Premium Beauty News - What are your observations on the perfume market right now?
Alexandrine Demachy - Even if, from an economic standpoint, China and Brazil are slowing down in growth, what can be noted is that brands have been adapting to these markets, whether on a structural level or with their product offer. Large groups have been streamlining their structures in Europe to grow in emerging countries. They develop specific products there, or buy local brands to establish themselves firmly in these regions. There has been a new diversification in many fields on the global scale. Several models work well, there is no longer only one approach possible, and that is why the largest groups are starting to take interest in smaller ones.
Premium Beauty News - Absolutely, and many alternative brands have recently been purchased by large groups. What conclusions should be drawn, then?
Alexandrine Demachy - This is a very different philosophy in terms of acquisition. It is all about recognizing an expertise here. Companies seek to take these structures as a model, from their modes of creation down to their means of distribution, which are very close to consumers. And this has consequences on us creators. In the selective segment, the olfactory dimension only represents about 5% of the value of the product sold, the remaining part being related to marketing, communication, packaging, etc. The ratio is reversed in alternative perfumery. Differentiation is achieved through creativity, the selection of raw materials, and the price. We have to adapt to this new trend, because it is favourable to us. Our short and light structure makes it possible for Fragrance Resources to achieve this.
Premium Beauty News - In light of this new order, could this lead to rethinking the method of remuneration of perfume composition companies, which today is only based on the volume, and not on creation?
Alexandrine Demachy - This is a recurring question. It is true the whole creation process is completely free, regardless of the call for tenders. This specificity is to be taken into account, because contrary to architects or advertising companies, we have to cover the development costs related to projects that have not been acquired yet. But brands feel attached to them, and even if there were a will to change things, there would have to be a consensus.
Premium Beauty News - You were talking about China, although it is a region where the perfume sector has hardly developed yet. Do you still believe in it?
Alexandrine Demachy - Sure, Asia will eventually reveal itself, and the relationship with perfumes will change. In China, perfumes are currently viewed as products that help gain recognition, gift-products for those who want to bring out their comfortable status. But Chinese people travel more and more and are learning a lot about the Western world, so they will end up using perfumes for themselves. But this will take time.
Premium Beauty News - There seem to be many growth drivers. Is the future of perfumery all mapped out?
Alexandrine Demachy - Perfumes will always be a mode of seduction. As long as there is love, there will be perfumes, and I am confident about their future. However, there will be a huge upheaval on all axes. It is true, any lever is possible: creation, distribution, regionalization, mode of scenting… everyone is already positioning themselves. So one has to ask the right questions: how to attract young people, how to make European consumers take interest again, how to deal with the sourcing problem when our planet increasingly has to produce more to feed itself… We must build the future.