- Over the past year, we’ve discussed consumer categories that have recovery in front of them (as varied as European travel and haircuts/styling), categories that have large air pockets beneath them (consumer electronics and home fitness equipment), and categories that are structurally larger as a consequence of the pandemic (BevAlc retail, home improvement, and fragrance). By “structurally larger” we mean that their share of the economy will be larger (for the foreseeable future) than it was pre-pandemic.
- Last week, L'Oréal reported 3Q22 results, which were solid. During their update call, management opined on why fragrance has “become structurally larger” (for context, L’Oréal’s fragrance business is 55% larger than it was in 2019). According to CEO Nicolas Hieroniamus, “the [fragrance] market continues to grow at plus 20% year-to-date, so very dynamic. We are at 35%. And I think it's a trend that's going to last. It's a category that men, women all over the world have really fallen for post-COVID because...there's also this kind of self-indulgence trend on fragrances."
- This week, Inter Parfums reported 3Q22 U.S. revenue figures and year-to-date growth of +60% is coming from new lines (Ferragamo, Donna Karan, and DKNY) and organic growth of established brands (+36%), including GUESS?, Oscar de la Renta, Hollister, and Abercrombie & Fitch.
- Last year, industry journal Cosmetic Executive Women did a piece titled “Scent During Quarantine: How a Pandemic Changed the Way Consumers Explore Fragrance” which shared industry insights group Firmenich research on the topic including “fragrances that conveyed a sense of cleanliness and protection played an important role in consumers’ lives, particularly at the beginning of lockdown, as did fragrances that delivered soothing comfort and serenity.” According to the group's most recent COVID survey, “58% of consumers said they appreciate scents more now than…[pre-pandemic].”
- We write about all of this here because being an underdeveloped category means that it has opportunity for further development at established retail locations and as a newly imagined perfumery concept store.
