IFF President Fine Fragrance Sabrya Meflah tells BW Confidential about what the company’s recent merger with DuPont Nutrition & Biosciences means for fine fragrance, her priorities for the business and how she sees the evolution of the market.
You became president of Fine Fragrance in December 2022, at the same time as IFF announced a new operating model following its merger with DuPont’s Nutrition & Biosciences business in 2021. What are your key priorities for the fine fragrance part of the business?
IFF’s fine fragrance identity and culture are deeply rooted, and preserving this heritage is our mission, as well as asserting its uniqueness. IFF is the only large American fragrance house in our industry. This is a unique trait, which we’re very proud of. We have significantly contributed to the to the creation of the American perfumery market, with milestones like Youth Dew or Beautiful from Estée Lauder or Red Door with Elizabeth Arden. This was the basis onto which we then expanded to Europe, where we went on to create major classics like Tresor from Lancôme or Paris from Yves Saint Laurent.
While we have undergone several managerial and structural changes at IFF, everyone is aligned on the importance of preserving our fine fragrance heritage and continuing to invest in the category.
Following the merger, fine fragrance is now a much smaller part of the overall business. Is there a risk of fine fragrance becoming diluted in this large corporation or losing focus for the company?
I understand why some people imagine that fine fragrance would be diluted in this new organization. In reality, it’s quite the opposite. As I said, everyone understands the importance of preserving our fine fragrance culture, pioneering American spirit, singularity and our lean and entrepreneurial approach. If you ask our customers, they will unanimously mention our agility and speed; this has not changed and will not change.
Fine fragrance is a priority and a flagship of our creativity and innovation for IFF both internally and externally, as it delivers on both value and growth; we are determined to invest in the category in the long term. The fact that fine fragrance is a part of a very large corporation today gives us the means to accelerate in many areas that would not have been possible in a smaller structure.
Importantly, fine fragrance is first and foremost about talent. If the most prestigious brands work with us, it is firstly thanks to our ability to create the fragrance signatures of tomorrow, which will be successful in the long term. This is what we did over the last 10 years with international blockbusters like La Vie est Belle from Lancôme, L’Interdit by Givenchy, or Invictus from Paco Rabanne for example.
We will continue to protect the skills that differentiate us from our competition, and enable us to create successful perfumes. To that end, creation and our perfumers are at the center of everything we do; this will remain.
The only thing that has changed, for the better, is that we now have a firepower that enables us to go even faster and further from a science, R&D and financial standpoint. Thanks to our recent merger, we will be able to accelerate our sustainability agenda. [This will include] providing circular feedstock for existing biodegradable ingredients with reduced environmental impact; creating exclusive and patented ingredients which address olfactive gaps, both for creative innovation and due to regulatory and biodegradability challenges; and also reducing petro-chemical dependence.
Today, our industry faces enormous pressures from a regulatory and environmental point of view, and if we are not able to develop the molecules of tomorrow, with reduced environmental impact, we will no longer be able to operate. Thanks to our merger with Dupont Nutrition & Biosciences, we now have integrated researchers within IFF working with our Scent R&D. This necessary transformation of our palette of molecules would be impossible without this integration of biosciences capabilities. In addition to transforming the palette for environmental reasons, we also need to continue to advance on creating molecules to create the perfumes of tomorrow.
It’s also important to mention our natural raw materials company, LMR Naturals, in Grasse. IFF acquired LMR in 2000, at the time when most of our competition had walked away from naturals; they have since followed suit. LMR has preserved its unique, agile operating model, while working hand-in-hand with our perfumers. Upon the acquisition, we made a conscious effort to ring-fence the LMR know-how, while giving it access to the IFF firepower – both financial and scientific. Let me take this opportunity also to pay a tribute to Monique Remy, the founder of LMR, who passed away on January 4, and who was an outstanding visionary with a profound impact on the perfume industry as a whole.
I understand why some people imagine that fine fragrance would be diluted in this new organization. In reality, it’s quite the opposite. Everyone understands the importance of preserving our fine fragrance culture. […] Fine fragrance is a priority and a flagship of our creativity and innovation for IFF both internally and externally, as it delivers on both value and growth; we are determined to invest in the category in the long term
IFF President Fine Fragrance Sabrya Meflah
Is it possible to have an agile, start-up mindset in such a large organization?
