A fresh start for fragrance: fragrance sales fell last year in both mass and class, but industry experts insist things are looking up.

IT'S DIFFICULT TO FIND the silver lining in last year's fragrance results. Fragrance vendors were forced to see the glass as half-full following disappointing holiday sales last year. The terrorist attacks coupled with a soft economy made for a subdued holiday 2001 season.

That's the bad news: According to fragrance marketers contacted by Happi, things are looking up for 2002. Industry experts insist that a massive communal effort to pamper self and family is helping individuals to overcome tragedy and regain the confidence to begin living their lives again. Consumers are reaching toward the new and novel once again, albeit with more caution than in the past.

Past Imperfect 

Fragrance sales predictions made at the beginning of 2001 had initially shown a positive spin. By July, the prestige sector was reporting modest but measurable growth, according to Port Washington, NY-based NPD Beauty-Trends. Men's fine fragrance sales rose 1% during that time, while women's prestige grew 4%.

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Mass fragrance sales were less impressive, with men's shaving lotion, colognes and talcs falling 1.4% and women's perfumes and colognes dipping 3% during the early part of the year, according to Information Resources Inc. (IRI), Chicago. However, industry experts optimistically envisioned a slow rebuilding of consumer spending despite the flagging economy.

Then came the fall, and a complete readjustment of the consumer mindset as individuals placed emphasis on what was really important--home and family--and scaled back on frivolous spending even more than before.

Though a tightening of one's budget is a natural reaction to such serious events, the economy tends to suffer yet further when consumers stop spending. Even personal care companies--typically the last to suffer losses among general consumer spending--prepared for significant losses for holiday 2001, hoping to regroup and rebuild in 2002.

A Positive Spin

But amazingly, though predictions for holiday 2001 fragrance sales were daunting, industry experts agree that the overall hit for the year was less severe than expected in the fragrance category.

Although prestige fragrance declined last year, sales still reached $2.9 billion, according to NPD BeautyTrends. Consumers showed their spirit by making the holidays as merry as possible, buying up more gift sets than most analysts originally expected.

"Both men's and women's (department store) fragrance gift sets showed strong growth last year as single-bottle sales declined," revealed Natalie Granik Seidman, director, NPD BeautyTrends. "In November 2001, fragrance sales broke the record high in gift set share for men and women in NPD BeautyTrends' tracking history."

She added that gift sets are not just for giving nowadays: "A higher proportion of men and women will purchase gift sets for personal use rather than as a gift."

Women's and men's fragrances and subcategories in food, drug and mass merchandisers, excluding Wal-Mart, also fell. In the men's category, however, the drop was less than the previous year, according to IRI. Men's shaving lotions, colognes and talcs fell 0.9% for the 52 weeks ending Jan. 27, 2002--but the previous year, sales had dipped 1.4%.

Women's mass fragrance didn't weather the storm quite as well; for the 52 weeks ending Jan. 27, women's perfumes and colognes dropped 4%, a full percentage point lower than the previous year's sales declines. Still, fragrance marketers look forward to an improvement this year, backing that opinion with post-holiday data and with observations on consumer behavior and mindset.

"It was a very strong period for us overall," confirmed Hilary Dart, president, Calvin Klein Cosmetics. "Consumer demand has always been a focal part of our business, and from a marketing perspective, we were on target with their needs this holiday season."

Executives at Avon Products, New York, NY, noted that interest in fragrance purchases had a sluggish start but gained momentum as the holidays approached last year. "Holiday sales were slow at the beginning of the quarter, but picked up rapidly toward the end," commented Alice Pampin, marketing manager, fragrance, Avon Products "Consumers shopped very late this past holiday."

She added that a more family-centered attitude may have kept people at home rather than in the stores for a longer time than in previous years.

Whether in the mall or online, however, fragrance vendors forged ahead with releases, and shoppers took their pick of a wealth of holiday offerings.

"It was a very strong period for us overall," said Ms. Dart of Calvin Klein. "In the women's category, our leading brands, Eternity, Obsession and cKOne, sustained ranking and beat industry existing brand performance. Our men's franchise far exceeded the industry trends, and we continue to remain the premiere position in men's fragrance within department stores."

Fragrance marketers contacted by Happi plan on moving ahead with bold new releases for spring and summer. sNew scents and novel application or delivery systems for the coming months aim to to satisfy a public that is regaining some of its former verve.

