IFF outlines a multi-faceted Scent recovery driven by stabilizing Fine Fragrance demand, normalization of Consumer Fragrance through revamped R&D and go-to-market execution, and a shift toward higher-value Fragrance Ingredients. The firm also details a robust 2027 R&D plan designed to sustain competitive advantage with an strengthened pipeline, leading-edge perfumers, and sustained reinvestment in innovation, aligned to long-term growth and margin expansion.
Generated by Dafinchi AI. Source-grounded AI analysis, not investment advice.
What are the drivers of Scent's recovery, how will Fine Fragrance and Consumer Fragrance evolve in the second half, and what is the plan for R&D to support 2027?
Based on the Scent commentary, recovery is being driven by a combination of: (a) stabilization of Fine Fragrance demand despite Middle East volatility, (b) strengthening momentum in Consumer Fragrance via rebuilding R&D capability and customer go-to-market, and (c) improving/normalizing Fragrance Ingredients performance tied to a shift toward higher-value ingredients.
Management indicates Fine Fragrance is still affected by Middle East uncertainty, but it was managed well in Q2: Fine Fragrance finished slightly positive versus expectations that growth would be down in the mid-single digits coming into the quarter. 1
For the second half, management explicitly frames the recovery as: softer Q3 followed by stronger Q4, with Fine Fragrance expected to be in the mid-single-digit growth range on a second-half basis. 2 They also tie part of the Q3 softness to a large 20% prior-year growth comp (Q3 last year grew 20%), and then expect “recovery as we get to Q4.” 1
Consumer Fragrance is described as being in the low single-digit range for go-forward performance, with Q2 having been a temporary strength: the company saw a really good Q2 at a high single-digit number, and management expects that to normalize to a low single-digit baseline going forward. 2
The underlying “recovery” mechanism appears to be a rebuilding of R&D and commercial execution aimed at market share gains: management states the team has “done a good job on the compounds” and “rebuild the R&D capability [and] go-to-market approach with customers,” with the aim of “drive market share gains.” 2
Within Scent, management attributes part of the strong Q2 to Fragrance Ingredients. In Q2, Scent sales were up 8%, with Fragrance Ingredients growth north of 20%, and they emphasize that this included a favorable year-over-year comparison versus a down 10% or more prior period. 1
They also add that the business leveraged its synthetics portfolio to capture sales “due to the macroeconomic environment,” including supply chain disruptions and higher Brent crude prices—then explicitly state it should “normalize” as conditions settle. 1
For the second half, this is built into expectations: management says Fragrance Ingredients growth will “shift back towards higher value-added ingredients versus traditional synthetics,” and that this normalization is expected to occur over next year and the year after (not as much in the second half of 2026). 2
Management’s R&D plan is described less like a single initiative and more like a capability rebuild with pipeline and delivery systems, intended to strengthen competitive positioning through 2027.
Management reports measurable progress versus prior state: they say that 2.5 years ago the R&D pipeline “was not what it should have been,” but “today” they have a very strong R&D capability and a “great pipeline of molecules as well as delivery systems.” 3
They also highlight “great perfumers” developing “leading-edge new Fine Fragrances and Consumer Fragrances,” indicating the pipeline is intended to translate into product innovation across both categories. 3
The plan for R&D is linked to go-to-market execution: management says they rebuilt R&D capability and the go-to-market approach with customers to drive market share gains in Consumer Fragrance. 2
This matters for 2027 because it implies R&D output is designed to feed commercial traction (not only technical development), with management suggesting that “as we go into next year and the year after,” Fragrance Ingredients will be in a “really strong competitive position.” 2
Across the broader Remainco strategy, management emphasizes innovation as a required investment loop: they note that R&D as a percentage of sales is in the 8% to 9% range and that it is “really important” to continue reinvestment so the company can set itself apart, improve growth, expand margin, and continue reinvestment. 4
This provides the “support 2027” framing: sustaining an innovation-funded structure that underpins competitiveness beyond the near-term normalization.
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IFF's Scent recovery is anchored in a rebuilt R&D engine and stronger go-to-market execution, with near-term tailwinds from fragrance ingredients. 2H 2026 guidance shows Fine Fragrance accelerating into Q4 while Consumer Fragrance normalizes to low single-digit growth, as Middle East volatility subsides. The 2027 plan focuses on a robust pipeline and higher-value ingredient mix to sustain competitive advantage.
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Research questionWhat are the drivers of Scent's recovery, how will Fine Fragrance and Consumer Fragrance evolve in the second half, and what is the plan for R&D to support 2027?
Answer outline
IFF attributes Scent’s rebound to a rebuilt R&D engine, stronger perfumers, and improved go-to-market execution, while guiding a softer Q3 and stronger Q4 for Fine Fragrance and a normalized low single-digit path for Consumer Fragrance in 2H. The company also emphasizes an expanded R&D program—molecules, delivery systems, and higher-value ingredients—to sustain growth into 2027.
Sources used
Research questionWhat are the drivers of Scent's recovery, how will Fine Fragrance and Consumer Fragrance evolve in the second half, and what is the plan for R&D to support 2027?
Answer outline
IFF's Scent recovery hinges on a strengthened R&D pipeline and a revamped go-to-market strategy, with Consumer Fragrance poised for market-share gains while Fine Fragrance navigates regional volatility. The company frames 2027 as a natural extension of its enhanced R&D capabilities, with a shift toward higher-value, natural ingredients and sustained innovation to support growth in the second half and beyond.
