Home Fragrance - Fanning the flames

Technology, luxury and pampering are all helping to boost the global home fragrance market as people spend more and more time and money creating the perfect atmosphere at home

Gone are the days when the term ambient fragrance suggested the odd patchouli joss stick. The market is now flooded with products in every conceivable format, fragrance and price range and sales are booming. According to Euromonitor, worldwide sales grew 14.71% to reach a total of $6.12bn in 2004.

In fact ambient scents are performing so well that every region saw a significant increase in value sales. Western Europe was the largest region with a retail value of $2.29bn (+16.1%), Northern America saw sales of $2.16bn (+16.5%), Asia Pacific took third place with $980.4m (+7.6%), then came Latin America leaping a massive 21% to $224.6m and Eastern Europe with a total of $202m (+13.9%). Africa and the Middle East grew 8.4% to a value of $146.1m and Australasia gained 18.5% for $112.2m. The US is the largest market with a 34% share ($2.08bn), Japan is next with a 12% share ($734.97m), the UK with an 11% share ($673.7m), France with 9% of the market ($551.2m) and Italy with 5% ($306.2m).

In terms of format, no category lost value, but some formats were notably more dynamic than others. The worldwide sales figures do, however, mask losses on an individual country basis. “When looking at the market on a country level the patterns vary quite significantly across regions. For example, while electrics are growing strongly in markets such as the US and the UK, they have seen a sharp decline in Japan. In Japan, gels and liquids are driving the market,” explains Maria Lindahl, industry analyst for Disposable Paper Products and Household Care at Euromonitor. Sprays are still the largest category worldwide with a value of $1.635bn (+14.4%) “Sprays remain the biggest format globally because spray is a well established format with penetration across virtually all markets, whereas more premium priced products such as electrics are generally targeted at developed markets,” says Lindahl. Even so, electric air fresheners surged 25.6% to a value of $1.547bn, car air fresheners climbed 11.4% to $941.2m, gels rose 9.8% to $751.2m, other products totalled $520.1m (+10.8%), candles grew just 1.8% to $479.3m and liquid air fresheners increased 19.9% to $251.1m.

Between them, Multinationals have the home fragrance market largely sewn up. “The industry is rather consolidated,” comments Lindahl. “The top three brands account for the vast majority of sales.” The leader is SC Johnson’s Glade/Brise, followed by Reckitt Benckiser’s Air-Wick and Sara Lee’s Ambi Pur, Renuzit (Dial/Henkel), Oust (SC Johnson), Shaldan and Shoshu (ST Chemicals).

Behind the growth lie a number of trends that are moving the ambient fragrance market from commodity to luxury. Where once the market was the preserve of air fresheners designed to mask unpleasant odours, clever marketing has led to a wholesale change in consumer perception. Increasingly, scents are being launched to reflect a season or mood and consumers are lapping them up. Theresa Molnar, executive director of The Sense of Smell Institute agrees. “First it was air fresheners to cover a bad odour. Now it’s more of a pro-active scenting of the house - not to cover anything up but to put your own imprint on the house.”

Rising demand for individual scents has spearheaded the launch of a plethora of luxury and niche brands. The beauty trade show Cosmoprof dedicated an entire area to showcase super premium and niche beauty brands last year, including candles by prestige brand Diptique. At Italy’s Fragranza Fair in October, a show dedicated to niche brands, Capri’s Carthusia launched four scented candles. In France, niche perfumery label Institut Très Bien has introduced Très Bien Bougie, a candle fragranced with citrus top notes, a heart of flowery accords and musks at the base. In the UK, London independent perfumery Ormonde Jayne has found great success creating unique scented candles. “There are now three different groups of air care products: mass, prestige air care brands and prestige fashion brands,” points out Erik Troost, marketing manager, home care at IFF. Both Armani and Roberto Cavalli, for example, have launched room fragrances in the last year. The top end of the market has prices to match; for example, Jo Malone’s latest Fragrance Combining Candle retails at £160.

