Long-lasting distinctive scents and rapid production turnaround has enabled British fragrance house CPL Aromas to outclass most of its competitors. Key to these strengths has been the company’s global presence through its creative centers, where perfumers develop new fragrance formulas to supply the cosmetics, toiletries and personal care markets.
“What an Emirati or a French or an American person thinks vanilla smells like is very different. The same applies to oud and other fragrances. That’s why we’ve got perfumers locally,” Chris Pickthall, CEO of CPL Aromas said.
Born to a family of perfumers, Pickthall has been running the business with his brothers Nick and Francis for the past 20 years. The company’s first overseas expansion was into Hong Kong, which remains their biggest division today.
While CPL remains a family-run business, it is now the largest fragrance-only company in the world, serving over 100 countries from 17 locations. And from its humble beginnings in the ‘70s, it has expanded from a team of three people to roughly 600.
“Running a business is a bigger responsibility, but at least we’re not relying on others. We take the decisions and we stand by them,” Pickthall said.
UAE entry
It was only a matter of time before CPL would enter the UAE, where fragrance is ingrained in the culture.
“We’d been traveling to Dubai since the [mid-1990s] and had a great customer base there. Locals love fragrance and understand it. And because it’s part of our business model to put down roots where our customers are, we set up a company in 2005 via an acquisition of a small competitor. That provided us some basis together with our local customers,” Pickthall said.
According to Euromonitor International, the UAE’s fragrance market was valued at AED 2.34 billion (USD 637.1 million) in 2016, with a growth rate of 3% year on year. Between 2016 and 2021, the market is expected to grow at 2% annually, reaching AED 2.5 billion (USD 680.7 million).
One of CPL’s biggest UAE investments in recent years was the establishment of its first fragrance manufacturing facility in the Middle East in 2015. The 10,000-square-meter factory in Jebel Ali radically changed the company’s offering, cutting its lead time from a few weeks to three to four days and saving it from importing thousands of raw materials. Today, CPL has four production facilities – in Colombia, Hong Kong, the UAE and the UK, in addition to creative centers in most of its markets.
And while the top fragrance houses in the world cater to FMCG groups, CPL focuses on the companies just below the ranks of these giant manufacturers, such as emerging multinationals and local brands.
“That’s a niche we’ll stick with,” Pickthall highlighted.
Pioneering technology
With fragrance users continuously looking for bespoke creations, CPL heavily invests in research and development. Among its most successful innovations is AromaCore, a patented fragrance encapsulation technology that has revolutionized the industry, thanks to its ability to deliver long-lasting fragrance performance.
“The UAE loves fragrances so it’s a constant challenge for our perfumers to create new scents that will excite local consumers. We’ve now got a range of captive ingredients called AromaFusion, which no other company in the world has. The market is so competitive, and brands want to avoid being copied by others,” explained Pickthall.
Over the last seven years, CPL has invested more than USD 20 million (AED 73.5 million) in its inventory and employees in the Middle East. And in 2017, it launched two fragrance-research centers in the UK and Indonesia with a total cost of GBP 2 million (AED 9.6 million). While all these investments were self-funded, it took years for CPL to reach this level of financial independence.
“When I stepped in as managing director, the company wasn’t well funded. We worked extremely hard to get ourselves into a position where we weren’t relying on banks. For the last 10 years, we’ve had no debt and have grown strong from our own resources. We built a factory in Dubai, opened an office in India, expanded around the world and invested in technology,” Pickthall said.
In fact, CPL has been giving back to communities as well. It built a school in Sudan, set up solar power systems in Kenya, and established the College of Fragrance for the Visually Impaired with the Blind Persons Association in India.
Should the need for finance arise, CPL may consider raising funds from a conventional bank or through private equity.
“Right now, the company is 100% owned by the family. This allows us to have consistency in decision making without the influence of outside partners,” Pickthall added.
Next moves
As a British group supplying almost every country in the world, CPL is exposed to various developments, including currency valuations and the UK’s prospective withdrawal from the European Union.
“Brexit is a huge matter for us. We have a UK factory supplying Europe, and the UK is probably going to be out of Europe in a couple of years. That’s a challenge for us, because we don’t know what the rules will be if that happens,” said Pickthall.
With digital technology disrupting every industry, CPL has initiated its own research into digital trends in fragrance. Taking an unconventional approach, the company gathered 10 of its brightest millennials and invited them to challenge its business model in a brainstorming session that excluded senior management. The result was fantastic insights into the preferences of younger consumers.
“Wherever you set up, you can’t do everything yourself or be everywhere all the time. You’re recruiting people whom you have to trust to manage and develop your business. So it’s about striking that balance. If you get this relationship right, the company will grow,” he noted.
He also advises new entrepreneurs to focus more on cash flow rather than profits, and to keep expenses as low as possible whilst growing.
“If you’ve got low expenses, you can make a few mistakes and get away with them,” he said.