Something for Mom

Prestige fragrances have always been popular for gift-giving, even if that gift is to oneself. Mother's Day is the next major focus for gift sets.

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Perfumers are focusing on emotion as well as reputation with their spring and Mother's Day products and collections. For example, Chanel's Mother's Day releases include No. 5 Invigorating, Allure Pampering and Coco Mademoiselle gift sets, each geared toward a specific effect or feeling.

No. 5 Invigorating contains an eau de toilette spray, Sheer Moisture mist and Essential bath oils encased in a Chanel logo bag. The set retails for $70.

Allure Pampering includes an eau de parfum spray, Cooling body tonic and bath gel, and Coco Mademoiselle is available for the first time in a gift package of eau de parfum spray and Fresh body lotion. These sets also include a logo bag.

Issey Miyake offers what company executives call "a gift of emotion" with the L'Eau d'Issey Mother's Day 2002 gift box. The casing is clear blue, has a soft feel and is geometrically shaped. It includes eau de toilette Natural spray, Pure bath and shower gel and Pure body lotion.

The company also introduced its Le Feu d'Issey collection containing body lotion and perfumed deodorant, and a Le Feu d'Issey Light set which includes body lotion and shower gel, both timed as Mother's Day releases. Both are housed in whimsical, rounded packaging to communicate "light and joy," according to company executives.

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Jean Paul Gaultier added two new collections for Mother's Day. Fragile comes with its own round, black high-style bag and contains eau de toilette Natural spray, perfumed body lotion and perfumed mousse for bath and shower. Classique is now accompanied by a leather-lace design-inspired red or black bag. The red bag contains eau de toilette Natural spray and Beauty lotion for the body; the black bag holds eau de parfum and Beauty lotion for the body.

A Breath of Fresh Air

A fresher outlook comes with the spring; this year, it has special meaning as consumers begin to regroup following a difficult 2001. The key descriptions among many of this spring's new offerings tend toward light, airy, fresh or playful.

Oscar de la Renta introduced Oscar Tropical eau de toilette and perfumed Body mist. The scent is described as lively, light and modern. It delivers an initial impact of bergamot, mandarin orange, wild blackberry and passion fruit. It has a floral heart of the original Oscar fragrance subtly recomposed in a fresher, livelier and vivacious version. Frangipani blossom, orange blossom and ylang-ylang finish the blend. It retails for $45 for the eau de toilette and $40 for the Body mist.

Annick Goutal offers a single-flower fragrance that company executives described as joyful, tender and carefree. The name, Le Chevrefeuille, means "honeysuckle." This note is blended with a fresh, herbaceous note and wild narcissus, jasmine and lemon tree petit grain.

Also timed for spring is the launch of L'Eau d'Issey eau de toilette in a 1-oz. spray. The container is elegant and gives the appearance of the fragrance being suspended, company executives said. "This is a new kind of spray--easy to refill, feminine and streamlined," according to a company spokesperson.

BCBGirls features a bag with the purchase of any two products from the BCBGirls fragrance line (Nature, Star, Metre or Sexy). The bag follows the popular logo trend, with the BCBG logo pattern repeated throughout the bag. It was introduced in March at BCBG Max Azria boutiques across the country.

Truth Calvin Klein will put a focus on men this summer with Truth Calvin Klein Men. The scent is sexy and classic, according to the company. The structure of the fragrance is centered around a core of canopy greens accented by basil and cardomom, along with notes of white patchouli, red cedar and wacapou. The bottle is elegantly simple with a modern, clean design for a masculine look.

Calvin Klein plans on "more newness in 2002 than any year in our history," said Ms. Dart. Eternity Rose Blush, a limited edition item, was released in February; this month, Truth Calvin Klein Lush will be added to the company's lineup. In May, Sheer Obsession, also a limited edition fragrance, win be introduced for summer. Truth Calvin Klein Men is slated for a June release.

Lancome focused on the success of Miracle, a blend of freesia, lychee,

magnolia, jasmine and amber, and has expanded on the line for this year's spring season. Miracle Radiant body mist was introduced as a lighter version of the fragrance; it contains vitamins B5 and E to treat the skin while leaving it scented and radiant, company executives said.

