A Breath of Fresh Air

September 5, 2006

Home fragrance sales stay solid as traditional air fresheners are superceded by more luxurious products.

Bleu Bay candles come in collections such as Enchant, Relax, Dream and Revive.
A Breath of Fresh Air

Home fragrance sales stay solid as traditional air fresheners are
superceded by more luxurious products.

Ava Caridad

Associate Editor

Everything’s coming up roses for home fragrance marketers, but will the bloom fade? According to Euromonitor International, Chicago, IL, U.S. air care sales were more than $2 billion in 2005, up from $1.5 billion in 2000. Projected growth of a flat $8 million by 2010 is discouraging news, but as always, marketers will rely on innovation as well as jumping on the “spa experience” bandwagon in an attempt to boost sales.

“The premium home fragrance market is about creating a sensory environment in the home through color, fragrance and visual appeal,” stated Catie Briscoe, director, consumer communications, Crabtree & Evelyn. “New delivery systems, such as crystal rocks, diffusers and candle wax textures, are keeping the category fresh.”

Broken down by category, spray/aerosol sales rose to $415 million in 2005 from $242 million in 2000; electric air fresheners jumped to $754.5 million from $418 million; gels came in at $187 million from $132 million; and scented candles rose from $247 million in 2000 to $265.7 million in 2005.

According to Pam Danziger, president of Unity Marketing, Stevens, PA and author of Let Them Eat Cake: Marketing Luxury to the Masses as Well as the Classes, candles and home fragrances are luxuries for the “masses,” and spending on these products cuts almost equally across all income segments.

“Even the lowest income households participate actively in the home fragrance market,” she said. “This is one reason why mass merchants, such as  Wal-Mart, Target and Kmart, the dollar stores and warehouse clubs are the nation’s largest distribution channel for home fragrance with 28% market share. While scented candles continue to be the first choice for home fragrance, the expanding range of other home fragrance products, including electric plug-ins, diffusers, scent disks, sprays, potpourris, incense and bed linens sprays, is rapidly growing the overall market.”
The mass-market slice of the home fragrance pie grew larger in 2005 as mass merchandisers displaced specialty stores as the leading retail channel for the first time in several years, according to a market study from Kline & Company, Little Falls, NJ. 

Mass merchandisers reported sales gains of more than 10% from 2004, thanks to the strong product lineup of diffusers and room sprays carried in these outlets. Meanwhile, specialty stores recorded below-average industry growth of approximately 4%, according to Kline’s Home Fragrances USA 2005.
Fueling the popularity of diffusers and room sprays is the dual functionality and convenience of products such as Procter & Gamble’s Febreze, said Lenka Contreras, vice president of Kline’s research division.

“These multifunctional products appeal to today’s consumers, who are looking for added value and ease of use. Diffusers continue to lead all categories by offering people a way to put different fragrances in each room without the safety concerns of scented candles,” she observed.

Early indications for market growth in 2006 are mixed, however. The Yankee Candle Company reported a decline in second-quarter sales and announced that its board of directors is considering “strategic alternatives to enhance shareholder value, including a potential sale of the company.”

What Consumers Want

A profound shift has occurred in the consumer market, and people realize that having a pleasant smelling home is not just for holidays or special occasions anymore.
“People expect their homes to be nicely fragranced every day and throughout the house,” explained Ms. Danziger. “Thus buying and using home fragrance products, which used to be an occasional luxury, is becoming an everyday necessity for more Americans.”

According to Unity Marketing, women aged 25-to-34 are the prime target market for home fragrance. While the typical consumer spends $266 per year on all home fragrance products, women ages 25-to-34 spend nearly 30% more than the average, or $340 per year. They are more active shoppers in all areas of home fragrance products, including candles and candle accessories.

Rick Ruffolo, senior vice president of brand, marketing and innovation, Yankee Candle, has a different approach to the market than chasing the hottest new fragrance fad. He adheres to three fundamental concepts that are critical to understanding how consumers interact/shop in the home fragrance market.

The first concept is providing consumers with fragrances that are complementary or that “layer” with their favorite candle fragrances. So, a fan of Yankee Candle’s Macintosh fragrance will also likely want this same fragrance in an electric home fragrance product or reed diffuser.

