The market for home fragrances sustained its momentum in 2021 growing by a whopping 16%. For the first half of 2022, substantial growth continued in the face of inflation, product price increases, and supply chain issues, according to our recently published Home Fragrances: U.S. Market Brief. What is driving growth in this high opportunity market? A few of the key factors we observed are described below.
Brick & Mortar is back!
From a channel perspective, the growth of in–person specialty stores substantially outpaced the market average, followed by mass merchandisers. Vertically integrated stores, encompassing branded stores such as Bath & Body Works and Yankee Candle, captured most channel sales and showed dynamic gains.
Bath & Body Works remained the overall leading retailer in the channel, recording an unprecedented growth of 36% in 2021. The retailer benefited the most from the reopening of its brick-and-mortar stores in malls.
Multi-wick formats continue to drive interest
From a premium front, LAFCO’s Absolute Collection is an example of how marketers pair highly concentrated fragrance oils, wax, and beautiful handblown glass containers to create unique aesthetic experiences.
To commemorate the brand’s 30th anniversary in June 2022, LAFCO introduced Luxe 4-wick, its largest candle to date with a 200–hour burn time retailing for $375, along with a new limited-edition scent, Paradiso Fig.
Bath & Body Works’ banner year was led by its three-wick candle business, and fast-growing indie brand Boy Smells had success with its 27 oz. Magnum line, which debuted at the start of 2021.
New players coming into the fray
The market witnessed an influx of brands capitalizing on positive consumer behavior toward candles and seeing high growth opportunities in home scent. Most brand entrants came from the beauty/fragrance and lifestyle space or were new celebrity brands positioned around home care. Newcomers include Homecourt, Safely, Ouai, Snif, and Pattern, among others.
Engaging Gen-Z consumers
Emerging brands such as Otherland and FORVR Mood lean on social media platforms to engage with the younger audience. Otherland connects with consumers through “Behind the Scents” posts on Instagram, giving followers a look into the primary ingredients and inspiration for their scents.
FORVR Mood places heavy emphasis on TikTok and Instagram, luring the younger generation with playful product names such as their summer candle “Tropic Like Its Hot” and their recent bestseller “Thirst Trap.” Both brands registered double- to triple–digit sales growth from 2020.
Reaching consumers at home
A key success factor for the home fragrance market has been innovative ways of reaching consumers at home, which became more valuable than ever in 2020 and has continued to be important. For instance, LAFCO’s sampling program has provided consumers with the tools to experience fragrance with ease prior to investing in a luxury candle or reed diffuser.
Another example is Laura Slatkin’s (founder of Nest) creative virtual events such as “Scent Your Spring” and “Scent Your Sanctuary.”
Our recently published Home Fragrances: U.S. Market Brief provides unparalleled insights on market size and growth, key drivers and trends, the competitive landscape with highlights for emerging brands, channel dynamics, challenges and opportunities, and a five-year outlook.
Written by Karen Doskow, Director of Consumer Products and Dana Kreutzer, Project Lead, Beauty & Personal Care.