The short answer is: of course. It is even encouraged, as our priority is to maintain what we are doing well, and to grow even further what makes us different. I would say that the fact that we are diversified is an even stronger incentive to be clear on our mission.
To what extent do you see a softening of growth in the overall fragrance market?
Since Covid, the fine fragrance industry has seen very strong growth. There is renewed interest in fragrance, and consumers are re-purchasing. Our research shows that 80% of consumers consider that perfume is essential for them.
There is a genuine excitement for fine fragrance, with double-digit growth in markets such as the US and in France, even if there now seems to be some slowdown or stabilization, and there is a lot of talk about retailers destocking. However, there are different growth models from region to region. As an example, we’re seeing very strong growth in regions like the Middle East, Asia or Latin America. We will continue to invest in these high-growth markets.
How do you see the impact of increasing prices of fragrance for the end consumer and the premiumization trend on the market?
There are two different issues: The inflationary effect, where costs have increased, and the premiumization effect, where there is more quality in the bottle and in the scent and a return to luxury perfumery. Our research shows that consumers are ready to pay more for more quality, which is a trend we are seeing across many industries.
The niche market is one of the drivers of premiumization, and niche perfumes are often – though not always – completely original with legitimately higher prices due to the quality of what is in the bottle. This market continues to see double-digit growth with some brands seeing extraordinary growth.
China moves fast, and several local brands have already achieved leadership in skincare and cosmetics – I’m confident that the next step will be perfume. Many perfume brands in China have yet to be created, so we want to prepare for the future.
IFF President Fine Fragrance Sabrya Meflah
How do you see the pricing trends of raw materials. Has price inflation abated?
Raw materials price trends remain inflationary. However, this trend is family of ingredients- and sourcing-specific, with instances of ingredient prices sky-rocketing. The most impacted family of products are terpenes, derived from natural wood sources. While we do see some light at the end of the tunnel, we don’t believe we will be coming back to prior price points.
For natural ingredients, their plant to production cycles are generally very long – three years to grow a rose plant for rose oil production – this contributes to the inflationary pressure on many natural families of ingredients. We believe this trend is here to stay, driven by continued demand increase and other macro-economic factors.
Our integrated structure and our scale for both natural and synthetic families of ingredients gives us a competitive advantage to fend off part of the increase.
There are growing concerns over the risks of doing business China. How do you see the potential of China for fragrance?
We strongly believe in the continued growth potential of China, even if it has been complicated recently for certain international brands, which have encountered some setbacks. But I see two different types of brands in China: The international and the local brands. Today, local brands are still small and few. However, China moves fast, and several local brands have already achieved leadership in skincare and cosmetics – I’m confident that the next step will be perfume. Many perfume brands in China have yet to be created, so we want to prepare for the future. As a result, we are investing in the region and we will open a new large creative center in Shanghai in July, with a whole section entirely dedicated to fine fragrance.
How do you see the development of the market in India? Is this a priority for you?
We are interested in India, and we are present in the region. We want to do things well, and when we invest we want to do so in an impactful way. We are carefully following the evolution of the Indian fine fragrance market, which is promising for the future, but not mature yet.
How do you see the progress of IFF and the industry as a whole when it comes to sustainability?
Sustainability is a very big topic. As I mentioned earlier, we now have a sizeable advantage when it comes to biotech as a result of the merger, which is important given the regulatory and sustainability pressures to replace ingredients.
Supporting sustainable transition can be done in many different ways. The perfume industry is extremely regulated and protective of consumers’ health. That is why we need to be vigilant and defend our ingredients when regulatory pressure becomes excessive. Some fragrances are genuine masterpieces and some of them could purely and simply disappear because of that pressure.
The perfume industry has already made progress on minimizing scent’s environmental footprint. At IFF, our Life Cycle assessment tool allows us to calculate the environmental footprint of each of our ingredients, and therefore formulas. Our industry has also been leveraging green chemistry for years, and we discussed biosciences. As we speak, we are studying several other technologies that will allow us to be greener– for example, create fragrances with extremely powerful ingredients, so we use less of them. We’re building the future today, with diverse research platforms. It is the combination of all them that is important in this transformation, which we’re aiming to achieve while preserving the perfume masterpieces that exist today.