Sensory overload

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Ah, the sweet smell of success. Did you know that being an innovator in sensorial experiences can be big business? Very big business. For 2016, US-headquartered International Flavors and Fragrances (IFF) posted full-year net sales of more than $3.1bn – a figure not to be sniffed at, if you’ll excuse the pun. There are plenty of dollars to be made out of scents. 

IFF, which has 7,300 employees and operates in 35 countries, is divided into two main business units – unsurprisingly, flavours and fragrances. The latter generates a slightly higher proportion of overall revenue and is split into two businesses: fine fragrances and consumer fragrances. Fine fragrances is focused on the perfumery market, whereas consumer fragrances works with FMCG companies – such as Procter & Gamble, Unilever and Henkel – in categories including fabric, hair and home care, developing fragrances for high-volume products such as detergents, shampoos, shower gels and air fresheners. 

“We are very serious about insights,” says IFF’s global head of insight, Stan Knoops. “We have training in place for everyone in the IFF organisation, so they know what an insight is –and we build our insights very specifically. Each should have three parts: facts – what is it?; what is new – what did you not know before?; and finally, there should be an action.” 

That insights should be actionable is something of a mantra for Knoops, and IFF is a business that does far more than pay lip service to this approach. The main insights collected from each study are fed into a database to which everyone in the business has access. This “powerful” resource is used for making decisions – some of them highly significant from a business strategy perspective, such as whether to build or close a factory. 

Consumer connects

Consumer insight lies at the heart of IFF and is not seen as the responsibility of the research specialists alone. The consumer insight team organises ‘consumer connects’ for everyone within the business. This means that – once or twice a year – every member of staff engages with different consumers, to make sure everyone has their best interests in mind.

“IFF is very focused on consumers,” says Knoops. “I don’t think every fragrance house does the same. You could say let’s focus on our customers or the supply-chain part of it. But we really want to make sure we develop fragrances that consumers love. That is a pretty big statement and we need to make sure we follow up on it.” 

Having taken the trouble to expose its employees to consumers and their needs, IFF makes certain this feeds into the innovation process. It runs an internal website called Alchemy, through which employees can share insights and “submit a seed, or the start of something new”. 

Suggestions are taken forward through online collaboration. A review of ideas on the site takes place every three months. Resource is then committed to progress the best one or two ideas each quarter, with the aim of developing them into a new fragrance. 

Knoops, a Dutch national with a Master’s degree in sensory research, first came to IFF in 2002. However, from 2008, he spent six years away, working for one of the company’s biggest clients, Unilever, on global research projects on the interface between marketing and R&D, building the consumer insight team there from six people to more than 25. 

Since his return, Knoops has been based in the Netherlands, which is home to the IFF centre of excellence for fabric. The company has a devolved structure for its centres of excellence: personal wash is based in Singapore, home care in the US, and beauty care in France. There are also consumer insight teams for regions such as Latin America. 

Fragrance trends

Around 35 people work in consumer insight for IFF globally, but there is also a 10-strong consumer science team and a strategic insight team of four, which is more focused on the long-term future. Knoops and his team collaborate with these departments when and where appropriate, often briefing the consumer science team on innovations to explore. Discoveries are also shared with the fine fragrances and flavours units of IFF.  

“It’s interesting to see what fragrance trends are being developed in fine fragrance that can travel to consumer fragrances – and the other way around. But the teams are separate. 

“Maybe even more important is the collaboration with the flavour business, especially in new technologies or innovation, which could be very interesting in flavours and fragrances. One area where you see a big overlap is in toothpaste. Freshness of toothpaste – is that a flavour or is that a fragrance? There are lots of learnings.”

Olfactive notes

The science behind this should not be overlooked – and there are business implications attached to the scientific decisions made. Take detergents, for example. Not only can IFF design fragrances that are stronger or that possess “specific olfactive notes” that consumers respond to, but it can also create fabric fragrances that work more efficiently for different types of clothes. “We can even design a fragrance that sticks better on modern fibres – or polyester – than on cotton fibres,” says Knoops. 

IFF has specifically invested in technology to create longer-lasting fragrances. It offers a patented controlled fragrance-release product called Encapsulation. 

The amount of water used in a wash may also have an impact on fragrance performance – so understanding consumer preferences and trends is essential if IFF is to make sound strategic decisions. 

Research consistently shows that – even with more functional products, such as powder detergent – fragrance is an important point of differentiation for consumers. However, it is very difficult for people to verbalise what it is they like about, or want from, a fragrance. When asked, Knoops explains, they tend to use the same words: “fresh, clean, long-lasting, and I like it”. Hardly a goldmine of insight. 

To get a deeper understanding, IFF recently undertook a big ethnographic study in the US (see panel), but, of course, it also carries out smelling tests with focus groups. For the most part, this is done through a network of specialist local agencies with access to a “clean room” – a facility that does not interfere with fragrance smell – and that can handle the complex logistics of distributing product. 

Sometimes IFF works hand-in-hand with a client, undertaking research together and sharing the results as part of a co-generation process. For other projects, however, it may work to a brief “in a silo”, if that is what the client prefers. As one would expect, Knoops says a collaborative approach usually delivers a bigger impact. 

There are currently several significant trends that IFF – in common with many other organisations – is wrestling with. First, changing consumer tastes. Millennials, a generation known for seeking out new experiences, do not disappoint when it comes to fragrances; research finds that they are often attracted to strong, intense scents. Keeping abreast of these changing preferences will be vital for innovation. 

Second, while fragrance matters a great deal to consumers – many will sniff a shampoo or fabric conditioner in the supermarket – the growth of online shopping means people often buy before they have the chance to smell a product. IFF’s strategic insight team is spending more time trying to figure out how to communicate a fragrance beyond smelling it. The use of colours figures large here. 

Last, but most certainly not least, is the issue of sustainability. IFF is involved in a range of eco-friendly and socially progressive activities, including opening an on-site wind turbine at its Tilburg facility, in the Netherlands – unique to the flavours and fragrances industry – and joining the Well Living Lab Alliance. This initiative, led by Delos and Mayo Clinic, aims to develop healthier indoor spaces through human-centred research. 

Cradle to grave

This commitment to sustainability has fed through to product development. In 2016, IFF launched PuraVita, a fragrance with notes of green apple, wood, apricot and vanilla. It was the first Cradle to Cradle-certified fragrance, meeting a product standard that guides designers and manufacturers through a process encompassing five categories: material health; material re-utilisation; renewable energy and carbon management; water stewardship; and social fairness.

“Sustainability is an important driver for us in terms of scientific advancement,” says Knoops. “We have a strong focus on enhancing the wellbeing of the planet and its people. Developing a Cradle to Cradle fragrance is a big achievement considering all the criteria you have to meet.” 

IFF, with roots going back 128 years, has been listed on the New York Stock Exchange for more than half a century. But it is not an organisation resting on its laurels (workers in IFF labs are probably busy extracting scent from this plant, along with many others!). The business is being driven forward by consumer insight and innovation with a healthy focus on sustainability. 

Steve Knoops is global head of insight at IFF