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Candles - US - August 2011

SCOPE AND THEMES
What you need to know
Definition
Data sources
Sales data
Consumer survey data
Advertising Creative
Abbreviations and terms
Abbreviations
Terms
EXECUTIVE SUMMARY
FDMx sales continue downward trend
Air fresheners represent key competitive threat
Most motivated to purchase by scent
Religious and unbranded candles show some promise
Eco- and scent-related claims often associated with new launches
Women are the key consumer segment
Walmart and other mass merchandisers often preferred channel
Fragrance drives many to purchase
INSIGHTS AND OPPORTUNITIES
Partner with “deal of the day” firms like Groupon to encourage product trial
Incentivize customers to participate in viral programs, as Groupon does
Target religious Hispanics with Catholic imagery
Figure 1: St. Jude Candle Company product listing catalog image, 2011
Help consumers create desirable emotional states
Candles to aid breathing
Consider offering memory candles
INSPIRE INSIGHTS
Trend: “A Simple Balance for Health”
Trend: “Prove It”
MARKET SIZE AND FORECAST
Key points
FDMx sales continue to decline in weak economy and highly competitive sales environment
Figure 2: FDMx sales and forecast of candles, at current prices, 2006-16
Figure 3: FDMx sales and forecast of candles, at inflation-adjusted prices, 2006-16
Walmart sales
Fan chart forecast
Figure 4: Fan chart forecast of FDMx sales of candles, at current prices, 2006-16
MARKET DRIVERS
Key points
Home entertainment trend contributes to demand for candles
Figure 5: Changes in lifestyle and spending habits in the past year, May 2011
Rise in unemployment undermines consumer confidence
Figure 6: Unemployment, January 2007-March 2011
Figure 7: University of Michigan Consumer Sentiment Index, March 2007-May 2011
Rising CPI discourages discretionary spending
Figure 8: Consumer Price Index*, all items, January 2008-February 2011
Figure 9: Change in CPI* in food and energy sectors, August 2010-February 2011
COMPETITIVE CONTEXT
Air care continues to undermine growth in candle sales
Figure 10: Reasons for buying candles, May 2011
Spray most popular air-care delivery system
Figure 11: Use of air freshener, by type, July-August 2010
Refill claims become more common in air care as consumers seek greater value
Figure 12: Incidence of claims associated with new air freshener launches, 2005-11
RETAIL CHANNELS—OVERVIEW
Figure 13: FDMx sales and forecast of candles, at current prices, by channel, 2010 and 2011
SUPERMARKET SALES
Key points
Supermarket sales declining slowly
Figure 14: FDMx sales and forecast of candles at grocery stores, at current prices, 2006-16
OTHER FDMX CHANNELS
Key points
Other channel also shows steady declines
Figure 15: FDMx sales and forecast of candles in other FDMx stores, at current prices, 2006-16
SALES OF CANDLES THROUGH NATURAL SUPERMARKETS
Key points
Insights
Sales of household candles in the natural channel
Figure 16: Natural supermarket sales of candles, at current prices, 2008-10*
Figure 17: Natural supermarket sales of candles, at inflation-adjusted prices, 2008-10*
Natural channel sales by segment
Figure 18: Natural supermarket sales of candles, by segment, 2008 and 2010*
BRAND SHARE—LEADING FDMX MANUFACTURERS
Key points
SC Johnson losing share but still dominant
Candle-Lite (Lancaster Colony Corp.)
Yankee Candle
Signature Brands
FDMx sales and brand share for companies with $30 million+ in FDMx sales
Figure 19: FDMx sales and brand share for companies with $30 million+ in FDMx sales, 2010 and 2011
BRAND SHARE—OTHER MANUFACTURERS
Key points
 COMPANIES WITH $10-29.9 MILLION IN FDMX SALES
Some mid-sized and smaller firms defy the downward sales trend
Procter & Gamble (Febreze)
Village Candle
Chesapeake Bay Candle (Pacific Trade International)
St. Jude Candle posts growth with religious offering
Airwick also defied sales trend
FDMx sales and brand share for companies with $10-29.9 million in FDMx sales
Figure 20: FDMx sales and brand share for companies with $10-29.9 million in FDMx sales, 2010 and 2011
 COMPANIES WITH $5-9.9 MILLION IN FDMX SALES
Langley/Empire Candle LLC
Hanna’s Candle Co.
