With the modern day consumer willing to experiment, seeking innovation and adventure, the concept of brand loyalty has become obsolete, according to Rishabh Kothari, Vice President, Fragrances and Flavours Association of India (FAFAI). In an interview to Cosmedic India, Rishabh stresses on the need for companies to become modern in their outlook as well as in the processes and practices they follow. Excerpts of the interview
Please tell us a bit about FAFAI’s early days.
FAFAI is a very old trade association. A few manufacturers, importers and traders from Mumbai that were active in the perfumery business used to meet each other informally. The idea of forming an association to protect the economic, commercial and trade interests of the community, originated in one such meeting.
On July 15, 1949, 55 firms in Mumbai were invited to attend a meeting on July 23, 1949, to consider a proposal to form a trade body. The association was formed on the same day to represent and protect the interests of perfumery raw material businesses. On August 30, 1949, the Memorandum and Articles of Association were passed and Mr. K.H. Dhamdhere was elected as the first President and Shri Keshavlal Bodani and Shri Kantilal N. Shah as the first Secretaries of the association.
What are the various types of businesses in the flavours and fragrances industry? What is the sector’s relationship with cosmetics?
The flavours and fragrances sector encompasses a host of businesses including ingredient distillers, processors, manufacturers, blenders, consultants, and scientists. In addition to R&D divisions of manufacturers, the standalone research and technical services laboratories also assist businesses with the product- and process-specific innovations. Lastly, there are distributors (wholesalers), traders and the retailers who sell the finished products.
The sector’s common linkage with the cosmetics industry is primarily the fragrances. Many cosmetic product manufacturers use fragrances produced by fragrance manufacturers as ingredients in their cosmetic products such as perfumes, deodorants, and soaps. Many of these fragrances are free from alcohol.
What role did the association play initially and how has it changed over the years?
Started as an association of perfumery raw materials manufacturers and traders, FAFAI will be completing 70 years next year. In its early days, the association fought for the common issues that its members faced pertaining to sales tax, railway goods booking, Bombay Shops and Establishments Act, 1948, and imports. FAFAI’s current membership strength is 805. The association’s scope of activities has been broadening of late with the association helping its members address many new issues.
What are the issues that the industry is facing today?
Fragrance Industry is an ancillary industry. Our products are used by other industries to make their products. Consider an example of a manufacturer of citronella oil. This product has applications in both, industrial as well as consumer sector. It can be used as a raw material for making perfumery chemicals like citronellal, citronellol, and geraniol. The manufacturers of these chemicals sell their products to soap, candles, cosmetics, and flavouring industries. Due to its antifungal properties, the same product is also used for applications such as for repelling insects, to heal insect bites, or even for pain and stress relief. There are issues with respect to differentiated taxation based on its application. We have been following up with the government to get this issue addressed.
What do you see as customer-driven trends in the market?
There has been a gradual rise in the awareness of ecologically sustainable products. Consumers are much more adventurous now and willing to experiment. Selecting one brand and sticking to it for eternity has gone—brand loyalty does not exist anymore. Consumers are inclined towards organically produced ingredients nowadays. There is a niche audience for organic, natural and cleaner fragrances. Natural, organic and eco-friendly are the latest buzzwords. It is a worldwide trend. The changing mental makeup of the consumer is the biggest trendsetter.
What are the new initiatives of FAFAI in this context?
Rishabh Kothari: FAFAI continues to fight issues such as taxation, counterfeits, or providing legal assistance and guidance to members whenever needed. Recently we made a representation to the government to introduce an anti-dumping duty to curb the rampant influx of cheap parallel imports into India from China and other places. To provide a platform for our members and the industry at large, we will also be organising our exposition.
Please tell us about the expo a little more in detail.
FAFAI will be organising the country’s most relevant B2B exposition targeted at fragrances and flavours industry in India’s spice capital, Kochi. The Expo will have about 110 exhibit areas where top international and Indian companies will showcase their specialities. We are expecting the delegates from countries such as Israel, France, Italy, USA, UAE, Spain, Switzerland, UK, Belgium, Singapore, Japan, Germany, Turkey, The Netherlands, Indonesia, Hungary, Vietnam, and Sri Lanka. We are expecting 1,200 delegates for this show.
In addition, there will be a seminar to help the business community to interact, share knowledge, resources and provide future and upcoming trends to the industry. It will provide an ideal platform to help forge new relations, renew old associations, share information, scale new challenges and grab new opportunities.
What are the various trends that you see will impact the industry?
We are living in an eventful time. Things are changing very fast. There are several trends unique to our current times that will also impact our industry in the near future. For instance, with rising competition and advancements in technology, it has become critical for manufacturers to adopt automation to bring efficiencies in production. Several natural products are becoming either costlier or are short in supply today. As an industry, we will have to invest in research and innovation to identify appropriate substitutes for such products. Lastly, laws are becoming stricter by the day. Many of our members are into exports business. The laws not just in India but also all over the world will need to be taken into consideration for their potential impact on business, going forward.