On the Bright Side

Candle sales are up. Over the past few years, that statement could have been taken for granted as the explosion of the popularity of candles turned them from a trend to a gift industry staple. But at a time when few segments of the industry can boast more than flat growth, it is great news for retailers.

According to Unity Marketing of Stevens, Pennsylvania, retail sales of candles for 2001 are projected to grow 8 percent to reach $2.5 billion. Much of this growth occurred in the wake of the events of last fall. In fact, the National Candle Association says that some of its members reported an increase in sales of as much as 20 percent during that period. While some of those sales were undoubtedly due to short-term interest in community memorials, the enduring trend of "cocooning" — spending more time in and attention on the home — has put candles front and center.

Doug Hanchett, sales manager of Northern Lights Candles, Wellsville, New York, explains, "September 11 made a difference. I hate to say, but it was almost in a positive way for the candle industry. People are focused more on the home now, and candles are very comforting."

Andrew McClure, director of wholesale marketing for the South Deerfield, Massachusetts-based Yankee Candle, agrees. "The upside for us is that it is making people focus more on home and family."

Fragrance and color remain the key factors when consumers choose candles, according to the candle association. Unity Marketing reports that three quarters of all candles consumed in 2000 were scented.

"Without question, fragrance is dominating the candle business," says Chris Collins, senior vice president of sales for Candle Corporation of America, Chicago. "Choosing candles as home decor still has a place and probably always will, but fragrance has given [candle sales] legs like nothing else."

Two strong identifiable trends are emerging in candle scents. The first cashes in on the idea of home as a safe haven, with "edible" scents now more popular than ever.

Gary Forer, vice president of sales of national accounts at Aroma Candle & Scent Company, Kent, Washington, says that people want "scents that remind you of when you were growing up — something you know. We're developing fruit scents, more rounded and softer."

Nostalgia is key for Yankee Candle as well, as Doreen Smith, director of new product development, explains. "It's going back to the whole home and hearth thing — cooking, spices, homespun recipes like banana cream pie or blueberry muffins. Whether your mom really made those desserts or not, you like to imagine."

Collins agrees that "edible" scents are "far and away the trend. It was strong last year, and will continue to get stronger." But he focuses less on classic comfort food scents than on the inventive. "The more esoteric, the better," he says. Besides scents that appeal to the palate, Collins cites "unusual day-to-day fragrances" such as "leather couch" or "tobacco."

In the same vein, McClure says Yankee Candle is introducing a "clean cotton" scent, and adds that, "a lot of the gardening things are doing well."

The second fragrance trend focuses on escape. As consumers stick close to home, exotic fragrances are enjoying a surge in popularity, as people pursue the pleasures of faraway places without having to get up from the recliner.

Andrew McClure reports that there is an increased interest in his company's "coconut bay," "pineapple paradise," and "ocean water" scents. "We're seeing a trend to tropical themes that allow people to enjoy a fragrance that reminds them of a trip they were on, or a faraway place. Much as travel is decreasing, people still need to get away. So this is escape without risk."

Chris Collins says Candle Corporation will be adding to the armchair-travel phenomenon in candles when it debuts its tropical drink line featuring fragrances like "piña colada."

Despite the continued importance of color to candle shoppers, no definite color trend seems to be in place. Collins thinks greens and navy are strong, but adds, "Don't take that to the bank."

Doug Hanchett says Northern Lights' strongest performers are its staples such as cranberry, burgundy, green, and "Maine pine," but he considers that normal for the season. The company is introducing pastels and softer colors for spring, and in keeping with the popularity of "natural" products, Northern Lights is also debuting LumeVerde, a new soy wax line.

"No one color is the hottest thing right now," says Forer. He sees consumers as more open to innovative and eclectic looks during spring and summer, and drawn to traditional styles in the fall and holiday seasons.

Meanwhile, Andrew McClure reports that Yankee Candle is moving toward "warmer colors with a clean natural feel; nothing too edgy."

While sculptural, collectible, and designer candles have their market, and include new additions such as vases, bowls, and planters made of wax, they will continue to occupy only a niche within the whole candle spectrum. The main thrust of the market is toward burnables: jars, tapers, pillars, and votives. Of these, jars represent the biggest category, so much so that they are even cannibalizing sales of other burnables.

"The jar business has stolen the show," says Collins. "It's taken business away from tapers, even though they've been around for centuries and we firmly believe will make a nice comeback. But the jars will continue."

"People are looking for more glass and packaged goods such as jars, because there are so many pillars out there," adds Gary Forer.

Packaging is more important than ever to help candles stand out in a crowded market. Forer sees the trend in packaging as tending toward fresh and clean and more upscale looks. "Companies are seeking new jar shapes. If it was clear, now it's frosted. If it was frosted, now it's a gift set."

Hanchett reports that Northern Lights' Esque line of gift-boxed globe candles had larger than average sales, and the company plans to expand the line in the coming year.

Now that candles have become a fixture in seven out of ten American homes, according to the National Candle Association, the next step is the add-on sale, which is why candle accessories have expanded far beyond traditional candleholders.

"We're going to be offering more accessories this year," says McClure. "We're doing shades for our jars, plates to put our candles on, a votive holder, a tea light holder, a tart warmer, and candle toppers that will match the pattern."

"The consumer will now start decorating around their candles," says Collins. "You'll see further aggressive expansion into accessories, merging candles with the gift channel. The goal is to take the candle and make it a bigger purchase, and have the consumer purchase around their love for candles. We're coming out with an item we're very excited about: tea light frames."

Of course, the mainstream appeal of candles has resulted in stiff competition among retailers. Mass merchants and grocery and drug stores handle about 36 percent of total retail candle sales. According to Unity Marketing, mass merchants and discounters posted 14 percent sales growth in candle sales last year, while specialty retailers lost market share.

But while the mass retailer will always win on price, the specialty retailer has the advantage of being able to provide unique product. Gary Forer advises: "Don't be afraid of quality. Don't be afraid of having an upscale look. Don't be afraid of providing something fabulous. The mass retailers are going for the lowest price points. But people are not looking at price. They're shopping for what they want. So here is where independents have an advantage. They can bring in something interesting, and they don't have to go deep with it."

Candles are now a staple of the gift industry, and among the wide range of product that vendors are offering, there's plenty to suit every specialty retailer.