Dot Calm

It hasn't been easy for marketers to communicate with a public that is somewhat less enthusiastic about venturing out to the stores, whether for holidays or everyday. And though media advertising can have a major impact, industry experts agree that point-of-purchase has a very strong influence on purchasing decisions. How to sell a product, new or tried-and-true, when POP has been downscaled by the cautions consumer who's staying close to home?

The solution is simple: If the customer won't come to the store, the store must come to the customer. The explosion of online product availability has opened up new worlds not only for the consumer but for the marketer as well. Most major department stores and virtually every commercially-available fragrance can be found online--from the safety of one's home at a relaxed and comfortable pace.

Online marketing can be catch-as-catch-can, but fragrance companies are utilizing the internet to not only make the product available to a larger audience, but give general information, offer crosslinks and give a much more detailed sales pitch than is possible when a rushed customer is at the store.

Today's websites focus more on the individual and his or her needs. Personalized questionnaires and charts, extensive data on both the products and the company itself and even mix-and-match capabilities help achieve this goal. The Elizabeth Arden www.elizabetharden.com fragrance category includes a section called Red Door, which allows shoppers to seek out the ideal fragrance by gender, price range and even personality type. And Avon's fragrance searches offer ingredient listings for each scent, including the colors used.

Companies are also able to market well in advance of the release of a product. For example, Rachel Quayle, founder of Perfume Partner, a product that helps alleviate some common reactions to perfumes, offers a website, www.perfumepartner.net, that provides information about her UK-based company. On the site, individuals can also access consumer test results and tips on how to use the product.

Ms. Quayle anticipates a fall 2002 release of her product in the U.S.; her detailed site allows a jump start for interested consumers, who can bookmark the information before it debuts in the U.S.

The product Ms. Quayle offers is not a fragrance; it is a new innovation that enables individuals to wear their desired fragrances without the irritation, allergic reaction or scent change and distortion that sensitive individuals can experience, according to a company statement.

Ms. Quale said market research discovered about 53% of women who use fragrances and 50% of men had some dissatisfaction with fragrance performance. Complaints fell into one or more of the following categories: The scent faded too quickly; the scent changed or distorted; an allergic reaction, such as burning or itching, occurred; a rash developed; the skin was stained or the individual experienced migraine or nausea.

Perfume Partner can make fragrance last longer and allay skin reactions, according to company claims. It is easy to use; a sponge applicator is pressed gently to the skin's surface to release the liquid. The liquid can then be spread across the desired area and should be allowed to dry naturally. A protective, odor-free film is formed which can then be sprayed over with one's perfume.

"It is important for people to realize that perfume-related problems are usually a chemical or sensitive reaction experienced when perfume touches or penetrates the skin," Ms. Quayle stressed. "It is we who react to the perfumes and create the problems."

The product has been certified safe to use on sensitive skin; however, Ms. Quayle cautioned that depending on the level of sensitivity, it may not be suitable for highly sensitive skin.

The patented Perfume Partner is the only product of its kind available in a global market, according to Ms. Quayle. Based on feedback from her home territory, she anticipates a positive reaction in the U.S. The company developed Perfume Partner as the first product in what will eventually be a full line.

"Perfume Partner is totally new and unique," she said. "Each product in the line will be geared to giving consumers solutions to problems they are experiencing, and enabling them to gain better value for the money they spend."

On a Personal Note

Fine fragrance houses may be getting competition from a startup company that has beaten the odds. Stardust, a line created by Phillip Prime, is making a splash at exclusive retailers such as Bergdorf Goodman, Herrod's of London, select Saks Fifth Avenue stores and other prestige or niche locations.

Mr. Prime, a native of Trinidad, has come a long way, according to company executives. His career began in medicine; be went on to chemistry and eventually ended up developing perfumes for Elizabeth Arden. With his chemistry background, he is one of the few fragrance designers who actually makes his own perfume, a company spokes-person said.

Mr. Prime began working with fragrances in 1968 and was involved in the creation of such fragrances as Chloe and Lagerfeld. He commented on the changes that have occured in fragrance during that time.

"Society used to be restricted," he said. "Gender roles were much more rigid. Now, people want to get closer to one another, and fragrances have followed that trend, with materials and notes crossing over more often between the masculine and the feminine."

