​Going beyond the pandemic and shaping the ‘new normal’

by Hans Holger Gliewe - Chairman, The International Fragrance Association

When I was elected as the new Chairman of The International Fragrance Association last December, little did anyone know that a mysterious illness recently detected in China would become a global pandemic; a health crisis that would touch so many people and see life as we know it suspended.

Little did I know that I would chair the IFRA Board for the first time not in person in Singapore, but from my home in Germany, in a now-familiar ‘virtual meeting’.

Little did we know that our industry, like all sectors, would be facing its greatest challenge in many years.

We are still counting the human cost of the coronavirus pandemic. We must all stay vigilant and follow advice intended to save lives and protect health systems and public servants. But the time is also coming for industry leaders to look beyond crisis management and towards shaping our post-COVID-19 world.

Coping with the corona impact

The coronavirus pandemic hit fast and hit hard. Like other business sectors, ours is having to cope with disrupted supply chains, staff absences and the sometimes-difficult transition to teleworking.

But the fragrance industry also faces its own unique challenges. Many of the natural raw materials we work with come from countries such as China and India, with lockdowns putting strains on supplies. Ten to fifteen per cent of the raw materials used in fragrance come from China – around a quarter for some companies. While China recovers, India’s lockdown presents new challenges – and other countries, like Brazil, may well be next.

Our industry’s highly-skilled perfumers and technicians will always try to find solutions – but we are vigilant to avoid interruptions in the supply of natural raw materials that are valued by consumers.

Downstream, social distancing means that our production facilities and those of our customers cannot operate as normal, even as they do the essential work of supplying ingredients for in-demand cleaning and personal care products.

And as for retail, the supermarkets and pharmacies that sell these products remain open, but fine fragrance sales are badly affected by the dramatic reduction in air travel (and the drop in airport store sales), store closures, less social interaction, and consumers’ personal financial concerns.

Our vital role in the response

In the face of these challenges, I am proud of how the fragrance industry has responded.

We are living up to the status of an ‘essential business’ by providing ingredients that are vital to the production of cleaning, disinfecting and personal care products (fragrance has been shown to encourage product use, therefore maintaining good cleanliness and hygiene – crucial in slowing the spread of COVID-19).

Many members have gone further: there are countless examples of IFRA member companies diverting resources to the production of hydroalcoholic sanitizing gels that are currently so badly needed, especially in hospitals.

And as an Association, we are pooling knowledge, providing resources and modifying programs to help members manage the crisis.

But we need to look to the future too: the economic shock from coronavirus will be large and will hurt. The key is to ensure that we recover as quickly as possible and in a way that turns this crisis into an opportunity for all.

Planning for the post-coronavirus world

During a crisis, it is easy to say that ‘things will never be the same again’. But perspective is needed too in the face of dire predictions. 

The 9/11 terror attacks in 2001 were said to be the end of the airline industry, but by 2004, passenger numbers had gone back to normal. It was claimed that the 2008 financial crisis would change the financial and economic system forever, but the economy and stock markets made an impressive recovery over the past ten years, and arguably the long-term effects seem instead to have taken place in politics.

Nevertheless, we are likely to see the reinforcement of some existing trends.

First, already low-to-inexistent growth is set to remain low. This presents issues for the fragrance sector, like any sector reliant on consumer product sales – particularly when it comes to more ‘luxury’ products like high-value fine fragrance.

Second, the economic nationalism already seen in parts of the world in recent years may well increase. Even globally-minded French President Emmanuel Macron has said his country needs to be less dependent on exports, after experiencing issues with supplies of personal protective equipment during the pandemic.

The fragrance industry relies heavily on the cross-border supply of raw materials and ingredients and the movement of highly skilled professionals. We will be particularly watchful of this trend, particularly in Europe, where Brexit has already loosened links.

It is important to take the right lessons from the crisis: trade, commerce and international movement were not at the root of the virus and have historically been shown to make us all more prosperous and safer. While global travel helped the spread of the virus, we can react better, faster and smarter to periodic health crises without building excessive barriers.

Third, the importance of sustainability will grow – environmental, social and, crucially, economic. The reduction in pollution that results from a fall in economic activity and travel is one of the few bright spots to emerge from the past few months. Coupled with a growing acceptance recently of the ‘climate emergency’, we are likely to see greater efforts to balance environmental and economic sustainability.

Things must move back towards normality – but the pandemic and the ‘lockdowns’ have perhaps taught us all some lessons about the value of our environment, the importance of reducing waste, and considering the necessity of all our actions – something that will then translate into how we do business in a more transformative way.

We will probably also see a greater emphasis on social sustainability. Countries have often taken their own approaches to coronavirus, but there is a need for more solidarity, social cohesion and international collaboration. No single nation can combat this crisis on its own – and viruses do not know economic and political borders.

Finally, we need to take up the specific opportunities that will emerge from this crisis. IFRA will soon launch a joint Sustainability Initiative with the flavor industry organization, IOFI. It is a project that has been years in the making, but whose time has truly come. It will be an important opportunity to highlight our sectors’ commitment to greener sourcing and production, to employee well-being, and to economic sustainability.

Drawing the positive lessons from the pandemic

The renewed value attached to good hygiene, health and cleanliness is undoubtedly a positive lesson from the pandemic – and one where our industry has a unique role to play in supporting and reinforcing good practices – helping people be and feel clean and protected.

Expertise is more valued than ever: after all, a quarter of the world's population or more is staying at home on the advice of experts. As an industry whose work is based on scientific knowledge, a revival of reason is a good thing. We will work to ensure that science is at the heart of policy-making and public debate.

The recovery phase will come. For now, the coronavirus pandemic still rages. It will go on for many more weeks, or likely months. It will, tragically, claim more lives.

But “this too shall pass” – and it’s time to start thinking about how we emerge from this crisis. As the Chairman of IFRA, I would like to underline that our industry is ready to play a role in that discussion – helping to build a post-coronavirus world that works for business, for people and for the planet.