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COTY (Burberry, Gucci, CK) on the “Clean Perfume” Movement | 2023

Coty Burberry Clean Perfume Movement
We look at COTY's most recent reports to see what, if anything, they say on the clean perfume movement.

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Insight into Publicly Traded Perfume Brands - 2022 Annual Reports

When it comes to all the major players in the perfume world, there are two major categories. Perfume brands that are privately-owned and perfume brands that are publicly-owned. 

Publicly-owned companies, also known as public companies, have a greater degree of responsibility to their shareholders and the general public compared to private companies. This is because they have sold shares of ownership in the company to the public, and are therefore subject to regulatory requirements and financial reporting obligations. Public companies have a legal obligation to act in the best interest of their shareholders and provide them with accurate and timely financial information, and may be subject to additional scrutiny from regulators and other stakeholders. Private companies, on the other hand, have more freedom to operate as they see fit, as they are not beholden to shareholders or required to publicly disclose financial information.

So what does this mean? Any perfume brand that is owned by a public company must disclose certain information to the public. This is done in various ways, including an “Annual Report”. There’s a lot of good information to be gleamed from these Annual Reports. They are often hundreds of pages long, but don’t worry, we read them for you and pulled out all of the best information related to perfume and the clean perfume movement, and summarized it below.

Even though there’s a ton of perfume brands, fewer are owned by publicly-traded companies. And these public companies own many perfume brands.

 

Coty

We read through COTY’s Annual Report for 2022. We also found a lot of great information in their 10-Q Statement (a quarterly report) and Quarterly Press Releases.

Here’s the highlights when it comes to perfume:

Perfume Brands Owned by Estee Lauder

Coty owns the following perfume brands. They categorize them by “Consumer Beauty” & “Prestige”:

Consumer Beauty

  • Adidas
  • Beckham
  • Nautica

Prestige 

  • Burberry
  • Calvin Klein
  • Chloe
  • Escada
  • Gucci
  • Hugo Boss
  • Kylie Jenner
  • Marc Jacobs
  • Philosophy

COTY on the Clean Perfume Movement

Coty did not say much regarding the “clean perfume movement” in their Annual Report (or Quarterly Report).

Unlike other brands (like Estée Lauder, which own perfume brands like Tom Ford & Le Labo), there was no significant mention or details related to:

  • green chemistry
  • ingredient transparency
  • responsibly-sourced ingredients
  • environmentally sustainable products

However, Coty publishes a separate “Sustainability Report” which covers these topics and more. There is no specific mention of “clean perfume” ingredients, but they do talk about “Clean Beauty”:

“For Coty, clean beauty means developing efficient formulas that use the minimal ingredients necessary to deliver superior performance, without compromising on safety. We recognize that consumers want to know more about what is in their products, while also having the freedom to make product choices based on their ingredients. We respond to this demand through our clean program. Coty scientists monitor scientific literature, retailer clean programs and the wider consumer and regulatory landscapes to inform ingredient choices for our clean products. Our program is designed to be dynamic and updated as the expectations of our consumers and retailers evolve. The clean program goes above and beyond current regulatory requirements.”

Brands/products that fall under the Coty Clean program include the following: CK Everyone, Sally Hansen Good.Kind.Pure, COVERGIRL Clean Fresh Collection, Rimmel Kind & Free, as well as the Lancaster Sun Sensitive range. 

Click here to view the COTY FY 22 Sustainability Report

Interesting Perfume Facts from the Quarterly Report

The following information came from the quarterly report (10-Q) for the period ending September 2022 (we underlined parts of greater interest):

  • Net revenues in our Prestige segment remained relatively flat, benefiting from the positive performance in the prestige fragrance category due to the continued success of fragrance brands such as Gucci, Burberry, and Calvin Klein
  • In the three months ended September 30, 2022, net revenues from the Prestige segment decreased 1%, or $7.3 to $863.4 compared to $870.7 in the three months ended September 30, 2021, reflecting a negative foreign currency exchange translation impact of 8% and a decrease in unit volume of 3%, partially offset by a positive price and mix impact of 10%. This decrease in net revenues primarily reflects:
    • (i) lower net revenues related to Tiffany due to less innovation in the current fiscal period, the impact of the lockdowns in China and our wind down of Russia;
    • (ii) lower net revenues for the Lacoste brand in the current quarter, which was primarily due to our wind down of Russia; and
    • (iii) lower net revenues in the prestige makeup category impacted by a decline in Gucci travel retail sales in the Asia Pacific region as a result of the lockdowns in China. These decreases in net revenues were offset by:
      • (i) the continued success and growth of prestige fragrances, specifically Gucci Flora, Burberry Hero and Her, and Chloe Atelier des Fleurs; and
      • (ii) an increase in net revenues due to positive pricing impact as a result of global price increases and an overall premiumization strategy.

The following information came from the Quarter 2, FY 2023 Press Release (we underlined parts of greater interest):

  • During the quarter, consumer demand for beauty products, particularly prestige fragrances, remained robust
  • Coty’s Prestige revenue and sell-out growth continued to be constrained by industry-wide component shortages stemming from accelerated fragrance demand
  • During Q2, the Prestige fragrance category across North America and Europe continued to experience strong demand, though this constrained by the industry’s shortage of glass and certain other components.
  • Coty’s key fragrance launches reached top positions, with Burberry Hero EDP ranking as a Top 3 innovation, Boss Bottled Parfum a Top 2, and Gucci Flora Gorgeous Jasmine as a Top 3 innovation in most key markets.
  • As stated before, the “fragrance index” remains in full force, as consumers turn to fragrances as mood-boosting and affordable luxuries in an uncertain environment.
  • In Prestige, we continue to grow the fragrance category and premiumize our portfolio through our brands’ iconic pillars and market-leading premium launches, such as Burberry Hero and Her, Gucci Flora Gorgeous Jasmine and Gorgeous Gardenia, Boss Bottled Parfum and Chloe Atelier des Fleurs.
  • Importantly, Coty’s recent innovations of Burberry Hero EDP and Burberry Her Elixir De Parfum, Hugo Boss Bottled Parfum, and Gucci Flora Gorgeous Jasmine continued to deliver very strong performances during the quarter, reaching top ranks across key markets.
  • On December 20, 2022 Coty and HUGO BOSS announced the renewal of their license agreement, which has now been extended beyond 2035, and includes all BOSS and HUGO fragrances for men and women.
  • On December 21, 2022, Coty announced the sale of its Lacoste fragrance license back to Lacoste by mutual agreement

Overall Thoughts

We’re sad to see that Coty barely mentions the clean beauty movement. It’s not looking promising that we’ll see a major shift any time soon of perfumes with clean ingredients under the Coty umbrella. 

It’s interesting to see the business side behind Coty’s perfume brands. There is a high demand for prestige perfumes, even in times of economic uncertainties. As Coty states, “consumers turn to fragrances as mood-boosting and affordable luxuries in an uncertain environment.” The brands and specific perfumes mentioned above are also very telling of trends and what’s popular.

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