III. Industry Analysis
Over the past five years the Perfume industry is expected to grow at an annualized rate of 1.9%. The industry will be driven by the following factors:
- The trade-weighted index (TWI), which measures the strength of the US dollar against the currencies of the country’s major trading partners, is forecast to contract, enabling more overseas consumers to afford US-manufactured goods and support industry exports.
- The rapid shift of both consumers and businesses to digital channels enabled industry operators to gain more insights on their consumers’ behavior. E-commerce will likely remain an important resource for industry operators to retain clients and create customized product offerings.
- Industry operators are expected to continue incorporating more responsible sourcing and sustainable packaging to appeal to conscious consumers. Many operators are reformulating their products to include all-natural ingredients and altering their manufacturing processes to eliminate environment-harming steps. Moreover, operators will likely invest more in emphasizing how synthetic and biotechnological ingredients can be sustainable while also being safe for long-term use.