Fragrant Opportunities In The Air For Indian MSMEs

This article Fragrant Opportunities by Anuradha Goyal, author, and founder of IndiTales.com was first published by the New Indian Express newspaper on July 07, 2020.

A trip to Europe used to have two mandatory stops – a winery and a perfumery. Perfume makers proudly showcase their fragrances new and classic. Back home one finds rows of colorful oil-based perfume bottles in the lanes of Chandni Chowk in Delhi, Charminar in Hyderabad, or Hazratganj in Lucknow. Connoisseurs visit these lanes to get custom-made fragrances for themselves. Time to consider Fragrant Opportunities for the Indian MSME!

Kannauj in UP is India’s undisputed fragrance capital since the time it was the capital of king Harshvardhan in the early 7th CE. Making of perfumes is mentioned in ancient texts like Charak Samhita and Gangadhara’s Gandhasara. Kannauj continues to produce Attar – oil-based perfume. That is extracted using traditional methods in 350 odd small scales units in the town. They have captured the smell of the first rains and the smell of the earth in their bottles. Deservedly they have a Geographical Indicator tag.

Fragrant Opportunities

Visit an upmarket mall and you would find it hard to spot an Indian perfume brand. I could only locate one brand from Titan among all the lists of best-selling perfumes in India. This too has been designed by French perfumers, positioned as a French perfume with even an advertisement in French. Then there are some niche brands. That would classify as boutique outfits, catering to a small niche audience in the luxury segment. Most of the mass consumption of ethanol or alcohol-based fragrances is that of popular international brands. Some of which are from multinational FMCG companies operating in India. The oil-based fragrances produced in the small-scale units in the hinterlands of India have a small market in India and the middle east.

As per the MSME website, the global fragrance and flavor industry is about $24.10 Billion. Out of this India’s share is just about $500 million. Of this, about 40% is home fragrance share. That includes scented oils, fragrant sprays, and scented oils.

Fragrance & Flavour Development Centre

Fragrance & Flavour Development Centre (FFDC) was set-up in Kannauj in 1991 by the Government of India. There are two extension centers at Kanpur in UP and Berhampur in Odisha. It aims to serve as an interface between essential oil, fragrance, and flavor industry and the R & D institutions. Both in the field of agrotechnology and chemical technology. They provide training to entrepreneurs on areas like aromatherapy, on essential oils and perfumery. Making Agarbatti and dhoop. Setting up small processing units for the primary processing of raw fragrance.

Fragrances are an invisible part of almost every consumer product we use on a day to day basis. Right from our toothpaste to cosmetics to food on our plate, making them an important industrial input product. The wellness industry has products like aromatherapy that uses essential oils. The supply chain of fragrances comprises the cultivation of aromatic plants, primary processing at the local level. Secondary processing as per the need of the final product, and the incorporation in the final product. Perfumes are the simplest product that needs just the right concentrate mix and packaging, after which it is more or less a marketing game.

Colorful Perfume Bottles on display - Fragrant Opportunities

Colorful Perfume Bottles on display

Raw Materials

There are majorly 300 different types of fragrant raw materials. Of these, 50% are cultivated and rest are found in nature. A significant number of these are that can be easily cultivated. India is a leader in the production of raw materials of some of the fragrances like Menthol Mint, Spice Oils, Oleoresins, and some floral extracts. Immense untapped opportunities exist in the cultivation and processing of plants like basil, lemongrass, flowers, and spices that grow in India’s weather conditions. Setting up a primary processing unit is easy and not capital intensive. Many such units are being managed by self-help groups. A lot of government support is also available to set up such units as they fall under MSME.

In terms of trends, deodorants dominate India’s market. Though perfumes are slowly gaining share. Note that the difference between the two is just the percentage of fragrance oil they have. Working professionals, particularly women professionals are major consumers of fragrances in India. Globally ethanol-based perfumes are making way for new materials like the Cyclomethicone. A recent surge in the usage of sanitizers due to COVID 19 has added to the demand for fragrances.

New Fragrances

Consumers are always looking for fresh new fragrances. So the industry needs to constantly respond by concocting new ways to titillate the olfactory nerves. Consumption of local oil-based perfumes remains limited. Traditionalists say that for the hot tropical weather, oil-based perfumes work better and last longer. Will this awareness change the consumption patterns? Maybe.

When I asked Sh. Shakti Vinay Shukla, director FFDC, why do we not have homegrown brands of perfumes? He said the perfume choices are driven by the fashion houses and most of them are aligned to the European ones.

Is it not time to have homegrown fragrance brands for a large consumer market in India? Should Indian fragrances not carve a niche for themselves in the world? Should Indian consumers demand local fragrances? The industry is bound to respond to fragrant opportunities. Local for Vocal can be an umbrella marketing campaign for this.

Edited for this online publication.

Anuradha Goyal

Anuradha is an Author, Traveler, Bibliophile, Art History Student, Innovation Consultant and an Avid Blogger.

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