The second concept is recognizing that there is a seasonality to a consumer’s fragrance preference. Popular fragrances in the fall are not the top fragrances during spring or summer, as many consumers look to reflect and surround themselves with what is going on in nature and the changing of the seasons.

The third concept is offering a broad fragrance selection. 

Er’go’s Chai Tea soy candle smells good enough to drink.
“Brands that offer only a few fragrance options are not credible to ‘fragrance-centric’ shoppers. They should carry a minimum of 30,” Mr. Ruffolo added.

Fashionable Fragrances

How are new fragrance trends born? Who decides what home scent is the next big thing?

“The old method used to be that a fine fragrance trend would ‘trickle down’ and five to 10 years later end up in the air care aisle,” said Alyce Sheehan, senior scientist, Febreze R&D. “This cycle has sped up tremendously. While it used to take scents years to trickle down, now this happens in months.”

According to Lynette Cvikota, director, new innovation, Blyth, the consumer is very aware and discerning about fragrances. They expect luscious, true-to-life fragrances and are always looking for something fresh and new, while still loving their favorites.

“Fragrances are also becoming more ‘natural’—fresh air, clean water, herbal spa and ozonic fragrances are refreshing and uplifting,” she said.

“Even florals are fresher, more recognizable, more true to life. The consumer seems to choose different fragrances for different situations, different rooms, different times of the day and night, and for different moods.”

Industry insiders who spoke to Happi indicated that popular year-round scents include vanilla, clean cotton, lavender, Macintosh, buttercream, salt air and surprisingly, water, which we know has no scent naturally, but a big favorite when augmented with fresh accords labeled “rain”, “ocean,” or “spring.”

“If I were to pick one scent in today’s market it would have to be linen,” concluded Ms. Sheehan. “The ‘comfy, back to the home’ trend hasn’t peaked yet and it’s a no-brainer that consumers like the fresh clean scents associated with laundry.”

Plugging Into Innovation

According to Euromonitor, electric air fresheners are expected to grow in sales more than 11% to $838 million by 2010.  However, if they expect to realize this growth, brands will have to do more than just develop a scent that can be plugged into the wall and forgotten about.

he Malaysia-inspired Sarawak line of exotic Crabtree & Evelyn home fragrances features potpourri in a cute banana palm leaf holder.
That’s why Glade, from S.C. Johnson, no doubt trying to imitate the ambiance of a candle, wants to turn the bedroom into a more inviting space with Glade PlugIns Scented Oil Light Show. The product combines soothing color, changing lights and fragrance from the Fun & Flirty collection, including Berry Burst, Vanilla & Cream and Watermelon Rush. The speed and brightness of the light show can be adjusted to fit the user’s mood.

P&G’s Febreze launched its first dual-scented electric air freshener earlier this year.  Febreze Noticeables is designed to automatically alternate back-and-forth between two complementary scents when plugged into a standard wall outlet. Noticeables comes in five scent combinations: Morning Walk/Cleansing Rain; Calypso Breeze/Hawaiian Paradise; Jasmine Breeze/Pink Magnolia; Vanilla Refresh/Vanilla Bean; and Clothesline Breeze/Meadow Songs. Suggested retail price is $7.99 (starter kit) and $4.49 (refill).

Burning Bright

Sales for candles, historically the mainstay of the home fragrance market, remained soft in 2005, according to Kline & Co. The category may get a boost in 2006, however, as Yankee Candle introduces a new line of candles and completes its purchase of competitor brand Illuminations.

“Mass-market candle sales have been declining consistently, making it even more important for home fragrance marketers to focus on innovation, adding new product forms to their portfolios, and raising price points by creating higher perceived value for their new products,” said Susan Babinsky, senior vice president and head of Kline’s Consumer Products consulting practice.

Yankee Candle, South Deerfield, MA, launched the Farmer’s Market line, inspired by the seasons’ changing harvests, including fresh mandarin oranges, juicy cranberries, ripe apples and richly textured pumpkins. The jar candles appear to be filled to the brim with succulent, fresh-picked fruits, vegetables and other natural foods that celebrate not only the scents of the season, but also the rich and colorful sights of the season.

“Farmer’s Market gives us a great opportunity to bring a new visual appeal to our best-selling Housewarmer candle fragrances while maintaining the high quality our customers have come to expect from Yankee Candle,” said Mr. Ruffolo.

