The global fragrance market is projected to reach approximately $62.11 billion by 2025, with an annual growth rate of 3.31%, according to Statista. Concurrently, the digital scent technology market, which includes AI-driven olfactory applications, is expected to expand from $1.2 billion in 2024 to $2 billion by 2029, growing at a compound annual growth rate (CAGR) of 10.5%, as reported by Perfumer & Flavorist.
As consumer preferences shift toward sustainability, a survey conducted by Hearst Magazine and MarketCast found that 75% of consumers express interest in purchasing from brands that prioritize eco-friendly practices.
These industry trends indicate a growing demand for innovation in fragrance formulation and ingredient development, mainly through AI-driven approaches.
In particular, Osmo, a company specializing in olfactory intelligence (OI), has developed technology that digitizes scent, offering new opportunities in fragrance formulation, sustainability, and ingredient development.
Digitizing scent: The process of scent teleportation
Osmo has introduced its Scent Teleportation process to capture and recreate scents digitally. We spoke to Alex Wiltschko, Founder and CEO of Osmo, who explained that the company first achieved complete scent recreation in 2024 with a replication of a fresh-cut summer plum.
“We were the first to fully digitize this process, which we did through olfactory intelligence (OI), our proprietary AI specialized on scent,” said Wiltschko.
The process involves using a spectrometer to break down a scent into individual molecules, converting the raw data into a scent encoding, and then using a scent printer to recreate the fragrance.
Using this technology, the company has since established Generation by Osmo, a fragrance house designed to integrate AI into scent formulation, offering brands access to AI-assisted fragrance development.
AI-driven molecule discovery
In addition to scent replication, Osmo’s AI technology has enabled the development of three proprietary fragrance molecules—Glossine, Fractaline, and Quasarine. These molecules are already in use by fragrance and personal care manufacturers.
“We approached the problem differently,” said Wiltschko. “Instead of trial and error in the lab, we used OI to predict and design molecules that hit the right olfactory notes, meet the highest safety standards, and solve real-world fragrance product problems.”
Regulatory approval and performance validation remain key considerations in new molecule development. “Every molecule has to go through rigorous safety testing to be market-ready,” he explained.
“We also had to ensure they performed just as well, or better than existing materials in real-world applications, from fine fragrance to personal care,” he added.
AI’s role in sustainability and efficiency
Sustainability remains a priority in fragrance development, and AI-based ingredient discovery has the potential to streamline the process.
“Sustainability in fragrance starts with sustainable ingredients,” Wiltschko noted. “At Generation, we use OI to design and select new ingredients that are safer and more sustainable than anything discovered before.”
According to Osmo, AI can accelerate discovery timelines and reduce waste in ingredient development by minimizing trial-and-error methods.
“With OI, we can fast-track discovery. Faster discovery means less waste, as traditional ingredient development involves years of trial and error. We are able to design molecules to be non-toxic, biodegradable, free from harmful allergens or pollutants,” Wiltschko said.
Fragrance supply chain impact
AI can potentially improve efficiency in fragrance formulation and supply chain stability. “We can discover better ingredients at 10x the rate,” Wiltschko clarified. “The goal is to get to the safest, most affordable, and most beautiful ingredients, with minimal waste.”
By applying AI to ingredient selection and formulation, companies may reduce reliance on limited natural resources and improve the consistency of fragrance production. “90% of household products include fragrance. With the help of OI, we can change the way household products are developed in a really meaningful way,” Wiltschko stated.
AI & the creative process
While AI is often associated with efficiency, its role in the creative aspects of fragrance formulation is also being explored. We spoke to Osmo’s Master Perfumer, Christophe Laudamiel, who explained that he sees AI as a tool that complements human creativity rather than replacing it.
“AI is already changing how we create. But great perfumers, like great architects or chefs, will always be in demand,” said Laudamiel. “What AI does is enhance, accelerate, and refine: it doesn’t replace intuition, artistry, or the ability to create something deeply human, instead, it removes blind spots and optimizes formulas.”
Laudamiel emphasized AI’s ability to refine formulation by replacing multiple ingredients with high-performance alternatives. “AI can check that a fragrance isn’t just a remix of something old,” he said.
Rather, “it can find molecular shortcuts that replace five, six, or even more traditional ingredients with single new, high-performance ones…the magic happens when machines and human noses work together,” he said.
Future developments
Osmo is continuing to refine its AI-powered fragrance development capabilities. “We completed our first chapter. We’ve built a team and succeeded in digitizing scent in the lab,” said Wiltschko. “Computers learned to read and write with Natural Language Processing (NLP), to see with computer vision—we finally taught them to smell with Olfactory Intelligence (OI).”
The company is also exploring large-scale fragrance production using automated systems. “The next chapter is Generation. We’re making fragrances for anyone, at scale. We’re building a factory that will be able to robotically produce a new batch of fragrance every 60 seconds,” Wiltschko stated.
As AI continues to shape the fragrance industry, its adoption may influence formulation speed, regulatory compliance, and supply chain resilience. “The industry is shifting. The brands that embrace data-driven, AI-powered fragrances will move faster, launch smarter, and create scents that are beautiful and are built to perform,” he concluded.
