"How Climate Change is Threatening the Multi-billion Dollar Fragrance Industry"
Perfumes have been a beloved part of human culture for over 4000 years. It all started when the Mesopotamians first extracted fragrances. Since then, the obsession with perfumes has only grown, resulting in a booming industry that generates billions of dollars in revenue every year. The fragrance market has expanded beyond just the making of perfume bottles, with the global market generating approximately USD 51 billion in 2021. According to some estimates, this revenue is expected to surpass USD 66 billion by 2026. Despite this promising growth, the industry faces a significant challenge – climate change. Our over-reliance on nature may lead to the extinction of one of the oldest industries in the world. Climate change is one of the most significant threats faced by humanity today, and we must take responsibility for creating it.
Beauty and fashion is a big business. Industry sources states that in 2022 alone cosmetics market worldwide generated a revenue of around USD 93 bn. Large fashion houses over the time transformed into multi national entities producing a whole range of luxury goods from apparels, clothes, accessories, cosmetics etc. One such component of luxury goods is Perfume. Top fashion brands like Dior or Versace have their own range of perfumes sold at a ultra-high premium. It’s not a product you are paying for, but it’s the brand that commands the cost . Perfumes are made of all known fragrances derived from nature. These can be pure extracts of rose or jasmine or it can be blends of flowers, spices, herbs, fruits, nuts etc. High net customers do not hesitate paying a fortune more just to lay their hands on a limited edition perfume made by Chanel or Gucci to name a few. You may be surprised to know it does not cost much to manufacture these perfumes as compared to its price but the marketing does pushes the cost higher. Advertising & brand associations makes it all the more expensive. Companies spend fortune on marketing campaigns of these fragrances and to lure the customers into buying it. Some of the perfumes are positioned as crème de la crème product aspired by many but bought by less than a one percent of the society.
Surprisingly, the Covid pandemic did not hinder the growth of this major component of luxury industry. Estimates suggest the pandemic actually pushed the perfume sales upwards. Take an example of Interparfums, a large French perfume company present in over 110 countries worldwide has witnessed magnanimous revenue growth. In 2019 its sales grew decently by 23 percent, the year 2020 saw a whopping 50 percent growth in sales. For the full year 2022, its net sales rose to $1.087 billion, up 24% from the $880 million in 2021. It only shows during these stressful times, consumers interest in health and wellness products increased and the results were positive for perfume industry. Similarly, Switzerland based Givaudan a 127-year-old company in business of fragrance, posted a collective revenue of $7.3 billion in the year 2022, up from $ 6.7 billion in 2021 & $ 6.2 billion in 2020.
Effects of Climate Change on Perfume Industry
Fragrance or perfume making business is largely dependent on nature and environment. Natural Perfumes are mostly a product derived by extracting oils from natural raw materials that are then combined to produce a pleasant smell by spreading its molecules in the air. These raw materials could be flowers, spices, fruits, herbs, or tree barks. Since they are derived from botanical sources, their fragrance is totally natural & pure. It smells light and refreshing for our neural senses.
Regions like Grasse in France faced severe drought situations recently forcing the farmers there to cut down heavily on usage of water and use alternative methods like drip irrigation for growing flowers. Grasse is not an isolated case, rather many such prominent regions producing good quality raw material for the perfume industry are experiencing shifting seasons, frequent extremes of frost, uneven rain, hail, and rising temperatures. All this is affecting crop yields, quality, and even the quantity of a scent that various plants produce. With such continuing calamities impacting the industry that functions on delicate balances dependent on nature, everything about how fragrances are made may need to be revised.
Luxury brands like Chanel, Versace, Montblanc or Dolce & Gabbana are known for their consistent quality. Being able to be consistent is a challenge and achieving it is not an easy. It is done through a dedicated mechanism employed by such large corporations. Everything including quality of soil, organic methods, climatic conditions, ph and brix levels, fragrance, yield, storage etc. is checked until harvest. No doubt companies rely heavily on environmental factors for quality produce year after year. Unfortunately, such regions are less around the world and therefore perfume makers can ill afford to have any calamity striking these regions no matter how big or small it may be. Although, option of synthetic scents produced through artificial methods would continue to keep their presence in the market, it should not be allowed to grow at the expense of natural fragrances produced carefully through a delicate process. On a ending note let us make a resolution to restore our planet to its original self by committing to fight global warming and adopt necessary changes in our lifestyle.
5 broad solutions to reduce ill effects of climate change.
- Clean air: Reduce greenhouse gas emissions and working towards carbon free surroundings by using less fossil fuels.
- Energy: Using alternative means of energy like solar, wind, biomass or geothermal.
- Reforestation: Planting more trees, conserving natural habitats and protecting forest.
- Waste Management: Reducing waste and e-waste through recycling, composting and lowering the use of plastic bags. Waste disposal produces methane, a harmful greenhouse gas that needs to be avoided.
- Public Awareness: Educating children and public at large about ill effects of climate change and steps to be taken to reduce it.
Some of the most popular perfumes ever made
Chanel No. 5
Launched in 1921 by French fashion house Chanel, this fragrance has become an iconic scent and is considered a timeless classic.
Joy by Jean Patou
Created in 1930, Joy is known for its floral scent and has been a popular fragrance for decades.
Opium by Yves Saint Laurent
Introduced in 1977, Opium is a spicy and oriental fragrance that has gained a loyal following over the years.
Angel by Thierry Mugler
Released in 1992, Angel is a sweet and fruity scent that has become a popular fragrance for women.
CK One by Calvin Klein
Launched in 1994, CK One was one of the first unisex fragrances and has become a popular scent for both men and women.