Utilizing a proprietary combination of paraffin and clear wax technologies, the Farmer’s Market candles are designed to glow when lit. The center of the candle releases the well-known Yankee fragrance while the outer layer remains intact, so the “jam jar” always appears full.

Debuting in fragrances including Berry Crumble, Mandarin Cranberry and Cinnamon Apple Berry, Farmer’s Market candles will feature an ever-changing variety throughout the year, making them suitable for year ‘round gift giving. Prices range from $7.99 to $21.99. Outside of the Farmer’s Market, Yankee Candle also has 13 new fall fragrances for 2006, including Sugar Cane & Vanilla, Sage & Cinnamon, Ginger Citrus, Tea & Honey, Autumn Leaves, Rhubarb Plum and Spiced Cocoa.

Bleu Bay, Scottsville, TX, introduced a line of candles marketed as natural authentic aromatherapy blends. There are 16 different proprietary aromas, such as  Ylang Ylang-Lavender-Gingergrass and Geranium-Peppermint-Spearmint, available in 11 different SKUs for a total of 176. The candles come in votive packs, pillar candles, glass goblets and travel companions. There are also different displays for showcasing the candles in a spa or high-end retail environment, said Tommy Dionisio, chief executive officer of Bleu Bay.

“These hand-crafted candles are for the spa, retail and home environment,” Mr. Dionisio continued. “They burn clean and are soot-free, allowing the user to embrace a healthy oasis, soothe the soul, restore balance and renew the spirit. Bleu Bay is earth-friendly, made in the U.S. and, in addition to its pure food-grade wax, cotton wicks and aromas, uses recyclable packaging and soy-based inks wherever possible.

According to the National Candle Association, 35% of all candles are sold during the Christmas/holiday season. Crabtree & Evelyn is no doubt aware of this as it launches an Autumn/Winter home fragrance collection in Spiced Ginger, Caramel Apple and Roasted Chestnut. Not just available in large and mini-candles, the complete line also includes home fragrance spray, fragrance diffuser, botanicals, fragrance oil with a light bulb ring and natural spice ornaments. Prices range from $10-$30.

The Spring/Summer collection includes sachets and potpourri and come in scents with names such as Window Box, Waikiki, Tuscan Cypress and Salt Air.

Crabtree & Evelyn also launched two new exotic lines comprising glass demi candles, room spray, environmental oil, botanical potpourri and a banana palm leaf holder, ranging in price from $6-$25. Nadira is a sensuous blend of Moroccan rose, jasmine and gardenia brightened by fruity notes of apricot, bergamot and nectarine. The fragrance is warmed throughout with sandalwood, clove, and exotic ambers and smoothed with a medley of musks. The Sarawak range imparts a sense of calm and centeredness with an intricate blend of natural herb and earth notes including grapefruit, lime, wild ginger root, ginseng and green bamboo.    

Soy Vey!

More than one billion pounds of wax are required to produce the candles sold each year in the U.S., according to the National Candle Association. And while the rising cost of oil has made it more difficult for businesses in all sectors, the home fragrance industry has felt the pinch more than most. Candles comprise a large part of the home fragrance market, and because petroleum-based wax is created as a by-product of the refining process for lubricant base stocks, nearly every company producing scented candles has been affected by the price swings of oil during the past three years, according Kline’s Home Fragrances USA 2005 market study.

Febreze Noticeables alternate fragrances so consumers never get bored of a scent.
“Many companies are already trying to cut their dependence on paraffin wax supplies by reformulating their products,” stated Carrie Mellage, industry manager of the consumer products practice for Kline & Co. “They’re exploring less expensive ways to deliver a quality candle with premium scents using vegetable-based waxes or synthetic materials.”

This is a prudent course of action for the long term, according to Kline’s forecasts for the global supply of wax over the next 15 years, wherein the global demand for waxes will grow at an average annual rate of 1%, while supply will likely drop by 1.5% a year, according to Bill Downey, vice president and head of Kline’s Petroleum & Energy consulting practice.

This may be why soy-based candles are becoming so prevalent in the home scent market. Cord Coen, co-founder of Zents, explains, “A few years ago, people didn’t even know what soy candles were. Now, all natural soy candles are becoming a very important driver, as are cotton wicks.  Additionally, the scents themselves are becoming more high design and complex and they are also being created with more of an awareness of scent sensitivity.”