Continental Candle Company wins with religious and generic offering
FDMx sales change for companies with $5-9.9 million in FDMx sales
Figure 21: FDMx sales growth among companies with $5-9.9 million in FDMx sales, 2010 and 2011
 COMPANIES WITH $2-4 MILLION IN FDMX SALES
Decopac finds growth with celebration candles
For Every Body wins with eco-friendly offering
FDMx sales change for companies with $2-4 million in FDMx sales
Figure 22: FDMx sales growth among companies with $2-4 million in FDMx sales, 2010 and 2011
 OTHER COMPANIES
Slatkin & Co.
PartyLite and Blythe Inc.
Aromatique
100 Candles
Alene Candles
Newville Candle Company (Celebration Candles)
Virginia Candle Company
INNOVATIONS AND INNOVATORS
Key points
Yankee Candle, Slatkin, and SC Johnson win with innovation
Figure 23: New candle product launches, 2005-11
Scent-related, ease of use, and eco-friendly packaging common in 2010-11
Figure 24: Incidence of claims associated with new candle product launches, 2005-11
Glade focuses development efforts on popular scent profiles to maintain dominance
Yankee introduces QuickScent and a patriotic candle in 2011 that drive growth
Yankee Candle takes American-made a step further
Slatkin & Co. continues to introduce broad range of fragrances
MARKETING STRATEGIES
Key points
Overview
SC Johnson (Glade)
Figure 25: Glade Candle Scents TV ad, 2010
Figure 26: Glade scented oil candles, TV ad, 2010
Glade.com
Figure 27: Quantcast.com estimates for site traffic to glade.com, July 2011
Procter & Gamble (Febreze)
Figure 28: Febreze (multi-products) TV ad, 2010
Febreze.com
Figure 29: Quantcast.com estimates for site traffic to febreze.com, July 2011
Febreze uses Facebook to spread viral ads and align with yoga use practitioners
P&G gets viral with Febreze
Febreze uses YouTube viral campaign to get people talking
Figure 30: Febreze breathe happy campaign/ experiment, July 2011
Figure 31: Febreze breathe happy campaign/ dirty room, July 2011
Febreze also uses consumer reviews to explain and promote products
Figure 32: Febreze consumer review 1, July 2011
Figure 33: Febreze consumer review 2, July 2011
Figure 34: Febreze consumer review 3, July 2011
Yankee Candle
Figure 35: Quantcast.com estimates for site traffic to yankeecandle.com, July 2011
Facebook
Twitter
Chesapeake Bay Candle
Facebook
PartyLite
Figure 36: Quantcast.com estimates for site traffic to partylite.com, July 2011
Twitter
Village Candle
Facebook
Twitter
Bath & Body Works
Figure 37: Quantcast.com estimates for site traffic to bathandbodyworks.com, July 2011
Facebook
INCIDENCE AND FREQUENCY OF BUYING CANDLES
Key points
Candle-purchasing patterns remain similar to year past
Figure 38: Incidence and frequency of buying candles, 2009-11
Women more likely to buy candles at least a few times per year
Figure 39: Incidence and frequency of buying candles, by gender, May 2011
25-54s more likely to buy candles than younger or older adults
Figure 40: Incidence and frequency of buying candles, by six age groups, May 2011
Many households with incomes of 100K+ rarely or never buy candles
Figure 41: Incidence and frequency of buying candles, by five household income groups, May 2011
Women aged 45-54 most likely to buy candles
Figure 42: Who is actually buying candles in the household?; gender by age groups, May 2011
WHERE PEOPLE BUY CANDLES
Key points
Women are more likely to purchase candles in specialty stores
Figure 43: Where people buy candles, by retailer type, by gender, May 2011
Younger candle buyers more likely than others to buy at specialty stores
Figure 44: Where people buy candles, by retailer type, by age, May 2011
Affluents more likely to purchase within specialty channel
Figure 45: Where people buy candles, by retailer type, by household income, May 2011
WHY PEOPLE BUY CANDLES
Key points
Fragrance is most frequently cited driver of candle purchase
Figure 46: Reasons for buying candles, by gender, May 2011
Odor masking primary driver among 18-24s
Figure 47: Reasons for buying candles, by six age groups, May 2011
Those from $100K+ households more interested in candles for holidays
Figure 48: Reasons for buying candles, by five household income groups, May 2011
A QUESTION OF SCENT—WHAT DO PEOPLE LIKE AND BUY?
