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Fragrance Industry Analysis: Trends For 2022 and Beyond

Fragrance Industry Analysis: Trends For 2022 and Beyond
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The fragrance industry took a hit in 2020 as the in-store experience shifted, and our new at-home routine minimized the demand for fragrance.

Whether it’s because so many consumers temporarily lost their sense of smell or they’re looking for a fragrance to boost their mood (or a combination of the two), our relationship with scent has drastically changed over the last two years. As a result, fragrance sales in the US increased by nearly 50% in 2021. Not only that, but The NPD Group has found that fragrance is outperforming other segments, with Q3 revenues not only up year over year but also increased by a whopping 38% versus pre-pandemic 2019.

Retail signals from 2021 and 2022 demonstrate demand for this booming sector. In May 2020, the assortment of fragrances at top retailers dropped to a two-year low (10.4K). Ahead of the 2021 holiday season, those retailers increased their assortment by 56%, and the average product count continues to outpace pre-pandemic levels. October 2021 and April 2022 saw the fragrance category’s highest sell-out rates at retailers like Ulta, Nordstrom, Neiman Marcus, Bloomingdales, and Saks.

StyleSage data: average fragrance product count

According to the newly released NPD Fragrance Consumer Study, most US consumers who wore fragrances less often in 2020 have returned to their everyday usage. Nearly one-third of consumers are buying fragrances for themselves more often these days, and three out of four consumers feel that scent helps lift and enhance their moods or bring back memories of happy times, places, and experiences.

As sales bounce back, industry leaders pivot to adapt to consumers' new priorities, from wellness to sustainability. Ahead are four trends impacting the fragrance industry in 2022.

Beauty lovers want products that protect the planet in innovative ways, allowing them to shop more consciously. According to Hearst Magazines and MarketCast, 75% of consumers are interested in buying brands that embrace sustainability and want to know if a fragrance is environmentally friendly and made with natural ingredients.

From indie to fine fragrance houses, sustainability remains top of mind. Aqua Allegoria by Guerlain uses organic alcohol produced from beets, and each bottle comes packaged in recycled post-consumer material (meaning it didn’t make it to the landfill), while Floral Street, for example, houses each perfume in a pulp carton package. Other brands are exploring refillable and recyclable packaging – Jean Paul Gaultier’s latest scent, Scandal, comes in a refillable bottle; similarly, Diptyque uses refillable glass containers for its hand care collection.

Not only are these sustainable solutions better for the planet, but they’re performing well in the market. According to StyleSage data, fragrances with sustainable components have been increasing in sold-out rates, reaching 12% in April 2022.  

The effect of COVID on one's sense of smell is well documented; A survey published in the Journal of Internal Medicine found that olfactory dysfunction was reported in nearly 86% of mild coronavirus cases. As a result, consumers are thinking more about scents and their sense of smell and want scents that could promote feelings of clarity or calm.

Interest in aromachology, the study of aromas on human behavior and emotion, climbed to record levels in 2020 as global uncertainty surrounding the pandemic pushed consumers to seek holistic healing as a form of self-care. Notes that aid in relaxation or boost energy, like lavender, lemon, chamomile, and aloe vera, are expected to dominate.

In 2019, The Nue Co. launched its Functional Fragrance, a soothing blend of palo santo, violet, and cardamom that promises to reduce stress. They followed up with Forest Lungs in 2020 and Mind Energy in 2021, aiming to produce some of the same health benefits associated with forest bathing and boosting focus, respectively. According to The Nue Co., 86% of its Mind Energy customers felt "increased focus" after using the product, 76% felt more alert, and 76% felt their productivity levels improved.

Social consciousness is imperative, and consumers want to feel seen, regardless of how they identify. Unisex perfumes avoid traditional fruity and floral notes in favor of notes like sandalwood and patchouli or use overtly gendered notes in a balanced composition.

According to Mintel, gender-neutral fragrance launches accounted for 17% of the market in 2010, and by 2018 that figure had grown to 51%. Brands such as Boy Smells and The Phluid Project make gender fluidity a bold message in their marketing. Furthermore, StyleSage data shows that consumer demand in this category is growing, reaching a two-year peak of 17% in May 2022.

A market leader and trailblazer in the space, Calvin Klein debuted CK One in 1994. In 2020, the brand expanded on CK One with the introduction of CK Everyone; an eco-conscious scent made using naturally-sourced ingredients

The pandemic sparked dramatic changes in consumer behavior and the categories they wanted to shop. At the height of the pandemic, skin care, home fragrance, and body catered to the demand for an at-home routine.

Today, consumers are reverting to their pre-pandemic behavior and prefer routines that prepare them for reemergence (think: perfume, color cosmetics, nail art). Niche brands pivoted into these growing categories to remain relevant. In 2021, Comme des Garcons Parfums collaborated with streetwear brand Stussy, while jewelry designer Jennifer Fisher released her first fine fragrance.

Despite a slight decline in searches for candles and at-home fragrances, brands are still pivoting into the space as demand continues to top pre-pandemic levels. According to Scentmate, at least 70% of premium consumers agree that a home fragrance ritual is part of their daily life. Celine, Snif, Glossier, Ikea, and even Shake Shack have debuted their first home fragrance.

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