Making scents: Raw deals can ruin a perfumer

The veil of secrecy around sourcing raw material is growing larger, and many argue that contractual bindings have gone too far.  (Reuters)

The veil of secrecy around sourcing raw material is growing larger, and many argue that contractual bindings have gone too far. (Reuters)

Formulating a fragrance concept is time-consuming, and it’s made more complicated by the complexity of sourcing each precious raw material for the final scent. For example, if patchouli (also called “Indo Gold”) is readily available and priced at a good rate, then it makes business sense for perfumer, client and end buyer to have this oil incorporated into a formulation. The perfumer gets a better margin, the client benefits from a reliable supply and the consumer pays a more affordable price.

But natural ingredients fluctuate in their availability and in their costs of extraction — and there are also brokers involved in the mix.
It is in no one’s interest to formulate a perfume that includes materials that are hard to source.  A perfumer must also be a futurist, predicting what will be readily available in years to come, and trying to ensure that future price fluctuations, currency swings and climate changes don’t affect the sensitive equations in a fragrance formulation.  

We are pushed to the limits by needing expensive raw materials to make a fragrance sublime, but having to work within commercial budgets. On occasion brokers buy up the entire harvest of a raw material, or prices escalate so much that it is impossible to avoid reformulating a fragrance. This comes at a different sort of cost — it risks the emotional relationship that consumers have to the perfume itself.  

Imagine if Tom Ford’s Grey Vetiver removed the vetiver? Consider what happened to the price of vanilla after the East Indian cyclones in the 1970s and 2000s. 

When a client engages a fragrance house, they are also accessing hard-won relationships with the raw material suppliers. There is some controversy in this area of the fragrance industry, especially when growers are given the incentive to sign exclusivity agreements.  After buyers have added their margins, perfume houses and independent perfumers must pay the inflated price — or do without a particular raw material. 

Exclusivity can become stifling to competition, and also to creativity as it limits the availability of a product, but it does provide some stability for the farmer.  Sadly, there are also unscrupulous brokers who have been caught “bulking out” pure essential oils with unscented carrier oils, or passing off inferior extractions as premium oils. When perfumers cannot access products directly, they must carry out cost-incurring tests to prove the authenticity of oils (reputable resellers prioritise the fact that they provide certification of their ingredients).  

All the while, the perfumer must face the economics-versus-creativity dilemma of whether it wouldn’t be better to forego a special raw material and just use cost-effective patchouli. It is a frustrating dilemma for the industry.  

Should brokers be allowed to block access to farmers? The veil of secrecy around sourcing is growing larger, and many argue that contractual bindings have gone too far.  It might be ambitious and naive, but I think we should work together so that more land is farmed and everyone is able to be supplied at a fair and consistent price.  Introducing reliable market pricing would provide stability for farmers and, at the same time, ensure a full palette of raw materials for perfumers to use.

Follow Tammy Violet Frazer on Twitter @frazerparfum.

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