Imogen Matthews, Consultant05.01.17
Despite a flood of new launches, exciting new ingredient concepts and strategic marketing to attract new consumers, sales of European men’s and women’s fragrances fell flat last year. However, artisan/niche fragrances gained visibility and sales by attracting the attention of both consumers and the multinationals eager to buy promising brands.
According to Euromonitor International, the men’s and women’s fragrance market in Western Europe rose just 0.9% last year to reach $13.6 billion. But some regions performed better than others; Eastern European fragrance sales actually slipped 0.7% to about $3.1 billion. Premium fragrances are a far more developed market in Western Europe, accounting for 65% of total sales, compared to 39% of sales in Eastern Europe. The power of premium is due, in part, to the dominance of the French perfumery market as well as high sales of premium fragrance in the UK and Germany. Yet, new product development data for premium fragrances in Europe shows a drop in sales volume in France, just a 1% increase in the UK and Italy, but a healthier increase of 6% in Spain.
It is evident from Kantar Worldpanel’s usage data that many European women are fragrance lovers, especially the Spanish, with 72% of them using fragrance. This compares to 68% of Polish, 64% of French, 54% of German, 51% of UK and 50% of Italian women. This passion for fragrance puts Europe ahead of the US, where only 28% of women claim to use fragrance.
A similar picture emerges among European men, although penetration is lower at 62% of Spanish, 60% of Polish, 45% of Italian and 42% of French, 42% of German and just 28% of UK men using fragrance. Penetration levels are also higher than the US, where just 22% of men use fragrance.
Acquisitions & Niche Brands
Shared fragrances are a growing phenomenon within the market and the number of new launches have overtaken feminine fragrance launches in the past year. According to Fragrances of the World, there were 923 new shared fragrances in 2016, compared to 836 women’s fragrances.
The majority of these shared fragrances are niche/artisanal brands, many of them from perfumers whose focus is primarily on smell and quality of the ingredients and accords, rather than whether it should be worn by a man or a woman. Examples of these scents include Byredo, which sells its scents in minimalist bottles stamped with black and white labels bearing names such as 1996 and Bibliotheque. However, the impact of so many new shared fragrance launches has yet to lift the top line, as the fragrance market is still strongly delineated between men’s and women’s products, reflecting the strategy of most mainstream fragrance brands to fit more easily into retailers’ merchandising of the category.
Without doubt, niche businesses, especially French perfumery brands, are an attractive proposition to so many of the multinationals that are eager to find new avenues for growth. Their quest for growth has resulted in several changing hands in the past year. Estée Lauder Companies has brought Frédéric Malle, By Kilian, and Le Labo into the fold. L’Oréal has acquired Ateliers Cologne, Puig now owns Artisan Parfumeur and LVMH has recently inked a deal to acquire a majority stake in Maison Francis Kurkdijan.
All of these niche businesses bring a level of creativity that had been missing among big global brands. Estée Lauder executives have been quoted as saying that they intend to learn from their acquired brands with a view to applying these entrepreneurial strategies to existing fragrance brands.
As many niche brands sell fragrance collections based around a theme, the industry can expect to see many more launches of this kind.
Impact of Millennials
Millennial women, aged 18-35, are a key target for the fragrance industry.
“Coming of age in the shadow of the 2008 recession…these internet-savvy beauty buyers consult online forums for reviews, product comparisons and discounts before making final purchase,” observed Eleanor Dwyer, research analyst, Euromonitor International.
She said that many Millennials are disillusioned with mass-oriented fragrances that sacrifice product quality for advertising budgets and are more likely to be attracted to off-stream brands with authentic origins and premium ingredients. It could also explain why sugary sweet celebrity fragrances have lost their shine to make way for premium fragrance brands with identifiable, often simple, scents. Dwyer cites the fashion brand Maison Margiela as one that she believes appeals to Millennials’ predilection for storied fragrances with its Replica line of scents, and features names such as Beach Walk and Jazz Club, which are designed to evoke particular settings.
Another is The Perfumer’s Story, a range of character-driven fragrances created by renowned British perfumer Azzi Glasser.
New Ways with Raws
Niche brands are pushing the boundaries when it comes to the combining and use of specific ingredients. IFF, a leading perfume ingredient supplier, has identified three key trends in the reworking of ingredients:
Meanwhile, oud has become a major trend in western perfumery, with whole oud collections launching such as Tom Ford Oud Collection and plenty of oud flankers, including Gucci Oud, Yves Saint Laurent Splendid Wood, Lancôme’s L’Autre Oud and others.
With so many brands competing for the consumer’s attention, fragrance brands must work much harder to boost European sales. At present, it seems that niche brands have the upper hand and are producing the most original perfume creations, but they are restricted by their size and lack of distribution. More acquisitions by multinationals could well hold the key to the category’s future growth.