Zents candles claim to contain 100% natural soy wax and all-cotton wicks, to burn cleanly and to be free of harmful carcinogenic chemicals. They contain no trace of petroleum, which causes unwanted black soot. Popular in spa treatment rooms, Zents candles are available in 10 aromatherapeutic, oil-based scents: earth, fig, fresh, mandarin, oolong, ore, pear, petal, sun and water.  They retail for $28.

Following the success of Zum Glow candles in a tin, Kansas City, MO-based Indigo Wild’s Zum Glow in a Glass ($22 for 7oz.) are soy-based candles with lead-free wicks. They come in Indigo Wild’s most popular scent, frankincense & myrrh, as well as three new scents: lavender, lavender-mint and sandalwood-citrus. According to the company, soy wax burns at a low temperature to provide maximum aromatherapy benefits.

Emily Voth, president of Indigo Wild, adds, “As more people become attuned to sustainable healthy living, they realize the benefits of non-chemical fragrance for their body and home. There is a trend toward creating our homes as healthy sanctuaries, as a respite from every day stresses. Several ways to do this is with natural fragrance using essential oils.  Most perfumes are made up of chemical components that can cause headaches, dizziness and irritability.”

This year, Er’go launched three new collections of soy candles. Tea Time offers 7oz. candles in green tea, chai tea and mint tea fragrances. The Autumn collection features woodsy scents such as birch, mighty oak, fig, geranium, nutmeg and clove and orange peel. The Winter collection warms up with hearth, cinnamon bark, winter wreath, blue ice and orchard spice.

Reed All About It

Consumers may be wary of setting things alight, however. Explained Mr. Coen, home fragrances that don’t require burning, such as scent sticks, are becoming more popular, particularly for people concerned with safety, such as parents of small children.

That may be why reed diffusers are gaining momentum in the market. Starting out slowly is Crabtree & Evelyn, whose new Waikiki and Tuscan Cypress collections offer scented sticks.

“The reed diffuser uses fragrance ‘wicking’ action and the surface area of the individual reeds to provide a pleasant fragrance experience in a modern, decor-neutral style,” explained Yankee Candle’s Mr. Ruffolo. “They typically are less fragrant than a scented candle or electric plug-type fragrancer, but more robust than potpourri, fragranced gel, and other passive diffusers. Additionally, they have the advantage of portability and flexibility (they don’t need a plug), ease-of-use (don’t need to light) and aesthetics (fits any room decor).”

Yankee Candle reed diffusers launched in May, retail for $19.99 and come in six scents, including fresh cut roses, juicy orange, clean cotton and mandarin cranberry.

Archipelago Botanicals has a steeper price tag ($60) for its reed diffusers, and a choice of 14 scents, including expresso, plantain, mojito, lemongrass, sweet pea, chocolate, peony, poblano and arugula.

Crabtree & Evelyn’s Ms. Briscoe insists that in the future, innovative potpourris—spice balls, floral-inspired sachets, hanging charms—will provide delivery systems that can follow interior design trends more closely.

Also shying away from a power source is Nubiana Royale, Easton, PA. In addition to scented candles, potpourri and incense, the company recently launched scented scarves and fragrance-impregnated silk floral arrangements for freshening up the home. The products are all natural and not chemical-based, according to founder and creator, Bess Hurr. 

There’s Something in the Air

Clearly, home fragrance sales haven’t peaked just yet, and innovation is likely to drive sales higher.

“This market is very competitive and undoubtedly there will be new mediums. Just this past year we’ve seen some products that automatically dispensed or switched between scents,” observed Febreze’s Ms. Sheehan.

Crabtree & Evelyn’s Ms. Briscoe believes that with the growth of the natural/organic market, the natural trend will continue to grow.  

“The opportunity in home fragrance is for more responsible companies to create more products that contain essential oils so that they outnumber the synthetic products out there,” concurred Indigo Wild’s Ms. Voth. “Eventually, no paraffin candles will be produced and instead, consumers will only purchase candles made from sustainable resources.”

What else can they think of? “There are so many ways to use essential oils to create natural scents,” concluded Ms. Voth. “One of the things we’re exploring is essential oils in cooking, so that when you cook, the air smells good…without any chemicals!”