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Procter & Gamble Makes Waves In The Perfume Industry

Posted by: Shopgirl, on: Monday, 17 March 2014

Procter & Gamble Co. is stepping up to the plate and becoming a major player in the market of high-end fragrances. While P&G would usually be associated with home and health care products, they’re finally making a splash in the commercial perfumes market with their brands, like Dolce & Gabbana, Gucci and Hugo Boss.

P&G has been dabbling in fragrances since 1992, but it only really started growing rapidly upon getting the Gucci license in 2003. Three years later, we saw the company license Dolce & Gabbana. From then, it has – slowly, but surely – been making a splash in the industry.

Just how much of a splash, you ask? This well-known consumer goods manufacturer now generates roughly $2.5 billion sales a year with its fragrances. From its business standpoint, that makes up more than a whopping 10% of the company’s revenue in its beauty department. Of course, these prestige brands in their beauty line also include SK-II high-end skin care products, and these have tripled in sales and have increased their profits four-fold since 2000.

I’m sure this is certainly bringing smiles on their faces as much as it’s lining their pockets, as not much of the same success could be said for their other brands of beauty products such as Pantene and Olay. Rekindling the flame for the sales growth of both these products has been proving to be quite a challenge for P&G. Both brands have been struggling to grow over the years as their Pantene hair care products seemed to have met a dead end in its sales at roughly $3 billion per year, and their Olay skin care products stuck at around $2 billion annually.

This is much unlike their high-end perfumes. Because of the company’s success, U.S. sales of high-end scents have grown by double digits in the last five years. U.S. citizens have been turning to high-end fragrances because despite perfumes being an item of luxury, it’s at least the affordable kind.

In anyone’s point of view, this is certainly nothing but good news for the company itself. The company has always relied on places like Wal-Mart and Kroger to sell their products. But now, aside from the increase in revenues, this success will allow P&G to provide more venues for reaching customers. After all, fragrances like these are mostly sold in department stores and with very high visibility. It’s a whole new game field to nab new customers, and the company certainly intends to play.

With this wave of success in its perfume products, P&G has released a new fragrance named Dolce in its Dolce & Gabbana line. It’s far from cheap though. It costs $90 for 1.6 ounces and $112 for 2.5 ounces. It’s got sweet and floral notes, and is certainly only one of the latest to come from this brand. And P&G has already been making a mark with its other fragrances as well. Dolce & Gabbana’s Light Blue is no. 3 among men’s and women’s perfumes. The One has ranked no. 7 for men’s fragrances, according to the NPD Group.

Of course, P&G won’t stop here. They have mentioned further plans for growing in the high-end fragrance industry and licensing other well-known names. Back in 2013, the company had even announced making contracts with famous designers, like Stella McCartney and Alexander McQueen, to develop new and competitive scents for the market.

Another possible option at this point would also be to expand their Dolce & Gabbana or Gucci brands into categories other than their current categories. After all, P&G has been rightfully known for their skin care and makeup expertise. Such a move wouldn’t be out of place at all for these brands.

Only time will tell, however, if Procter & Gamble Co. will be able to catch up with leading companies like Estee Lauder and L’Oreal in the commercial beauty industry.

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