Ukrainian perfumes are a worthy alternative to foreign analogues

Chernivtsi company "Aroma Perfume" is a leader in the production of perfumes in Ukraine. In its assortment - more than 300 positions of various segments, which are sold throughout our country and in a dozen others. The head of the enterprise, Vladimir Yaromiy, told how he achieved this and the intricacies of his work.

Vladimir Jaromiy gained experience back in the 80-90s. Then he was a sales representative in Ukraine of several foreign companies - well-known brands selling perfumes in the territory of the former USSR. Gradually, he formed a circle of business contacts both among manufacturers and among buyers. Over time, together with foreign partners, they opened a business in Ukraine. The business began as a joint Ukrainian-English venture in 2003. Foreign colleagues, who had extensive experience in the production of such products, not only invested, but also helped to choose equipment and establish a production line. For example, the Dutch packaging machine operating on the line is still No. 1 in the world among machines of this type. And Italian bottling ˗ is similar to that used by the best French manufacturers.

At the beginning of the activity, the assortment of the plant totaled 50 items. Things went pretty fast. In 2004, the first branch was opened in Kiev, in 2006 - in Kharkov, in 2007 - in Odessa. But the crisis and Ukrainian legislation forced foreign partners to reconsider their participation in the project. Vladimir Yaromiy decided to continue the activities of the enterprise on his own.

How to create a product

Aroma Perfume LLC operates on a full-production basis, buying carefully selected aromatic essential oils from leading European companies. Basically - this is France, Italy, Switzerland. Ukrainian manufacturers, unfortunately, offer products of a much lower level. Although for household chemicals, air fresheners, aromatherapy, it is quite suitable.

Next begins the process of mixing, maceration, filtering and bottling perfumes. In its work, the company adheres to French quality standards: cologne (Eau de Cologne) is a liquid in which the lowest concentration of oils is 3-4%, eau de toilette (Eau de Toilette) is a concentration of aromatic oils from 4% to 10%, perfumed water (Eau de Parfum, “perfume”) - from 15% to 30% oils.

After receiving the finished aromatic liquid, other production processes begin - bottling, packaging, packaging. At the enterprise they also make forms for gift baskets, decorate bottles, paint and put silk-screen printing. Glass perfume bottles are ordered abroad, but domestic packaging.

“The quality we keep is high. We constantly monitor products in Gosstandart. But really the toughest control is when entering foreign markets. After all, any developed country protects its citizens from goods of poor quality, and the manufacturer - from competition. Our products have been certified in the CIS countries, Europe, the UAE. One example. European perfumes have a shelf life of 12 or 24 months. We proved by laboratory means that the company's products have not deteriorated for five years, ”says Vladimir Yaromiy. Recognition comes not only from buyers. In 2015, at the Intersharm exhibition, the company was awarded a gold medal for the development of perfumery production in Ukraine.

Competitive environment

“The competition is just crazy, but first of all with an imported product. These are well-known advertised brands, in addition, they come to us without any duty. Against this background, the domestic producer can hardly compete, except in the segment of mid-price and cheap goods, ”says the businessman. But in these segments the competitive environment is created by cheap Chinese, Indian, Turkish “consumer goods”.

In addition, there are a number of shadow “aroma-castings” on the market that do not operate in the legal field, sell products on markets, layouts, sell fake aromas of famous brands. Whereas Aroma Perfume from the very beginning professed a transparent policy, starting with production, paying taxes, wages and the like. And this is also a significant factor in influencing production costs.

By the way, there is almost no competition among real domestic manufacturers. At the moment, few people work in this niche. Remained factories "Aromat" in Kharkov, "Galterra" in Lviv and several other private perfumers.

Product Sales

Almost 90% of the company's customers are legal entities. Aroma Perfume products are sold primarily in retail chains. In the well-known throughout the country "EVA", "COSMO", "Megamarket" you can find up to 50 positions of the manufacturer. For the PROSTOR network, perfumes are released under a private label. That is, they are sold under the trademark of this customer. Negotiations are underway with BROKARD, but there are products of the highest price and quality segment of world famous brands, which are difficult to compete with in aromas, packaging, and advertising. But with some top-level positions, the company still wants to try to get out.

