy Marc Jacobs Silver edition. Drawing inspiration from the luxe details that are the designer’s signature, Daisy Silver comes in a brightly polished silver hued bottle topped with a rounded gold cap that is adorned with metallic gold daisies and silver accents. Daisy Silver edition features the same concentrated rich notes as the eau de parfum. Further, Coty is offering Daisy in two new formats: a solid perfume pendant and an EDT in rollerball packaging.

Not one to rest on his laurels, Mr. Jacobs has set out again to capture consumers’ attention with Lola, a new warm floral. The juice from Givaudan—which features notes of pink peppercorn, pear d’ anjou, ruby red grapefruit, fuchsia peony, rose, geranium, vanilla, tonka bean and creamy musk—is housed in packaging that is sure to garner attention. It features a subtly faceted glass bottle in rich violet accented with a gold coil on the wrapper. Lola has a further twist—the 100ml bottle has an exaggerated, curvier silhouette, while the 50ml has a more slender presence, according to the company.

Size matters in the fragrance market today, and as such more companies are adding more options—even Chanel is now offering a refillable EDT of what is considered one of the world’s most famous fragrances—No. 5.

While packaging can pique interest, it’s the juice that seals the deal.

“Ultimately fragrances that are well blended and possess tenacity and individuality are holding their own,” noted Ms. Bendeth.

Niche fragrance house Bond No. 9 this month unveils Bond No. 9 Perfume, which is a 30% concentration. The olfactory profile contains just four East/West ingredients—the fewest of any of the company’s fragrances—oudextract, rose, tonka beans and musk.

La Prairie, another luxury player, has unveiled Life Threads, a trilogy of fragrances. Life Threads: Silver is a floral wood scent that opens with green leaves and golden bergamot. The heat features tuberose, pimento, Indian jasmine, orange blossom and ylang ylang. The dry down includes sandalwood, cherished vetiver, solar musk and peppery moss. Life Threads: Gold is a spicy oriental with top notes of tangerine, Chinese plum and clove bud with a heart of exotic pepper, Kyoto rose, cinnamon bark, coriander, lily of the valley and ylang ylang. It has a dry down of cedarwood, patchouli, golden myrrh, vanilla and imperial incense. Rounding out the collection is Life Threads: Platinum. This chypre floral opens with violet leaf, galbanum and rich plum with a heart of crystal jasmine petals, crushed Persian rose, leather, Kerala cardamom and iris with a dry down of Indonesian patchouli, vetiver, golden amber, oakmoss and labdanum.

Autumn’s Florals

A number of new scents have hit counters in recent weeks, including a crop of floral-focused fragrances from leading firms like Elizabeth Arden, Parlux and Beaute Prestige International.

Mariah Carey has again partnered with Elizabeth Arden to create Forever, a new opulent floral fragrance housed in an art deco inspired bottle. Forever, which was created with Olivier Gillotin of Givaudan, opens with a unique burst of fresh watery nuances. The floral heart reveals tuberose and gardenia while the dry down features exotic woods and white musk.

In addition to Forever, Arden has added Britney Spears’ Circus, a scent inspired by the pop star’s latest album and concert tour. Circus features fruits, florals and musks, with top notes of sugar-coated raspberry and apricot blossom, a heart of blue peony, water lily and sweetheart orchid and a base of sweet vanilla wood, creamy musks and violet candy, according to the company.

Josie Natori’s Natori, a scent from Parlux, is another early autumn entry. Created with Caroline Sabas of Givaudan, Natori is a sparkling, floral oriental with top notes of sparkling aldehydes, rose petals and dark plum. The heart—ylang ylang, purple peony and night blooming jasmine—sits upon a dry down of black patchouli, amber and satin musk accord. The scent’s debut at Saks Exclusive was timed to coincide with a special program in which Fifth Avenue Club members received a deluxe quarter-ounce eau de parfum miniature in limited edition packaging.

Issey Miyake and Beaute Prestige International are also part of this Fall’s floral brigade with “a scent by issey miyake.” Created in collaboration with perfumer Daphne Bugey of Firmenich, the women’s scent features fresh notes of hyacinth and galbanum setting the fragrance’s green/floral, tone, enlivened by hints of verbena and jasmine. Working with bottle designer Arik Levy, the flacon’s design suggests that the bottle is sliced, depending on the desired size, from a single, continuous block of light-filled glass.

The venerable eau de parfum of Chloé is getting a boost with a new eau de parfum Intense crafted by perfumers at Robertet. The juice features rose, a signature of the original, as well as notes of sparkling pink pepper, sandalwood and tonka bean. Its elegant bottle is bedecked with silver and a natural petal beige, ivory or deep gray ribbon, according to Coty.

Another iconic name in beauty, Helena Rubinstein, is making a return to fine fragrance with a woody floral scent due out this month. Wanted, which features notes of ylang-ylang, magnolia and iris, is the company’s first new scent in more than a quarter of a century.

What’s Next…Now

Looking to create excitement with consumers, fragrance houses continue to announce their newest signings and perfume plans for 2010 and beyond, which provides fodder for fragrance fanatics and a chance to whet the appetite of casual users.

“Blogging and websites have taken up a huge percentage of what was once the media’s work. Certain bloggers, websites and Twitterers are racing against each other and the fragrance houses to release the names of scents that are not launched,” noted Ms. Bendeth. While she suggested this can be somewhat problematic for global launches, there are some benefits to early buzz.

“By discussing, researching and reporting on new and existing fragrances on the internet, there can be wider ramification on the exposure of a SKU,” Ms. Bendeth added.

Looking ahead are some notable projects in the pipeline. Coty, for starters, has entered into a license agreement with Guess?, Inc., to develop and market new Guess fragrance lines—and the deal includes distribution of existing Guess fragrances, effective January 2010.Coty, which is taking over the license from Parlux, plans to expand the reach of the brand and bring it to the “forefront of the global fragrance market,” according to Paul Marciano, vice chairman and chief executive officer.

But, alas, Inter Parfums hasn’t lost its footing; it has inked a 12-year worldwide license agreement with highly coveted designer Jimmy Choo—effective Jan. 1, 2010—for the creation, development and distribution of fragrances.

“This relationship with Jimmy Choo offers a perfect fit with our strategy of expanding our brand portfolio to include new universes and represents an important milestone in the company’s development. This brand possesses the quintessential qualities to ensure the ambitious development of fragrance lines that will be supported by significant advertising commitments over the coming years,” noted Jean Madar, chairman and chief executive officer of Inter Parfums, Inc.

And there is more to come—Parlux is working on a new scent with Rihanna (due out in Spring 2010) via an agreement with Iconic Fragrances, LLC, which also provides the company with worldwide licenses for fragrances from Kanye West and Shawn Jay-Z Carter.

Other scents in production stages include Avon and pop star Fergie; Coty is readying its next fragrance with Sarah Jessica Parker, which ties into the “Sex and the City” sequel, as well as an exclusive scent with Beyonce; BPI has inked a 10-year licensing agreement with designer Elie Saab; knock-scent marketer LMS is launching its first original, signature scent; Halston and Elizabeth Arden are revamping Pure Metallic; and a Kim Kardashian is working on a scent with Lighthouse Beauty due out in February, just to name a few.

Holiday Boom or Bust?

As the market heads toward the “most wonderful time of the year,” the stakes are even higher for fragrance marketers looking to make up lost ground or at the very least keep their heads above water.

“Going into the holiday period, that last month affects the entire year,” said Ms Grant of NPD. “It is a critical time period; everyone has to be out and on their A game.”