Sources used
Research questionWhat are the drivers of Scent's recovery, how will Fine Fragrance and Consumer Fragrance evolve in the second half, and what is the plan for R&D to support 2027?
Answer outline
IFF outlines a multi‑driver path to Scent recovery, led by Fragrance Ingredients momentum, improved Consumer and Fine Fragrance execution, and an R&D overhaul aimed at 2027. In 2H, Fine Fragrance is expected to be softer in Q3 and stronger in Q4, while Consumer Fragrance normalizes from a high single-digit Q2 growth to a low single-digit trajectory, supported by a revamped product pipeline and go‑to‑market strategy.
Sources used
Research questionWhat are the drivers of Scent's recovery, how will Fine Fragrance and Consumer Fragrance evolve in the second half, and what is the plan for R&D to support 2027?
Answer outline
IFF outlines a Scent recovery led by stronger Fragrance Ingredients, stabilization in Fine Fragrance, and a rebuilt Consumer Fragrance engine anchored by R&D and go-to-market improvements. The 2H 2026 path points to a Q3 softness followed by a Q4 rebound, with a longer runway toward 2027 supported by an 8–9% R&D intensity and a strengthened innovation pipeline.
Sources used
Research questionWhat are the drivers of Scent's recovery, how will Fine Fragrance and Consumer Fragrance evolve in the second half, and what is the plan for R&D to support 2027?
Answer outline
IFF outlines a Scent recovery led by strong Fragrance Ingredients growth and a rebuilt R&D engine, with a mid-to-long-term plan to enhance market position into 2027. In H2, Fine Fragrance is expected to soften in Q3 and rebound in Q4, while Consumer Fragrance trends toward low single-digit growth as R&D and go-to-market initiatives support share gains.
Sources used
Research questionWhat are the drivers of Scent's recovery, how will Fine Fragrance and Consumer Fragrance evolve in the second half, and what is the plan for R&D to support 2027?
Answer outline
IFF attributes Scent’s rebound to robust Fragrance Ingredients growth and an improved R&D pipeline, with plans to support 2027. Fine Fragrance is expected to be softer in Q3 and stronger in Q4, while Consumer Fragrance normalizes to a low single-digit growth profile.
Sources used
Research questionWhat are the drivers of Scent's recovery, how will Fine Fragrance and Consumer Fragrance evolve in the second half, and what is the plan for R&D to support 2027?
Answer outline
IFF's Scent rebound in Q2 2026 rests on normalization of Fragrance Ingredients, resilient Fine Fragrance execution amid Middle East volatility, and a rebuild of R&D and go-to-market for Consumer Fragrance. Management signals a mid‑single‑digit H2 for Fine Fragrance and low single-digit growth for Consumer Fragrance, underpinned by an improved R&D pipeline and a long-term push into 2027 with higher-value ingredients and delivery systems.
Sources used
Research questionWhat are the drivers of Scent's recovery, how will Fine Fragrance and Consumer Fragrance evolve in the second half, and what is the plan for R&D to support 2027?
Answer outline
IFF's Q2 results underscore a resilient Scent recovery driven by double-digit Fragrance Ingredients growth and solid Consumer Fragrance momentum, with a rebuilt R&D pipeline set to support growth into 2027. In the second half, Fine Fragrance is expected to soften in Q3 and rebound in Q4, while Consumer Fragrance normalizes to a low single-digit pace as R&D and go-to-market improvements support market share gains.
Sources used
Research questionWhat are the drivers of Scent's recovery, how will Fine Fragrance and Consumer Fragrance evolve in the second half, and what is the plan for R&D to support 2027?
Answer outline
Management attributes Scent's rebound to a rebuilt R&D engine and stronger go-to-market execution, with 2H expected to show mid-single-digit growth for Fine Fragrance and low-single-digit gains for Consumer Fragrance, while Fragrance Ingredients normalizes. The plan emphasizes sustained R&D investment around 8-9% of sales to support a pipeline of molecules, delivery systems, and innovative products through 2027.
Sources used
Research questionWhat are the drivers of Scent's recovery, how will Fine Fragrance and Consumer Fragrance evolve in the second half, and what is the plan for R&D to support 2027?
Answer outline
IFF outlines a Scent recovery led by stronger Fragrance Ingredients, a cautious but improving Fine Fragrance trajectory through Middle East volatility, and a Consumer Fragrance rebound driven by rebuilt R&D and go-to-market capabilities aimed at market-share gains. The plan emphasizes a multi-year R&D rebuild, a deep pipeline of molecules and delivery systems, and an innovation-first path to 2027 and beyond.
Sources used
Research questionWhat are the drivers of Scent's recovery, how will Fine Fragrance and Consumer Fragrance evolve in the second half, and what is the plan for R&D to support 2027?
Answer outline
IFF attributes Scent's rebound to Fragrance Ingredients momentum, with Fine Fragrance stabilizing amid volatility and Consumer Fragrance propelled by an R&D-led recovery and go-to-market rebuild. The company expects a mid-single-digit 2H for Fine Fragrance and a low single-digit pace for Consumer Fragrance, supported by a strengthened R&D pipeline targeting 2027.
Sources used
Research questionWhat are the drivers of Scent's recovery, how will Fine Fragrance and Consumer Fragrance evolve in the second half, and what is the plan for R&D to support 2027?
Answer outline
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