Imogen Matthews
Headington, Oxford UK
Tel: +44 1865 764918
Imogen Matthews is a respected consultant, journalist and researcher focusing on trends in the beauty industry. She regularly contributes to many of the world’s foremost beauty trade titles. Every year in April, she publishes The Premium Market Report, focusing on trends in the UK premium beauty markets.
www.thepremiummarketreport.com
According to Euromonitor International, the men’s and women’s fragrance market in Western Europe rose just 0.9% last year to reach $13.6 billion. But some regions performed better than others; Eastern European fragrance sales actually slipped 0.7% to about $3.1 billion. Premium fragrances are a far more developed market in Western Europe, accounting for 65% of total sales, compared to 39% of sales in Eastern Europe. The power of premium is due, in part, to the dominance of the French perfumery market as well as high sales of premium fragrance in the UK and Germany. Yet, new product development data for premium fragrances in Europe shows a drop in sales volume in France, just a 1% increase in the UK and Italy, but a healthier increase of 6% in Spain.
It is evident from Kantar Worldpanel’s usage data that many European women are fragrance lovers, especially the Spanish, with 72% of them using fragrance. This compares to 68% of Polish, 64% of French, 54% of German, 51% of UK and 50% of Italian women. This passion for fragrance puts Europe ahead of the US, where only 28% of women claim to use fragrance.
A similar picture emerges among European men, although penetration is lower at 62% of Spanish, 60% of Polish, 45% of Italian and 42% of French, 42% of German and just 28% of UK men using fragrance. Penetration levels are also higher than the US, where just 22% of men use fragrance.
Acquisitions & Niche Brands
Shared fragrances are a growing phenomenon within the market and the number of new launches have overtaken feminine fragrance launches in the past year. According to Fragrances of the World, there were 923 new shared fragrances in 2016, compared to 836 women’s fragrances.
The majority of these shared fragrances are niche/artisanal brands, many of them from perfumers whose focus is primarily on smell and quality of the ingredients and accords, rather than whether it should be worn by a man or a woman. Examples of these scents include Byredo, which sells its scents in minimalist bottles stamped with black and white labels bearing names such as 1996 and Bibliotheque. However, the impact of so many new shared fragrance launches has yet to lift the top line, as the fragrance market is still strongly delineated between men’s and women’s products, reflecting the strategy of most mainstream fragrance brands to fit more easily into retailers’ merchandising of the category.
Without doubt, niche businesses, especially French perfumery brands, are an attractive proposition to so many of the multinationals that are eager to find new avenues for growth. Their quest for growth has resulted in several changing hands in the past year. Estée Lauder Companies has brought Frédéric Malle, By Kilian, and Le Labo into the fold. L’Oréal has acquired Ateliers Cologne, Puig now owns Artisan Parfumeur and LVMH has recently inked a deal to acquire a majority stake in Maison Francis Kurkdijan.
All of these niche businesses bring a level of creativity that had been missing among big global brands. Estée Lauder executives have been quoted as saying that they intend to learn from their acquired brands with a view to applying these entrepreneurial strategies to existing fragrance brands.
As many niche brands sell fragrance collections based around a theme, the industry can expect to see many more launches of this kind.
Impact of Millennials
Millennial women, aged 18-35, are a key target for the fragrance industry.
“Coming of age in the shadow of the 2008 recession…these internet-savvy beauty buyers consult online forums for reviews, product comparisons and discounts before making final purchase,” observed Eleanor Dwyer, research analyst, Euromonitor International.
She said that many Millennials are disillusioned with mass-oriented fragrances that sacrifice product quality for advertising budgets and are more likely to be attracted to off-stream brands with authentic origins and premium ingredients. It could also explain why sugary sweet celebrity fragrances have lost their shine to make way for premium fragrance brands with identifiable, often simple, scents. Dwyer cites the fashion brand Maison Margiela as one that she believes appeals to Millennials’ predilection for storied fragrances with its Replica line of scents, and features names such as Beach Walk and Jazz Club, which are designed to evoke particular settings.
Another is The Perfumer’s Story, a range of character-driven fragrances created by renowned British perfumer Azzi Glasser.
New Ways with Raws
Niche brands are pushing the boundaries when it comes to the combining and use of specific ingredients. IFF, a leading perfume ingredient supplier, has identified three key trends in the reworking of ingredients:
- Edible, gourmand notes have long been used in fragrance and keep being reinvented. The latest taste sensations range from sweet to salty, spicy to bitter.
- The quest for new freshness has led to a greater focus on fresher constructions, such as colognes, light florals and aqueous-ozonic facets. The new challenge is to make freshness long-lasting.
- Woods are becoming more popular in both men’s and women’s fragrance and the newest renditions have been treated to impart elegance, sensuality and character.
Meanwhile, oud has become a major trend in western perfumery, with whole oud collections launching such as Tom Ford Oud Collection and plenty of oud flankers, including Gucci Oud, Yves Saint Laurent Splendid Wood, Lancôme’s L’Autre Oud and others.
With so many brands competing for the consumer’s attention, fragrance brands must work much harder to boost European sales. At present, it seems that niche brands have the upper hand and are producing the most original perfume creations, but they are restricted by their size and lack of distribution. More acquisitions by multinationals could well hold the key to the category’s future growth.
Imogen Matthews
Headington, Oxford UK
Tel: +44 1865 764918
Imogen Matthews is a respected consultant, journalist and researcher focusing on trends in the beauty industry. She regularly contributes to many of the world’s foremost beauty trade titles. Every year in April, she publishes The Premium Market Report, focusing on trends in the UK premium beauty markets.
www.thepremiummarketreport.com