Home improvement

Competition is fierce. “It’s such a competitive market, with every fashion house, parfumier and interior designer producing a home fragrance range. Only products with a point of difference will do well,” says Max Konig, commercial and marketing director for interior design company Nina Campbell.

The terminology has changed too. Luxury home fragrance products are now referred to by manufacturers as “air care”, building an association with products sold on the beauty market and, more importantly, distancing the category from the more mundane cleaning agents sector. SC Johnson has dubbed the new concern for aesthetic appeal “scenterior design”.

Indeed interior design has been hugely influential on the home fragrance market. The mass market multinationals are also battling to make air fresheners and scented candles desirable objects that people feel able to display in their homes. SC Johnson bowed in with Glade Glass Scents, an air freshener contained in an ornamental glass cube. Sara Lee’s Ambi Pur released its Solo range onto the market last year. Solo is a line of electrical diffusers with a choice of colour panels to suit every room scheme. The plug-ins are white or pale yellow and include a set of interchangeable colour clips to help them tie in with decor. Grey’s (LCS/Guaber) Deo Bouquet is shaped like a vase and topped with a bouquet of faux flowers.

Of course different markets respond differently to these trends. UK consumers are notorious for their love of prestige and Germans have a penchant for private label. “Differentiation with new or added benefits is important in a market like home fragrance where most products are commoditised. But figuring out how much people are willing to pay for this isn’t easy,” says Susan Babinsky, senior vp of Kline’s Consumer Products consultancy.

According to Mintel, the British have the highest spend per capita in Europe, splashing out €22.13 each a year. “It is Britain’s love of premium products, such as plug-ins, that has resulted in such a substantial household fresheners market. This trend towards premiumisation is set to continue, with the UK market expected to grow by 47% over the next five years,” says Michelle Strutton, senior consumer analyst at Mintel.

The French are even bigger users, garnering a penetration of 83% versus the UK’s 78%, though the French spend less per person, on average €18.50 each per year, while the Germans spend just €16.50 each. “German consumers are highly cost conscious,” says Strutton. However, with Ikea’s entry into the market for scented candles at bargain prices, the Germans can sleep soundly.

Private label finds greater favour in some regions than others. “In the US the share of private label has declined steadily over the past four years,” says Lindahl. “Strong branding has discouraged US consumers from switching to private label, while low prices leave little leverage for retailers to undercut. In Europe private label products have become increasingly sophisticated and in Western Europe there has been an overall increase in trust in private labels, which have evolved from being perceived as cheap imitations of the real thing to quality products offering good value for money.”

But as fragrance house Quest’s home care expert points out, private label ranges do not necessarily entail bargain basement prices. “The consumer will accept different price levels from a retailer as can be seen by the three different ranges in Intermarché, but it is only really in the UK where major grocery retailers can offer a selection priced above that of the brands.”

Winds of change

Whereas the original spur for growth in the home fragrance market holds true - that consumers are placing greater importance on decor and want their homes to look and smell good - recent years have revealed new motivating factors behind purchases. First, consumers have started to buy home fragrance products - particularly candles - as part of a bathing or relaxation ritual, mimicking the atmosphere of spas and using the candles in conjunction with other pampering treatments.

This trend has seen a number of beauty brands launch candles in the last year. Abahna, a modern bath label that has quickly reached out to more than 30 stockists in the UK as well as distributors in France, Italy, Greece, Sweden, the US and Hong Kong, expresses the trend as ritualistic. “To Abahna, the bathing environment is just as important as what you put in the water. Flowers, music and flickering candles will all help to soothe or stimulate the senses,” founder Claire Croft explains. “I’ve always loved the multi-sensory experience that bathing rituals offer.” Italian cosmetics brand Collistar has added to its bathing range with Candela di Benessere (well-being candle), Aveda has launched its Shampure and Color Conserve products in candle form and UK chain Boots introduced a number of new bath ranges in 2005, including Karmatherapy and Naked, both with scented candles designed to be used as part of the bathing ritual. In addition Boots signed a deal with designer Julien Macdonald to become the exclusive stockist of his home fragrance range.

