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Climate change impacts the high-end perfume industry

In the world of luxury, a specific segment is particularly exposed to climate change: high-end perfumery. Production is impacted, prices are skyrocketing, and major shortages are now endangering the perfume industry. Analysis.

Eva Morletto

By Eva Morletto10 août 2022

Luxury brands are committed to the protection of rare flowers and plants used in perfumery. Here a harvest of roses in Grasse, France (Chanel)

Tropical storms, hurricanes, glaciers melting, droughts, the IPCC has been clear: these phenomena will increase over the next few years, and it is urgent to implement measures and solutions to limit damages. All production sectors will be imacted by climate change, and in the luxury goods industry, there is one segment that is particularly exposed to climate uncertainty: high-end perfumery.

Droughts, hurricanes: climate disruptions are impacting harvests

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The big houses are stockpiling raw materials in anticipation of possible shortages in the years to come

Benoit Verdier, co-founder of Ex Nihilo

"The big houses are stockpiling raw materials in anticipation of possible shortages in the years to come", says Benoit Verdier, who founded Ex Nihilo with Sylvie Loday and Olivier Royère, now famous worldwide for its personalized fragrances. Several ingredients essential to perfumery are jeopardized and their production is fragile. "One of the most important producers of vanilla is Madagascar: 80% of the world's production comes from this African country. For several years now, droughts have had dramatic consequences. The lack of rainfall combined with unprecedentedly violent tropical storms are jeopardizing production and prices are exploding," continues Benoit Verdier.

Drought threatens perfume production in France and Madagascar (Shutterstock)

We can indeed recall the cyclone that ravaged the country in 2017, 30% of the vanilla crops were lost, the prices climbed above 600 dollars per kilo, much higher than the price of silver. It takes three years for vanilla to bloom; once opened, its fragile yellow flowers survive barely a dozen hours before they begin to wilt. In this short interval, the flower must be fertilized, or no pods will be produced. "Often, the very high prices of materials stem from the labor’s challenges and the time needed to obtain fragrances. The most delicate and environmentally sensitive flowers are usually those that require highly specialized skills to be produced," explains the perfumer. "We source our irises from Italy, specifically Tuscany. This is where the Palida iris grows, a rarer variety compared to the Iris germanica commonly used in perfumery. Expensive, the value oscillates around 80 000 euros per kilo, and it can reach up to 100 000 euros. The reason for this price? It takes three years for the flower to mature and then another three years for it to dry optimally. This is a very long time for the producers and the costs are therefore incompressible, and with the climatic hazard factor in addition, the product can become scarce, and its price can increase further. This dynamic is endangering the small independent perfumery houses, because the big brands have the means to buy large quantities from producers who thus feel secure in a situation that has become unstable."

Big houses buy up the last available land

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