European upturn fuels global fragrance growth

The value of the global market rose by 6 per cent to $30.6bn last year, thanks to the booming emerging markets and growth of 3.5 per cent in Western Europe, according to a recent Euromonitor report. The European results beat the forecasts of the market research firm as the fragrance industry successfully tapped into current fashion trends and took advantage of the popularity of celebrity endorsed products. At the beginning of the year Euromonitor had predicted a backlash against such products, saying that the market was oversaturated and customers would become bemused by seemingly endless launches. The prediction was accurate for the US fragrances market, where celebrity endorsed perfumes were first introduced, as sales fell by 4.5 per cent last year to $5.9bn. However, celebrity scents continue to drive growth in several Western European countries, where the consumer still drives a high turnover of products and is eager to follow the latest fashions. "Western Europe was far more dynamic than America in 2006. Fragrance has become the accessory that completes an outfit and these consumers update their scent wardrobe almost as often as they update their look,"​ said Diana Dodson from Euromonitor. While growth in the global market is being attributed to regular launches inspired by the latest trends, the continued pursuit of this trend is being blamed for the US downturn. In Europe, celebrity perfumes continue to arrive at the checkouts as fast as they hit the shelves because the consumer is still prepared to seek out fashionable new scents. However, there are variations within the European market. Dodson said the UK consumer is splashing on the celebrity scents while the French, who are less celebrity obsessed and know more about perfumery have not latched on to the trend. The UK market for celebrity perfumes has grown 2000 percent since 2004 and there have been over 30 such product launches so far this year, according to the UK retailer The Perfume Shop. These figures suggest that the UK market for celebrity fragrances is in good health. The Euromonitor report also mentioned the emergence onto the market of perfumes that reflect the latest consumer trends in other markets like the scents produced by the US-based firm Arlyessence, which tap into the latest colour and food fads. Such products feed off a similar consumer to the celebrity perfume buyer because they are short-term launches whose commercial value lies in their ability to tap into the latest fashions. As for the future, the Euromonitor report is optimistic for the global fragrance market predicting growth of 3 per cent a year until 2011, without taking inflation into consideration. The value of the Western European market is expected to grow at a lower rate of 0.6 per cent annually.