International Flavors and Fragrances Expands in China with Shanghai Creative Center

International Flavors and Fragrances Inc. (IFF) has unveiled its latest venture, the Shanghai Creative Center, a significant renovation and expansion project near Hongqiao Airport in Shanghai. This 172,000-square-foot facility is IFF’s largest in Asia and is designed to be fully integrated with all of the company’s business sectors, including food ingredients, flavors, scents, health, and biosciences.

China is currently the second-largest market for IFF, and this new center is a strategic move to capitalize on the growing demand for fine fragrances in the region. The center features a sensory science center, a scent creative center, and more than 20 labs dedicated to fragrance creation, design, product analysis, and consumer insights.

One of the standout features of the new center is the “Digital Cube,” a 360-degree multisensorial digital space designed for livestreaming and hosting workshops. This innovative space is part of IFF’s broader strategy to invest heavily in the fine fragrance segment, which has seen accelerated growth in recent years.

“Two years ago, we made the decision to invest and invest heavily, meaning that we wanted to have a space fully dedicated to fine fragrance,” said Sabrya Meflah, president of IFF’s Fine Fragrance business unit.

— Sabrya Meflah

Meflah highlighted the significant demand for fine fragrances in China, noting that in 2024 alone, 100 new brands entered the local market. Despite this growth, the fine fragrance market in China has only a 3 percent penetration rate, largely driven by the gifting sector. Meflah explained that the shift from gifting fragrances to wearing them has not yet fully occurred, especially among younger demographics.

“The shift from giving fragrance as a gift to wearing it hasn’t fully happened yet, especially among Millennials,” Meflah explained.

To stay relevant in the local market, IFF has taken several strategic steps. The company recently hired its first China-based perfumer, Gwen Gao, a Taiwanese who received her training at The Grasse Institute of Perfumery. Additionally, Tanguy Guenest, another young “nose,” recently completed a six-month exchange program in Shanghai. These hires are part of IFF’s effort to foster a collaborative environment where local creatives and IFF perfumers can work together.

“We want to have the same kind of creative energy as our Atelier du Parfumeur creative center in Grasse, where our perfumers and local creators can collaborate with each other and where we can collaborate with brands,” added Meflah.

— Sabrya Meflah

IFF is also advocating for locally produced ingredients, such as osmanthus and magnolia, which are known for their citrusy and green notes. The magnolia, primarily produced in southern China, is a key ingredient in many of IFF’s fragrances. The company works with local organizations and suppliers to promote the preservation of rare magnolia species and ensure ethical practices. This initiative aligns with a growing global trend towards sustainability and ethical sourcing, similar to movements seen in the U.S. with brands like Patagonia and The Body Shop.

In terms of market trends, IFF has identified “fragrance with benefits” as another opportunity. Meflah cited the “China Scent Exploration program,” an AI and cultural insights-driven initiative, which found that legacy and “China pride” are very important to Chinese consumers. This trend is not unlike the growing interest in heritage and cultural pride seen among U.S. consumers, who are increasingly seeking out products that reflect their personal and cultural identities.

“We know that for the Chinese consumer, legacy is very important, as well as ‘China pride’,” explained Meflah.

— Sabrya Meflah

IFF also identified a need to discover new cultures via scents. Meflah highlighted the success of brands like Amouage, which preserve the uniqueness of their cultural heritage through fragrances. This trend towards cultural exploration through scents is a global phenomenon, with fragrance houses around the world, including those in the U.S., increasingly incorporating cultural and historical elements into their products.

As IFF continues to expand its presence in China, the Shanghai Creative Center serves as a testament to the company’s commitment to innovation and cultural integration. The center not only enhances IFF’s ability to meet the growing demand for fine fragrances but also positions the company as a leader in the global fragrance industry. With its focus on sustainability, cultural preservation, and ethical practices, IFF is setting a new standard for the industry, both in China and internationally.