In Finance, Insight

There is no definition of where the fragrance industry starts and ends, as it spans 25 product categories from ingredient suppliers to consumer product manufacturers and retailers. The International Fragrance Association (IFRA), commissioned PwC to conduct a study titled “The Value of Fragrance.”

“This report highlights how the fragrance industry is sophisti­cated, global and innovative. As an industry, we invest eight percent of net sales in R&D—higher than all sectors in the European Union other than pharmace­uticals and technology hardware,” said Martina Bianchini, the president of IFRA. “The value added per employee is €135,000—higher than in the automotive sector and underlining how much talent and creativity we have in our industry.”

The findings below are derived from data on the fragrance industry’s activities globally for 2017, excluding the US and Canada. Primary data was collected from 14 global and regional fragrance manufacturers.

The Numbers: 

  • The fragrance industry generated sales worth €7.3 billion in 2017 and contributed €357 billion in global sales generated by consumer product manufacturing and retailing—23% in home care/cleaning, 68% personal care/cosmetics and 9% fine fragrance.
  • It is estimated that fragrance manufacturing is responsible for adding €7.3 billion to the economy and €48-72 billion in added value for 25 consumer product categories.
  • The industry supports 26,000 highly skilled jobs and nearly 400,000 jobs among 3,000 suppliers in more than 50 countries across the supply chain.
  • The proportion of net sales invested in R&D by fragrance manufacturers is 8%—higher than all sectors other than pharmaceuticals and technology hardware in the European Union.
  • Fragrance is in the middle of a sophisticated supply chain of 3,000 natural and synthetic raw materials, from small-holder farms to synthetics manufacturers.

“The fragrance industry may be relatively small, but it makes a big impression. This report shows how we add significant economic value to our suppliers and customers, as well as consumers, for whom fragrance is a major factor in purchasing decisions,” said Michael Carlos, IFRA chairman.

Read the full PwC report commissioned by IFRA.

Photo: Magdalena Smolnicka via Unsplash

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