Key points
Most, especially women, like to vary the scents they buy
Figure 49: Interest in scents and scent variation, by gender, May 2011
Those aged 55+ tend to prefer spice-type scents such as cinnamon
Figure 50: Interest in scents and scent variation, by six age groups, May 2011
Parents more likely to express interest in candle-making and scent-layering kits
Figure 51: Interest in scents and scent variation, by presence and number of children, May 2011
WHERE CANDLES ARE USED AROUND THE HOUSE
Key points
Women more likely than men to use candles in most rooms
Figure 52: Where candles are used around the house, by gender, May 2011
Young adults more likely to use candles in their bedrooms
Figure 53: Where candles are used around the house, by age, May 2011
Parents more likely to use in bedroom, bathroom, and kitchen
Figure 54: Where candles are used around the house, by presence and number of children, May 2011
BRAND PREFERENCES
Key points
Women more likely than men to be brand aware
Figure 55: Brands of candles bought in past two years, by gender, May 2011
Yankee Candle and Bath & Body Works resonate with middle- and upper-income segments
Figure 56: Brands of candles bought in past two years, by household income, May 2011
Households with children more likely to purchase leading brands
Figure 57: Brands of candles bought in past two years, by presence and number of children, May 2011
INTEREST IN U.S.-MADE VS. LOCAL/COMMUNITY-MADE PRODUCTS
Key points
About eight in 10 prefer to buy products made in the U.S.
Figure 58: Interest in U.S.-made vs. local/community-made products, by gender, May 2011
45+ segment more likely to prefer American-made products
Figure 59: Interest in U.S.-made vs. local/community-made products, by six age groups, May 2011
Those earning less than $25K least interested in U.S.-made products
Figure 60: Interest in U.S.-made vs. local/community-made products, by five household income groups, May 2011
CHANGES IN LIFESTYLE AND SPENDING HABITS IN PAST YEAR
Key points
Women more likely to have changed lifestyle and spending
Figure 61: Changes in lifestyle and spending habits in the past year, by gender, May 2011
Young adults more likely to report more online and natural purchases
Figure 62: Changes in lifestyle and spending habits in the past year, by six age groups, May 2011
Lower- and middle-income segments more likely to look for bargains
Figure 63: Changes in lifestyle and spending habits in the past year, by five household income groups, May 2011
IMPACT OF RACE/HISPANIC ORIGIN
Key points
Asians more likely to buy at least a few times per month
Figure 64: Incidence and frequency of buying candles, by race, May 2011
Hispanics are more likely to buy candles once a month or more
Figure 65: Incidence and frequency of buying candles, by Hispanic origin, May 2011
Blacks most likely to buy candles from Walmart
Figure 66: Where people buy candles, by retailer type, by race, May 2011
Hispanics more likely than non-Hispanics to buy from Walmart and dollar stores
Figure 67: Where people buy candles, by retailer type, by Hispanic origin, May 2011
Asians most likely to cite relaxation as a motivation for candle purchase
Figure 68: Reasons for buying candles, by race, May 2011
Hispanics are much more likely to buy candles for religious observance
Figure 69: Reasons for buying candles, by Hispanic origin, May 2011
Blacks are most likely to place candles in the bedroom
Figure 70: Where candles are used around the house, by race/Hispanic origin, May 2011
Bath & Body Works is especially popular with Asians
Figure 71: Brands of candles bought in past two years, by race, May 2011
Hispanics more likely to use Febreze, non-Hispanics more likely to use Yankee Candle
Figure 72: Brands of candles bought in past two years, by Hispanic origin, May 2011
CUSTOM CONSUMER TABLES
Middle-aged women spending more time at home but more frugal
Figure 73: Changes in lifestyle and spending habits in the past year, by gender and age group, May 2011
Yankee Candle and Bath & Body Works resonate with women
Figure 74: Brands of candles bought in past two years, by gender and age group, May 2011
Yankee Candle and Bath & Body Works hit their target with affluent women
Figure 75: Brands of candles bought in past two years, by gender and household income, May 2011
Upper-income women more likely to appreciate spice and varying scents
Figure 76: Interest in scents and scent variation, by gender and household income, May 2011
CLUSTER ANALYSIS
Candle Enthusiasts
Characteristics
Demographics
Opportunity
Average Users
Characteristics
Demographics
Opportunity
Rarely Relaxing
Characteristics
Demographics
Opportunity
Cluster characteristic tables
Figure 77: Candle clusters, May 2011
Figure 78: Frequency of buying candles, by candle clusters, May 2011
Figure 79: Reasons for buying candles, by candle clusters, May 2011
Figure 80: Interest in scents and scent variation, by candle clusters, May 2011
Figure 81: Where candles are used around the house, by candle clusters, May 2011
Figure 82: Interest in U.S.-made vs. local/community-made products, by candle clusters, May 2011
