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Open Innovation in the Fragrance Industry 


For several thousand years, fragrances have touched human being’s lives. With the industrialization of the fragrance industry in the 19th century, a broad consumer base has been empowered to express themselves every day and to create unique life experiences in many ways. 

Today, around 3.000 aroma ingredients are used in fragrance formulations. More than enough for perfumers in the world to create any olfactive experience desired. Nevertheless, the search for new aroma ingredients complementing the perfumers’ pallet continues. 

But developing and launching new aroma ingredients is a risky, highly regulated and time-consuming process: 

  • The Substantial risk and investment in R&D stage is managed by applying a stage gate process managed and governed by cross-functional teams; targeted molecular design and derivatization of lead structures aim at risk reduction. 
  • Product safety and regulatory approval requirements are taken into consideration at the earliest possible stage of the R&D process; still, fulfillment of testing and regulatory regimes around the world takes time and bears additional risk. 
  • Acceleration of new aroma ingredient volume growth by applying cross-functional material steering teams further reduces risk. 

Very few companies have the capabilities required and the financial strength to be in this business by themselves. Large players usually justify research programs for new aroma ingredients with margins from their formulation businesses. Considering the capabilities and investments required as well as associated risks, access to new aroma ingredients is limited to a few global players. There could be an alternative way to identifying new aroma ingredients through leveraging the skills of more players in the fragrance industry. 

In addition to structured research for new aroma ingredients by the few, one could also apply a structured screening approach of the millions of substances at the hands of the chemical industry. Applying methods of computational science using meaningful descriptors and state-of-the-art algorithms may result in valuable structure-response relationships for a typification of such substances. Important parameters of a molecule like the odor profile, stability in application or the toxicological profile could be judged even before a single gram of the material has ever been synthesized by a chemist. A key to precise predictions is a profound database, in quality, as well as in quantity. This novel approach would substantially reduce risk and time-to-market; the regulatory approval process would turn into the critical path. 

An open innovation approach for aroma ingredients could result in an ecosystem accelerating the innovation and scale-up process of new aroma ingredients. This could be realized by leveraging the key capabilities of (including, but not limited to) chemical companies, Flavor & Fragrance houses, independent research companies and independent perfumers. In this time and age, speed and collaboration determine successful differentiation in the market place. The objectives of such an ecosystem should be (I) to further drive standardization of the perfumer’s pallet where cost optimization is key and (II) to create opportunities for differentiation of consumer brands where consumers are willing to pay.

For the reasons stated above, BASF’s Aroma Ingredients business works on creating a fragrance innovation ecosystem. We are excited to explore new opportunities and work with our partners on the verification of the above alternate innovation approach. We will keep you posted.

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