Multinational home fragrance brands are also taking advantage of this home spa movement. Ambi Pur has launched a range of scented candles, including Soothing Bath. By adding aromatherapy properties to home fragrance, manufacturers can command a higher price point. Strutton explains: “The popularity of aromatherapy has had an impact as shoppers trade up to air fresheners which create a certain ambience.”

The second major motivator is the uneasiness caused by this decade’s terrorist activities and natural disasters has helped to encourage the growth of the home fragrance market as socialising is pushed back into the home. People are keen to create a soothing atmosphere through the use of scented products. Cosseting and nostalgic scents are becoming increasingly popular. Laurent Delafon, UK head of prestige brand Diptyque agrees. “It’s the cocooning factor. Today people want a living space that reflects their likes or dislikes and serves as a nest away from the troubles outside.”

Entertaining indoors has meant an increasing interest in seasonal and occasional products, designed to create a different ambience for each festival on the calendar. “We see seasonal products appearing more and more in a wider range of formats,” comments Troost. Ambi Pur, for example, has developed two new scents - Fireside Glow, which employs notes of cinnamon and bitter chocolate, and Winter Dream, which the company says evokes the smell of baking and comforting hot milky drinks. Procter & Gamble launched the Scentstories disk entitled Celebrating the Holidays, containing scents such as Making a Gingerbread House and Cookies Warm from the Oven, and a spokesperson at Space NK reports that its limited edition Christmas candle sold out before Christmas. Quest’s home care expert pinpoints outdoor fragrance as the next big thing as the summer approaches.

The third factor behind change is that we are working more than ever before. With even the French mooting the disintegration of their limit on working hours, the average householder is spending less time at home and doing less housework. Shortcuts such as air fresheners can help make a house appear clean, despite a less rigorous approach to hygiene. “Brands using odour neutralising properties (eg Oust, Neutra Air and Febreze) have proved popular with consumers and revitalised sales of sprays in markets such as the US,” says Lindahl. ST Chemicals even launched Air Wash under its Shoshu Riki banner, a product that promises to “wash the air” through use of a deodorising mist with antibacterial properties to cleanse the air of foul odours.

Advances in technology

Strutton confirms this trend. “Today, time pressure and the increasing importance of leisure commitments have eroded the traditional values that used to put housekeeping as a top priority. This shift in lifestyle has seen a departure from housekeeping and the loss of skills to keep a house clean and fresh. As such, there is now a demand for products that allow consumers to spruce up with minimum effort.” And when she says minimum effort, the multinationals have taken her at her word. Technological solutions now mean you don’t have to lift a finger. Ambi Pur recently launched the Sensor, a plug-in device equipped with a light-sensitive switch to automatically switch itself off at night and on again in the morning. P&G’s Febreze Scentstories, a device similar to a CD player, can change between scents, releasing a new fragrance every 30 minutes. Reckitt Benckiser’s Freshmatic is an automatic spray that includes a battery powered timer switch to allow the fragrance to be released at pre-set intervals to suit individual needs. Grey’s Deo Cocoon is designed to release its fragrance automatically at 25 minute intervals to maintain a consistent and uniform scent. Meanwhile, Renuzit produced Airlets, discreet plug-ins with adjustable fragrance levels that promise to deliver fragrance for 90 days, and Shoshu developed Shoshu Plug, an electric room deodoriser that the company claims has a repeat purchase rate of over 60%.