The countries where products are most exported are Moldova, Belarus, and Russia. Negotiations are underway on Azerbaijan, and there is a possibility that this year perfumes from Ukraine will spread in the Caucasus region. In Kazakhstan and Uzbekistan, for example, sales are unpromising - logistics is very difficult. In addition, the proximity of China eliminates all the advantages of Ukrainian products.

In order to establish export, the company participates in specialized international exhibitions in France, Italy, the UAE, and Turkey. “Entering Europe is difficult because of a different trading system. There are no distributors as such, you need to negotiate and sign agreements directly with each trading network. This process is very resource intensive and expensive. Or you need to work with a group of intermediaries who have their own stores. Aroma Perfume is the only Ukrainian manufacturer to notify goods in the EU in order to sell perfumes. This is not easy to do; there are a number of specific requirements. But this direction of export is also in our field of vision, and it will develop, ”says the entrepreneur. The company's products are already in Italy, Latvia, Bulgaria. The markets of the Arab countries are complex, closed, but very promising. Mysterious beauties from Saudi Arabia and Kuwait already enjoy Ukrainian perfumes.

Advertising and promotion

This business is inherent in seasonality. Increased demand and use of perfumes - in the fall and winter. After March 8, the recession begins, the summer season is the lowest. In addition, there are waves of demand for aromas of various types. In the warm season, the advantage is in lighter, floral, fresh-sea aromas, in the cold - saturated, deep.

At the moment, the product range of Aroma Perfume reaches 300 positions. “We keep such a wide range to cover all price segments and directions. We analyze what is best sold in a particular season, for example, the average price segment. And we produce more of these products. During the crisis, economic downturns, the low-cost segment comes to the forefront. Consumer optimism launches premium product lines. When you have a narrow range, you cannot balance and respond to challenges, ”the source explains.

Effective measures to increase sales - promotions and product support at points of sale. The set is classic: discounts on certain goods, as well as when buying several units or groups of goods, etc. Such measures are usually short-lived. “Of course, the promotion period is unprofitable, but it improves brand and product recognition and gives a certain prolonged effect of increasing sales. Therefore, for the year we go to some average value, with normal profitability. There are corporate newspapers where you can place ads or offers, “internal radio”. All this requires significant funds, ”says Vladimir Yaromiy

Direct advertising is also used to support the product lines of an expensive segment. For example, we can see the advertising posters of the brand Andre L'Arom in the subway in Kiev or commercials on the Internet. Periodically advertised in women's and men's magazines, the range is presented at exhibitions. The website is being promoted, and thanks to it, potential customers also find the company.

Problems and Solutions

The turnover cycle in the perfumery business is very long, at least a year. “We import components for perfumes, bottles, equipment, and in advance. In order to make molds for a new kind of perfume, you need six months. But manufacturers need payment immediately. Sometimes we can return the funds no earlier than a year and a half, when the consignment is sold. In addition, there are risks that the new product will not work or stable positions will sag. To freeze funds less in stocks, we are constantly engaged in analysis and forecasting of demand. Part of the products is made for specific orders of the networks, and another part is made for their brands, the volumes are more accurate there, ”the entrepreneur shares his business problems.

In such operational difficulties, Raiffeisen Bank Aval provides great support to the company. The company uses overdrafts, a credit line to ensure operating expenses, cover cash gaps. “Aroma Perfume” uses a premium package of services for a current account in hryvnia and currency, a salary project.

Vladimir Yaromiy talks about the basics of the success of his own business: “First of all, I am grateful to the people who work here. There is a constant backbone of the team, these experts are versed in their profession, they do not need to explain what and how. It gives business agility and quality. After all, we need to focus on changes in the market. And also it’s important to have principles, perseverance and a desire to be the best in your field. ”