Fragrance also concentrates much more on individuality and exploration, according to Mr. Prime. "Today's woman has confidence, and she will be drawn not only to what makes her feel beautiful, but also her whole concept of what's good in her life and what helps her to identify with the person she is," he pointed out.

With this ideal--and his wife, Cynthia--in mind, he created Stardust for women. "Stardust is unique, strong and sensual," he said. "It is a tribute to my wife because she exemplifies that kind of woman."

Mr. Prime was careful to mirror that inspiration in each aspect of the fragrance, including the packaging. "We worked around the fragrance's concept and came up with something really beautiful," he said. "With its prism shape, when the bottle is turned, it creates art. It's multidimensional, as a woman is."

Mr. Prime's newest venture is a male version of the fragrance. The scent was released last fall. He said that the product has been well received; a series of promotions in March during Beauty Week in Chicago are expected to spread the word to consumers and cement the new fragrance's place on the shelf.

But whether creating a scent for men or women, the basic principle is the same. "Men and women want the same thing--to get closer," Mr. Prime said. "A wonderful fragrance can help them do that."

It's Only Natural

The classics will always have their place, and most individuals have a favorite special-occasion or daily wear fragrance. But consumers are beginning to explore natural fragrances as a part of the natural products trend.

Essential oils are popular in aromatherapy; many are intended to produce an emotional effect, such as relaxation, invigoration or anxiety reduction. The side benefit, of course, is that many essential oil fragrances can be pleasing to others as well, and aromatherapy companies are accommodating consumer requests to blend oils into fragrance lines.

LorAnn Oils, Lansing, MI, was founded in 1962 by O.K. Grettenberger. Today, his grandson, John Grettenberger Jr., is helping spread the word about a company that has successfully manufactured and distributed essential oils for 40 years. LorAnn Oils produces oils for foods and pharmaceuticals as well as cosmetics. Recently the company relaunched its Global Notes Pure Essence line of perfumes.

Mr. Grettenberger stressed that when he says "natural," he means it. "We offer a 100% natural product, making the new Global Notes line unlike any perfume on the commercial market. Most others are synthetic or only partially natural," he insisted.

This quality is important to consumers, he added. "Consumers are demanding purity from the perfume industry. Now that our product is 100% natural, we can meet those demands and set a new market standard."

Global Notes Pure Essence perfumes are available in Tropical Sun, Eastern Harmony, Moroccan Heat, Woodland Whisper, Desert Blossom and Provencal Dawn.

AromaLand, Santa Fe, NM, offers face and body oils and has introduced Rose face and body oil, which the company touts as all-natural. According to company executives, synthetic oils can leave a greasy, unpleasant coat on the skin. Rose face and body oil is made of cold-pressed plant oils and Moroccan rose essential oil.

Amid the many fragrance choices this spring and summer, one thing is certain: Consumers are bouncing back from troubling times and discovering what truly makes them happy. And if pleasing the senses affords a feeling of calmness and cheer, fragrance houses are willing and able to accommodate.

Recession-Proof?

Sales results for the holiday season were down, but fragrances took
less of a hit than originally predicted. Here are the top five
women's and men's fragrance marketers in supermarkets, drug stores
and mass merchandisers * for the 52 weeks ended Jan. 27, 2002.
Dollar and unit sales are in millions.

WOMEN'S PERFUMES AND COLOGNES (including body powders)

Vendor             $ Sales   % Change   Unit Sales   % Change

Coty                85.6        -4.9       12.1         -4.6
Elizabeth Arden     36.8        -2.6        1.9          1.9
Parfums de Coeur    33.7       -17.2        8.1        -21.8
Revlon              26.3        -8.8        2.2        -10.7
New Dana            18.1        -4.3        1.6         -6.5
Category Total      387.6       -4.0       53.4         -9.6

MEN'S SHAVING LOTIONS/COLOGNES/TALCS

Vendor              $ Sales   % Change   Unit Sales   % Change

Coty                  62.0      -5.0        5.5           -7.3
Procter & Gamble      27.2      -8.0        4.3           -9.5
Unilever Prestige     21.9     -10.1        2.9          -12.4
J.B. Williams         15.1      -4.2        3.8           -5.7
The Gillette Co.      13.6       1.4        4.5            2.6
Category Total       278.9      -0.9       38.4           -5.2

Source: Information Resources Inc., Chicago, IL

* Excludes Wal-Mart