ETERNAL FLAME?

MARK HAMSTRA

Retailers need not worry that their candle departments are going to burn out any time soon. Although the terrorist attacks of last September spurred a sudden increase in the demand for candles -- both for memorial services and as home decor items -- the category is being driven by other, longer-lasting forces, according to retailers, vendors and analysts.

The increasing use of scented candles as air fresheners, women's use of aromatherapy candles and the incorporation of candles into the lifestyles of young consumers are all helping to propel the category.

"We've had steady growth over the last four years," said Charles Yahn, vice president, nonfood, Associated Wholesalers, York, Pa. "We're probably up 50% over the last four years."

In the fourth quarter, he said wholesale sales were up 18% over year-ago levels. He did not yet have retail results for the period, but analysts estimate that the recently ended fourth quarter was one of the strongest in recent memory for candle sales.

"It's basically part of women's well-being," Yahn said. "I think they are using them more for fragrance, for relaxation time, the whole deal. It isn't the cheap candles that are selling -- it's the aroma candles, and the good scents."

Retailers are beginning to take the category more seriously. Rather than simply displaying a few racks alongside their greeting cards, they are experimenting with more upscale displays and merchandising them in various areas of the store.

At Bashas', Chandler, Ariz., George Fiscus, vice president, general merchandise, said the chain has been experimenting since August with candle displays from some different suppliers, and merchandising them in different parts of the store. The retailer has been conducting several in-store tests of candle displays, now winnowed down to three versions.

"We're testing different areas, different mixes, in-line vs. stand-alone racks," Fiscus said. "We're going to see where the data leads us. I think we might end up having different arrangements for different clusters of stores, but it's a bit premature to see where the data's going to take us."

He said that by April he should have a better idea about what direction Bashas' would take in terms of merchandising candles.

Meanwhile Brookshire Brothers, Lufkin, Texas, is rolling out a test of a candle hutch display from Langley Products, Mount Sterling, Ky., to about 100 stores, according to Rick Langley, president, Langley Products. He said the three-foot-wide hutch displays, which carry about 25 varieties of jar and gel candles, have been tested in some gift shops but never in supermarkets.

"We think it's going to be a big program," he said.

Prices range from $7.99 to $19.99.

Brookshire Brothers was not available for comment on the new program.

Yahn of Associated Wholesalers said he thinks one of the factors driving increased sales of candles has been the improved fixtures for the products.

"The fixtures that we put in the stores are a lot better than they used to be," he said. "They are a lot more feminine than they used to be."

He said retailers can get the most out of the candle category by cross merchandising the items with other categories -- placing them in the pharmacy area and in the skin care section, for example. He also suggested that retailers package candles with other personal care or bath care items in sets for impulse purchases targeted at busy women.

Some supermarket buyers said the candle category can be challenging because trends in the colors and scents that consumers prefer can change quickly, and retailers have to monitor their inventories closely.

"Candles are a perishable item," said Jim Kane, director, retail systems, Zupan's, Vancouver, Wash., who also has responsibility for general merchandise at the five-unit chain. "They lose their scent, they lose their color. It's a matter of getting the right selection, without going too crazy. We have to watch it pretty close to make sure we don't get overloaded on that stuff."

Supermarkets compete fairly well with other classes of trade in the candle category, recent research shows.

According to data from Information Resources Inc., Chicago, candle sales in supermarkets increased 3.1% in the 52-week period ended Dec. 2, 2001, the most recent period for which sales figures were available. Supermarkets' total of $338.4 million during that time period was almost half the total candle sales of $702.4 million in food, drug and mass stores during that period.

According to "The Candle Report: The Market, the Industry, the Trends, 2001," released by Unity Marketing, Stevens, Pa., about 35% of consumers said they purchased candles in supermarkets. Pam Danziger, president, Unity Marketing, said candles are gaining appeal among younger consumers, which bodes well for the category in the long term.

"So much attention is focused on products for the baby boomers, but candles is a category that that does very well with younger people," she said. "In fact the purchase incidence is higher for Gen-Xers -- they buy more. There's a strong youthful skew toward the candle market that makes it so much more attractive than other consumer goods.

"I think young people have really incorporated fragrance and the effect of candles into their lifestyle," she said. "It's part of tradition for them, and it's hard to break a tradition like that."

Marcia Terstage, brand manager, Guild House, a division of American Greetings, Cleveland, agreed that candle use has become part of consumers' lifestyles.

"Today people are burning candles in multiples and they are burning them in every room of the home, so consumption is way up," she said. "A lot of this is now becoming habit."

Terstage suggested that retailers merchandise candles in the same aisle as air fresheners, among other areas of the store, because that's how customers are using the products. The floral area is another logical adjacency for candles, she said.

She also said scents are becoming more complex.

"It used to be very simple, just cinnamon and vanilla," she said. "Now we're seeing combinations of berries... now it's three berries, or vanilla hazelnut or dolce de leche, a little more complicated than basic vanilla. There's a lot more edibles we see on the horizon."

Kerry Clair, a spokeswoman for S.C. Johnson & Son, maker of the Glade Candle Scents line, agreed that food scents are hot.

"We just produced an apple-cinnamon candle that was very popular during the holidays," she said.

She also noted that candles are expanding beyond their traditional selling period in the fourth quarter to other times of the year. The company has added scents just for fall, she pointed out, and she said some retailers have done well with summer displays highlighting candles as a patio accessory.

Both Terstage and Clair emphasized the importance of offering styles and colors that fit in with trends in home decorating.

"Retailers have to be on trend with home-decor colors," said Terstage.