Unilever opens AI-powered fragrance R&D centre at IIT Bombay under €100 million plan

Unilever, a leading consumer goods company, has inaugurated a fragrance research and development centre at the Indian Institute of Technology (IIT) Bombay as part of a significant investment plan amounting to €100 million. This initiative aims to leverage artificial intelligence (AI) in the creation of fragrances across its facilities in India, the United States, and the United Kingdom. The establishment of this centre marks the third global Unilever Fragrance House (UFH) and is notable for occurring nearly three decades after the company divested its flavours and fragrances division, Quest International, in 1997.

The head of UFH and R&D Partnerships, Vivek Sirohi, outlined three operational models for fragrance development that Unilever intends to pursue. The first model involves creating fragrances entirely in-house, utilizing the expertise of their creative teams alongside consumer and brand insights. The second model maintains collaboration with established fragrance houses, albeit with a shift towards incorporating Unilever's creative capabilities into the process. The third model is a fully outsourced approach, which allows for flexibility in fragrance creation.

Unilever had previously announced the formation of the Unilever Fragrance House in November 2024, with its inaugural fragrance facility launched in May 2025 at Port Sunlight, UK, backed by an investment of £80 million. The US facility was subsequently revealed in July 2025, located in Connecticut. Sirohi emphasized Unilever's position as one of the largest players in the global fragrance market, highlighting the importance of the company taking ownership of the fragrance design process.

While Unilever will not completely replace its existing fragrance partners, it plans to utilize these partnerships during product development and to gather consumer insights. This hybrid model aims to integrate fragrance development with product innovation, contrasting with traditional methods where these processes were conducted separately. Sirohi articulated the company's goal to co-innovate products and fragrances simultaneously, thereby making fragrance an essential component of product development.

The investment in AI capabilities, predictive analytics, and digital tools at the Fragrance House is expected to accelerate product innovation and improve time-to-market efficiency. Vibhav Sanzgiri, executive director of R&D at Hindustan Unilever Ltd. (HUL), noted that the India facility will contribute to a global fragrance network rather than focus solely on domestic brands. He mentioned that Unilever has made substantial investments in India to enhance predictive capabilities, robotics, and AI, resulting in a significant reduction in innovation timelines—averaging around 50% faster.

For the India hub, raw materials will be sourced from both local and international markets, depending on specific product and formulation needs. The collaboration with IIT Bombay aims to bolster research and talent development in fragrance chemistry, AI, and product innovation. Sanzgiri explained that this hub will engage with academic institutions for research, internships, fellowships, and technological advancements, tapping into India's expanding pool of scientific and engineering talent.

This development aligns with Unilever's strategic pivot towards becoming a home and personal care-focused entity globally, with fragrance playing a crucial role in enhancing consumer appeal and driving premiumization. In March 2025, Unilever's global CEO, Fernando Fernandez, emphasized the significance of the fragrance category, noting an annual investment of nearly €1.2 billion in this area. He compared this investment to that of major fragrance houses within the consumer division, underscoring its importance. Fernandez reiterated the commitment to collaborate with fragrance houses while simultaneously building internal capabilities to optimize value within the supply chain.

Overall, Unilever's establishment of a fragrance R&D centre at IIT Bombay represents a strategic move to integrate advanced technologies like AI into fragrance development, enhancing both innovation and market responsiveness. The company's commitment to developing internal capabilities while maintaining partnerships with established fragrance houses indicates a comprehensive approach to evolving its fragrance portfolio in a competitive marketplace.

Why it matters

The opening of Unilever's fragrance R&D centre at IIT Bombay is significant for several reasons. Firstly, it highlights the increasing importance of AI in product development, particularly in the fragrance industry, where consumer preferences are rapidly changing. By integrating AI and predictive analytics, Unilever aims to streamline the fragrance creation process, potentially leading to faster product launches and a more responsive approach to market demands.

Secondly, the collaboration with IIT Bombay underscores the value of academic partnerships in fostering innovation. By tapping into India's skilled workforce and research capabilities, Unilever not only strengthens its own talent pipeline but also contributes to the broader ecosystem of fragrance chemistry and product development in the region.

Lastly, Unilever's strategic pivot towards a home and personal care focus emphasizes the growing consumer interest in fragrance as a differentiator in product offerings. As the company invests significantly in this category, it signals a commitment to enhancing consumer experiences through innovative fragrance solutions, which could reshape market dynamics in the personal care sector.