Fragrance Policy Drivers in the USA and Canada

Paper presented at the IFEAT International Conference in Barcelona, 6 - 10 November 2011 ‘Spain: Bridging Continents and Cultures’ Pages 185-194 in the printed Conference Proceedings.

FRAGRANCE POLICY DRIVERS IN THE USA AND CANADA Jennifer Abril Executive Director IFRA North America Washington D.C, USA jabril@ifrana.org INTRODUCTION This paper was requested by the conference organizers to give a sense of the policy drivers in the USA and Canada, and how these are affecting the fragrance industry and how the industry is responding.

It probably makes sense to first mention what IFRA North America is and what it does. Until last year, it was the Fragrance Materials Association of the USA. It is based in the Washington DC area and represents approximately 50 companies engaged in the manufacturing and sale of fragrances and fragrance ingredients. The association is charged with representing the industry in the USA and Canada in public affairs, advocacy, regulatory compliance assistance, and industry affairs. Its members encompass both multinational fragrance houses as well as family-owned essential oils traders.

From the North American perspective, it actively coordinates with both the Research Institute for Fragrance Materials (RIFM) and IFRA global. It also liaises with government authorities and customer associations in this region. Conference delegates will know that the union of these three entities has the sole purposes of assuring the safety of fragrance materials and scented products and protecting the health of consumers. It is strongly believed that this is the only way to fulfill the mission of the organization to support free global commerce and the well-being of the business interests of the members.

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How is the mission fulfilled against the backdrop of the challenging times that Dr. Sean Traynor examined in his IFEAT 2011 conference paper The regulatory challenges ahead for fragrance raw material suppliers? By focusing on advocacy and communications, in other words: • • • •

To our members and to our clients: we bring safety to your business, we protect your intellectual property and confidential business information.

To authorities: we are a responsible, self-regulating industry.

To the public, the media: we are a professional, reliable and transparent association.

To consumers: fragrance has an important social role in our collective well-being.

CHALLENGES IN THE USA AND CANADA As one of IFRA NA’s Board members recently put it, “Our industry is at a point of reflection.” From IFRA NA’s point of view, the policy environment in which this industry operates in the US and Canada is very fluid. The greatest challenges concern over-regulation and threats to intellectual property (IP). Moreover, these two challenges are compounded by a growing anti-fragrance sentiment – as illustrated by Sean Traynor’s paper.

Overregulation IFEAT members will know all too well the struggles of being in global trade but falling under the laws of local jurisdictions. Global sourcing and global formulas must meet regional regulations and laws which vary. Regulatory compliance is burdensome, especially for small players. And things are about to get more complicated.

This slide illustrates just a few of the hot issues currently on the IFRA agenda in the USA and Canada. It is this chaos that keeps our government affairs staff up at night, especially because negative developments in any one of these policy initiatives will have profound implications for the members.

Of note is the debate surrounding federal chemicals management reform. Suddenly, after being considered the model for chemicals policy, the United States is being challenged both inside and out for being too weak and industry-friendly. The safety of everyday consumer products is questioned because of this perceived weakness and fragrance ingredients – including essential oils – are swept into this controversy. The reason for this is that natural oils are no longer accepted as a whole but rather are broken down into their individual constituents and required to be tested as such.

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As can be seen from the list, the challenges are not limited to the federal level. Individual states, led

by California, are ripe with their own proposals. More and more, each seems to be trying to “outsafety� the others.

Challenges to Intellectual Property and Ingredient Safety Sean Traynor did a wonderful job explaining this subject in his talk. All that needs to be added is that, in many cases, the debate over right-to-know and transparency is intimately linked with the safety of individual ingredients within protected formulas – for example, allergens, carcinogens, and endocrine disruptors, to name a few. The pressures on ingredient disclosure are ultimately impinging on the breadth and variety of materials perfumers are able to create with. It does not end there: in order to keep materials on the palette, the industry is being forced to demonstrate assurance of their safety.

For IFRA NA, this does not always come by way of additional scientific testing through RIFM, rather through IFRA NA-led advocacy, outreach, and education about existing industry safety programs. In addition to earlier mentioned policy matters, IFRA is also busy fighting IP related proposals.