Figure 83: Changes in lifestyle and spending habits in the past year, by candle clusters, May 2011
Figure 84: Changes in credit card usage in past year, by candle clusters, May 2011
Cluster demographic tables
Figure 85: Candle clusters, by gender, May 2011
Figure 86: Candle clusters, by age, May 2011
Figure 87: Candle clusters, by household income, May 2011
Figure 88: Candle clusters, by race, May 2011
Figure 89: Candle clusters, by Hispanic origin, May 2011
Cluster methodology
APPENDIX—OTHER USEFUL TABLES
Incidence and frequency of buying candles
Figure 90: Incidence and frequency of buying candles, by four household size groups, May 2011
Figure 91: Incidence and frequency of buying candles, by presence and number of children, May 2011
Figure 92: Incidence and frequency of buying candles, by gender and household income, May 2011
Figure 93: Incidence and frequency of buying candles, by gender and age group, May 2011
Who is actually buying candles
Figure 94: Who is actually buying candles in the household?; by five age groups, May 2011
Figure 95: Who is actually buying candles in the household?; by four household size groups, May 2011
Figure 96: Who is actually buying candles in the household?; by presence and number of children, May 2011
Figure 97: Who is actually buying candles in the household?; by census region, May 2011
Figure 98: Who is actually buying candles in the household?; by five household income groups, May 2011
Figure 99: Who is actually buying candles in the household?; by five race groups, May 2011
Figure 100: Who is actually buying candles in the household?; by four household size groups, May 2011
Figure 101: Who is actually buying candles in the household?; by presence and number of children, May 2011
Figure 102: Who is actually buying candles in the household?; by census region, May 2011
Figure 103: Who is actually buying candles in the household?; by five race groups, May 2011
Figure 104: Who is actually buying candles in the household?; by four race groups, May 2011
Figure 105: Who is actually buying candles in the household?; by Hispanic origin, May 2011
Where people buy candles
Figure 106: Where people buy candles, by retailer type, by four household size groups, May 2011
Figure 107: Where people buy candles, by retailer type, by presence and number of children, May 2011
Figure 108: Where people buy candles, by retailer type, by census region, May 2011
Figure 109: Where people buy candles, by retailer type, by gender and household income, May 2011
Figure 110: Where people buy candles, by retailer type, by gender and age group, May 2011
Why people buy candles
Figure 111: Reasons for buying candles, by four household size groups, May 2011
Figure 112: Reasons for buying candles, by presence and number of children, May 2011
Figure 113: Reasons for buying candles, by census region, May 2011
Figure 114: Reasons for buying candles, by gender and household income, May 2011
Figure 115: Reasons for buying candles, by gender and age group, May 2011
A question of scent—what do people like and buy?
Figure 116: Interest in scents and scent variation, by five household income groups, May 2011
Figure 117: Interest in scents and scent variation, by four household size groups, May 2011
Figure 118: Interest in scents and scent variation, by census region, May 2011
Figure 119: Interest in scents and scent variation, by gender and age group, May 2011
Figure 120: Interest in scents and scent variation, by four race groups, May 2011
Figure 121: Interest in scents and scent variation, by Hispanic origin, May 2011
Where candles are used around the house
Figure 122: Where candles are used around the house, by census region, May 2011
Figure 123: Where candles are used around the house, by gender and household income, May 2011
Figure 124: Where candles are used around the house, by gender and age group, May 2011
Brand preferences
Figure 125: Brands of candles bought in past two years, by six age groups, May 2011
Figure 126: Brands of candles bought in past two years, by four household size groups, May 2011
Figure 127: Brands of candles bought in past two years, by census region, May 2011
Interest in U.S.-made vs. local/community-made products
Figure 128: Interest in U.S.-made vs. local/community-made products, by four household size groups, May 2011
Figure 129: Interest in U.S.-made vs. local/community-made products, by presence and number of children, May 2011
Figure 130: Interest in U.S.-made vs. local/community-made products, by census region, May 2011
Figure 131: Interest in U.S.-made vs. local/community-made products, by gender and household income, May 2011
Figure 132: Interest in U.S.-made vs. local/community-made products, by gender and age group, May 2011
Changes in lifestyle and spending habits in past year
Figure 133: Changes in lifestyle and spending habits in the past year, by four household size groups, May 2011
Figure 134: Changes in lifestyle and spending habits in the past year, by census region, May 2011
Figure 135: Changes in lifestyle and spending habits in the past year, by gender and household income, May 2011
APPENDIX—TRADE ASSOCIATIONS

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