Scent Tech Synergy: AI and the Future of Fragrance Creation

Trends Agency

As innovation in fragrance accelerates, beauty and wellness brands are turning to artificial intelligence to help transform how scents are created, tested and scaled. With AI now enhancing every stage of fragrance development – from concept to compliance – the role of tech in olfactory experiences is more crucial than ever.

What’s happening

According to Statista, global revenue for fragrances is expected to increase at an average annual rate (CAGR) of 3.31% between 2025 and 2030 – with global beauty market revenue growing at a similar rate.

Industry commentary suggests that always-on lifestyles will drive new directions in fragrances, ranging from conveniently sized bottles that can be tossed into handbags to social media powering a hunger for newness, thanks to the instant proliferation of perfume trends (source: Beauty Matter).

‘Now people have a scent wardrobe,’ says Harry Richards, investment director at Manzanita Capital, a fund that backs fragrance brands such as DS&Durga and Byredo.

‘They have different fragrances for different occasions, moods, and different times of the year… how customers interact with fragrance has changed.’

Conversations about ingredients and provenance are building among fragrance consumers.

Today, 90% of consumers consider sustainability when buying beauty and wellness products, pushing manufacturers to switch new product development (NPD) processes for improved sourcing and safety (source: Provenance).

How will fragrance houses keep one step ahead? The answer lies in artificial intelligence (AI), and its ability to analyse, deduce and recommend. While we’ve previously explored how AI is elevating fragrance retail, it’s also transforming manufacturing, from new product development to ingredient innovation and product safety.

What’s new

Intelligent efficiency

Traditional fragrance creation is a slow, methodical and expensive process. According to New Scientist, it can take up to three years to develop a new perfume using traditional techniques (such as extracting oils), costing up to £37,265 ($50,000, €43,825) per kilogram of raw ingredients.

On top of this, most perfumers – known as ‘noses’ – will have a subjective take on what smells good, influenced by personal preferences, training, and regional and cultural influences. This means fragrances made for global audiences could be launched with little relevance to current regional trends and tastes.

Enter AI. Lauded for its efficiency-boosting benefits, fragrance and beauty manufacturers are integrating AI into their processes to rapidly analyse market and consumer data, and uncover gaps and opportunities.

Unilever is investing £85m ($114m, €100m) to build an in-house AI-enabled fragrance design and creation unit for new product development, evaluation, measurement, testing and data analytics. Unilever will use AI in combination with human expertise and neuroscience to develop proprietary fragrances for its brands, while also researching how fragrance can support moods and emotional wellbeing.

Elsewhere, digital fragrance disruptor Osmo recently launched Generation, a B2B fragrance house using AI to develop perfumes for brands, retailers and institutions such as museums, helping them to ‘harness our most powerful sense as a tool for expression and engagement’.

Generation’s proprietary Olfactory Intelligence (OI) is an AI tool that analyses ingredients, formulations and market insights. Founder Alex Wiltschko tells LS:N Global: ‘Through the use of OI, we’re able to make scented products for anyone, at scale, expanding the market in ways the traditional model cannot. Fragrance is about to move at the speed of culture, and we’re leading the charge.’

AI co-creation

Fragrance houses are also exploring AI for inspiration and co-creation between noses and experts, brand partners and customers.

Some are using machine learning and natural language processing (NLP) – subsets of AI – during the product development and testing stage. Here, researchers use AI to gather and analyse insights from target audiences and focus groups, uncovering scent preferences based on verbal or written responses to various stimuli.

Seen in practice, IFF recently launched ScentChat™, an AI-powered research tool. This instant messaging app collects real-time consumer feedback and qualitative insights during the fragrance creation process, using NLP to translate consumers’ responses into ideas for IFF’s perfumers. The company also sees potential for ScentChat™ to aid future co-creation directly with consumers, based on their tastes.

Swedish beauty company Oriflame and fragrance house Symrise recently created three scents, uniting expert noses with Symrise’s fragrance AI, Philyra. With a brief to develop three perfumes on the themes of nostalgia, awe and cosmic wonder, Philyra became the noses’ creative co-pilot. Functioning ‘like a Spotify or Netflix recommendation algorithm’, it merged draft formulas from the perfumers with its understanding of the three themes. The resulting scents – Time Loop, Earth Wonder and Across Space – are now sold by Oriflame as the AI co-created Scope fragrance collection.

Safer scents

At present, manufacturers in the EU are required to disclose 82 specific fragrance allergens on product labels, including 28 natural extracts and 54 individual chemicals. Amid growing awareness of ‘forever chemicals’ – ingredients that can negatively affect our health – fragrance-makers are turning to AI to ensure their scents align with evolving ingredient and chemical regulations.

When a formula falls short, there is a need for fast and cost-effective reformulation. AI-powered scent lab Moodify launched its Reformulation service in response to shifting international compliance and ingredient supply chain issues. It uses AI to help brands efficiently update existing fragrances, keeping safety and sustainability front and centre.

When a key ingredient in a fragrance is lost due to regulations, tariffs or other supply chain concerns, Osmo’s Generation OI tool takes mere minutes to pinpoint alternative ingredients that produce the same result. It can even invent new molecules, tailored to specific variables.

‘Generation can predict and create entirely new molecules that have never been smelled before, are more sustainable, and solve problems that existing materials can’t, such as toxicity and safety to humans and the planet,’ says founder Alex Wiltschko. ‘This is done at 10x the [speed]. It also allows us to test products, understand their performance and reformulate and relaunch quickly, if needed.’

Looking ahead, Wiltschko believes AI will help brands – and even consumers – to determine the authenticity and safety of a scent. Osmo has already built an AI system that can detect ‘counterfeit’ products based on their scent, a potentially useful tool in the age of fragrance dupes (source: Fast Company). Breaking beyond the fragrance sector, there is potential to use AI scent detection for public safety, according to Osmo, by tracking and tracing the release of chemicals, gases or pollutants in densely populated spaces or buildings.

What this means

For fragrance manufacturers and the beauty, fashion and heritage brands that license and develop scents with them, AI promises to boost efficiencies, market relevance and consumer safety.

At the ideation stage, brands can embrace AI as a tool to foster more efficient consumer, market and trend analysis. This can help to unlock target audience preferences, local moods or trending notes across different regions, while combatting olfactory fatigue. As an NPD co-pilot, AI can support perfumers and brands with seasonal collections to deliver faster and more relevant product innovation, reducing costs and time to market.

Looking ahead, AI-powered fragrance experiences will evolve further, putting NPD into the hands of beauty and fragrance customers. We can imagine AI tools like ScentChat™ empowering the public to explore and design personalised perfumes aligned with their mood, occasion or sustainability preferences. Providing such tools positions brands as innovative, while delivering instant consumer insights and market preferences to inspire and shape future mass-market launches.

Finally, with global supply chains at the mercy of tariffs and evolving health regulations, fragrance manufacturers will use AI to stay on top of threatened or banned ingredients. Perfume oils sourced from regions like China, such as eucalyptus, geranium and spearmint, are at risk of price hikes thanks to US tariffs. Here, AI can identify alternative or interim ingredients to match cost and quality variables, mindful of regional climate, soil and scent variations.

And with greater awareness of impactful chemicals on human and planetary health, more manufacturers could explore AI as an analytical assistant, keeping check on regulations and suggesting reformulations to ward off breaches, investigations or even fines from enforcement authorities.

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