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Not all of the policy challenges covered stem from grassroots or consumer concerns.

Many are engineered by anti-fragrance activists who are questioning the safety of specific ingredients as well as industry secrecy. Their motives vary from fundraising purposes to ideological agendas to imposing lifestyle choices.

But their common cause is to affect a change for this industry.

These pressure groups vary in size and influence, yet collectively manage to generate a drumbeat of negative press both in mainstream media and online.

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The slide below considers the online space. There is actually some good news here. Even though the critics are internet-savvy and use social media to spread their messages, as can be seen from the chart, the negative volume (blue line) is hardly registering compared to fragrance promotional and marketing messaging (red line). However, when negativity is brought up, the themes are safety-related, some of which like allergens, phthalates, sensitizers, and the like, were identified previously.

Continuing about the online space, earlier this year IFRA NA commissioned an internet landscape analysis. Here are some of the findings: • • • •

90% of issues discussion takes place on blogs, 1% in mainstream media.

On blogs, 60% took place on product review blogs, “use product x, it doesn’t have dangerous toxics like product y.”

20% on environmental and health blogs, where phthalates, reproductive health and allergens were most often repeated Mommy bloggers, accounting for 15% of blog conversations, were almost unanimously concerned with fragrances in baby shampoo and laundry detergent

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All this chatter puts pressure on IFRA customers who are increasingly attempting to respond with consumer-friendly programs. Marketers feel compelled to differentiate their products based on safety and alleviate criticisms in a variety of ways – from all-natural green claims to posting company palettes of fragrance ingredients on websites, yet further straining the industry.

FACING THE CHALLENGES HEAD-ON It is not an easy world to live in. To face the challenges to the fundamentals of the industry’s business model and its reputation, IFRA North America updated and upgraded its advocacy and communications programs, guided by the Board and with the support of IFRA global. And it is also starting to venture into territories new to this industry: educational animated films, online outreach, and social media.

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The IFRA video about how fragrances are made, headlined as “Making Scents”, is available on YouTube at http://www.youtube.com/watch?v=zMv--7X4EAk&feature=mfu_in_order&list=UL}

The full video and the upcoming next film can be seen on IFRA NA’s YouTube channel.

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IFRA is also Facebook‌

on

And on Twitter‌ IFRA is learning about this new world of two-way communications and dialogue with its followers, helping it test messages as well as share ideas.

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IFRA’s entry into the new media space has exposed it to a new world of influencers, among them perfume bloggers, cultural commentators, pro-industry advocates, and others. It is recruiting new friends and building advocacy alliances to echo the fragrance industry’s positions and messages.

IFEAT members are encouraged to join the conversation: follow IFRA on Twitter, “like” it on Facebook, and visit it on YouTube.

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LOOKING TO THE FUTURE Summing up, IFRA research and experience shows that there is still enormous good-will and popularity for fragrances in general and for naturals and organics, in particular, especially in North America. This should translate into healthy demand for essential oils – the products IFEAT members’ trade in. Just one final thought: be prepared for continued uncertainty in US and Canadian markets until safety oversight and labeling initiatives stabilize.

Jennifer Abril is Executive Director of the International Fragrance Association, North America (IFRA NA). She is responsible for strategic and operational management of the trade association and also oversees the development, coordination and implementation of all its policy and communications objectives. She has served the fragrance industry since 2008 when she was appointed Executive Director of the FMA then managed by The Roberts Group.

Under her leadership, the FMA left the managed services environment and established itself as an independent entity in 2011. She has held a variety of trade association and consulting posts in the Washington, DC area. For over a decade she served the broader chemical industry in positions of increasing responsibility, first joining the American Chemistry Council (ACC) to lead advocacy efforts for regulatory harmonisation across key global markets. Later, at SOCMA (Society of Chemical Manufacturers & Affiliates), she was responsible for the development and implementation of ChemStewards®, SOCMA’s environmental, health, safety and security program. Before joining the chemical industry, she was an account executive in a lobbying firm, where she specialised in international trade and commerce, regulatory reform, and environmental affairs. Jennifer holds a B.A. in International Studies from The American University and a Masters in Management from the University of Maryland. She lives in Maryland, USA, with her husband and two sons.

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