Question-and-Answer Session
Operator
Thank you. (Operator Instructions) Our first question today will come from Mike Sison with KeyBanc.
Mike Sison -KeyBanc
Good morning. Certainly going to miss you, Doug, and good luck on your future endeavors there.
Doug Wetmore
Thank you.
Mike Sison -KeyBanc
My first question is, Rob you commented on slowing in North America and Europe, and you saw some progress in Fine Fragrances in terms of year-over-year sales growth in the second versus the first. You also saw some progress in Functional Ingredients. So is your sense in at least those two businesses that customer inventories are fairly drawn out?
Rob Amen
Mike, that's a good question and a reasonable conclusion. Yes, I think the issue in Fine Fragrance now has been isolated to just a couple of accounts and as I say, light at the end of the tunnel. I don't necessarily know that Fine Fragrance in North America, or Fine Fragrance overall, is going to be positive in the third quarter, but I expect it will be close. And the fourth quarter, I think we're going to show you a positive year-over-year comparison.
Mike Sison -KeyBanc
Okay. Then in Functional Fragrances, it didn't appear that there was sort of that inflection point in terms of customer destocking. Is that going to be a little bit more of a headwind heading into the third and maybe some improvement into the fourth?
Rob Amen
Well, the challenge on Functional in North America isn't so much inventories as stocking or destocking.
Mike Sison -KeyBanc
Okay.
Rob Amen
We lost some business and we haven't gotten the launches and the growth that we were hoping to achieve. Some we didn't get and some have been delayed. But I think that's not just a challenge, it's going to take three months to solve. I think I told you earlier last quarter that we've got a challenge, particularly in our fabric business in North America, and we've got to turn that around.
Mike Sison -KeyBanc
Okay. And last question, you sort of talked about raw materials maybe continuing to be a headwind in the second half of '08. It didn't seem like the squeeze was that large, I mean, in total, in the second quarter.
So can you just give us an update as how much more intense is that pressure going to be in the third and fourth quarter? And do you think the delta between your pricing or recovering the cost expands, stays the same, or actually maybe potentially shrinks as you try to get pricing?
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