This kind of innovation is on the up in the room fragrance world. Lenka Contreras, vp and head of consumer products practice for Kline’s research division, is enthusiastic about the value of technology to the market. “The new diffuser and room spray products were successful last year because they offered a twist or an additional benefit and consumers find them easy to use. Marketers are emphasising the convenience of diffusers that keep working for an extended period and can be left unattended, unlike scented candles.” Lindahl points out that new technology prompts a healthy curiousity. “While the fragrance itself is often the determining factor in the purchasing decision, consumers are often more willing to try new and exciting formats.”

Japanese company Pixen has even developed fragrances that are emitted when a mobile phone rings. Among them is a fragrance for the cartoon character Hello Kitty. It may only be a matter of time before the Orange telecomms company catches on to a citrus scent.

Corporate image

Innovations in fragrance technology have not passed the corporate world by. Research into the ability of scent to make workers more productive and shoppers more receptive has been in the air for some time, but now fragrance specialists have taken the concept of corporate fragrance to a whole new level. Pixen was originally well known for its DAA system, a computer controlled device that prevents fragrance becoming oppressive that has been used in public toilets and medical offices across Japan.

The next step in aroma technology was showcased by IFF technical consultant Christoph Hornetz and perfumer Christophe Laudamiel, working in conjunction with Norwegian fragrance artist Sissel Tolaas as part of a multisensory hotel suite concept. Through microencapsulation technology the company has devised a way to scent fabrics, carpets and even paint. The fragrance is released upon friction and is easily renewable. Such technology holds endless possibilities. IFF intends to develop this concept into creating unique fragrances for large hotel chains. “Just as everyone’s home has a particular scent, hotels could have a unique fragrance. This would help regular travellers feel more at home and promote a more consistent image for hotel chains,” said Laudamiel.

Some companies are eager to embrace such concepts. Singapore Airlines is pioneering the introduction of scents into the cabins of its planes and Westin Hotels & Resorts has created a white tea scent to pump into its communal areas. The Mariott hotel chain, meanwhile, has commissioned Bath & Body works to provide an aromatherapy bath kit for its guest rooms. And Naniwa Meibutsu Kaihatsu, a Japanese cross-industrial association, has developed a range of air fresheners to evoke the various scents of the city of Osaka. One concoction, Tenpozan Omoide no Kaori, claims to evoke the scent of a first date on the Ferris wheel in Osaka’s tourist district.

Making people feel at home is clearly big business and the potential of the market is available to whoever can tap into the right atmosphere. However, the process is not without risks. Scent is highly personal and tastes vary widely from region to region. In France, for example, lavender is a functional note, associated with cleaning products, while in the UK it tends to be associated with luxury. Valerie Roubaud, head of France’s Terre d’Oc, suggests that the store’s gourmand flavours have been hard to shift in the UK, while caramel and cake flavours do extremely well in France. Reckitt Benckiser reveals that southern Europeans have demonstrated an aversion to vanilla while Westin’s trials revealed that men dislike overly floral blends.

Classic citrus accords are a reasonably safe bet. “The trend for fruity fragrances is still going strong. Some are light and refreshing (melon and mandarin), others rich and soft (blackcurrant and pear). Spices can be added to fruit fragrances to make them warmer,” says a spokesperson from Renuzit.

Building brands

Industry experts predict that tomorrow’s news lies in the untapped potential of the men’s market. “I think a man will buy a home fragrance for the same reason as a woman, because surrounding ourselves with fragrance at home is part of feeling good,” forecasts Jo Malone, who recently launched Napa Leather Pot Pourri, fragranced wooden and leather balls with masculine appeal. Comme des Garçons has moved into the area with the Unisex 2 Candle featuring a bay leaf note to add a touch of masculinity to the mix, and Oberg has taken the concept a step further with the launch of male home fragrance as a candle and room spray with a cedar note.

Perhaps museums and galleries might also be the customers of the future. Already Quest has contributed to an art installation at the ICA and Symrise has created five scents for the i-D exhibition at the Fashion and Textile Museum.