The year 2023 saw continued inflationary pressure affecting consumer behavior and destocking across the entire supply chain after a period of high inventory levels recorded during the COVID pandemic. While consumer demand for prestige fine fragrances and beauty products continued to grow, fast-moving consumer goods demand was impacted.
Continued strength of prestige markets
In 2023, several global consumer trends continued to grow in importance, fueled by the influence of social media; these included personal grooming, premium fragrance, and luxury lifestyle. The continued strength of prestige markets favored sales of our existing products in our Fine Fragrance and Personal Care segments. In Fine Fragrance, our strong new project pipeline and creative leadership continued to be rewarded with a significant share of new project wins. The year also saw successful launches of new fragrance blockbusters by some of our key customers. In Personal Care, we focused on relevant innovation launches spanning our three sub-segments.
The merger that created dsm-firmenich also allowed our newly forged teams to build a joint plan to deliver revenue synergies leveraging our combined market reach, broad portfolio, and creation and consumer insights capabilities.
Resilience of Consumer Fragrances and Fragrance Ingredients
In a context of a softer market driven by inflationary pressures and destocking, our teams in Consumer Fragrances and Ingredients focused on developing innovation to meet increased customer expectations and deliver superior products and to optimize inventory levels, while maintaining our best-in-class service levels. This was possible due to the close coordination between our Operations and Sales.
In Consumer Fragrance, several customers focused on driving consumer demand via promotions and innovation launches which led to increased demand for fragrances in the second half of the year. The work done hand-in-hand with our customers on the design and launch of innovative new projects positioned us well to benefit from the improved market conditions. Our position as a leading supplier to the world’s top consumer goods companies continued to grow, with increased presence of our fragrances across several fast-moving consumer goods categories.
In Ingredients, we observed different dynamics by segment. Demand for industry specialty ingredients and large volume fragrance ingredients remained soft throughout the year, owing to continued destocking, and adding to the soft consumer goods demand registered in the first half of the year. Demand for specialty fragrance ingredients remained high, driven by the strength of fine fragrance.
I am very proud of our team’s performance in the dynamic and multi-faceted environment we experienced in 2023. Alongside our ongoing integration of new capabilities, we reinforced our position to deliver the value our customers expect in their drive to delight consumers with product superiority across segments worldwide.
