Home Fragrance Market - Global Outlook and Forecast 2023-2028

The global home fragrance market size crossed USD 9.15 billion in 2022 and is expected to reach USD 11.94 billion by 2028, growing at a CAGR of 4.54% during the forecast period. Home fragrances can create a pleasant atmosphere as well as mask odors. There are several home fragrances, such as scented candles, reed diffusers, room sprays, essential oils & wax melts, incense sticks & cones, and other products such as potpourri, sacks & sachets, scented ceramics. These products are available in various colors, designs, and types, which can enhance the aesthetic of the home as well as help in the well-being of the people. Further, the scented candle segment is one of the fastest-growing home fragrance industries.

Key Winning Imperatives in the Global Home Fragrance Market

• A candle's personalized and emotional appeal is an increasingly significant factor in a consumer’s purchasing decisions.
• Eco-friendly packaging for home fragrance products with nature-friendly and organic components, such as corrugated hemp boxes and jute bags, will support the growth of sustainable packaging for home fragrance products.
• Aromatherapy helps in easing stress, depression, and anxiety and boosts the feeling of relaxation, and improves sleep.

MARKET TRENDS & OPPORTUNITIES

Rising Preference For Personalized Scented Candles
Nowadays, candles have become household accessories to have in the home. The candle industry has experienced a big boom in the past few years. The personalization of candles is becoming more popular, and people are looking for personal stamps on a product with the freedom to design and customize products according to their preferences. People looking to customize candles with their own aromatic choices have been creating opportunities for home fragrance market players to offer new products to consumers.

Shift In Focus Toward Sustainability
Modern consumers are highly concerned about environmental maintenance, which makes them adopt sustainable choices. Therefore, eco-friendly home fragrance packaging boxes have more preference over the rest of the products in the competition. Also, sustainable packaging will be aided by eco-friendly packaging for home fragrance products made of natural and organic materials, such as jute bags and corrugated hemp boxes.

Rising Penetration Of E-Commerce Channels
E-commerce sales have steadily risen for years, and the increase in internet penetration has supported the growth worldwide. Due to the rising disposable incomes and changing lifestyles in several regions, the demand for home fragrances has significantly increased. E-commerce platforms such as Amazon, eBay, and Shopify are gaining huge traction among consumers for purchasing home fragrances such as luxury candles, reed diffusers, room fresheners, etc. E-commerce retailers market artistically designed home fragrances, especially candles with elaborate shapes and sculptural crafting. This has created a spike in consumer interest in purchasing home fragrances and boosted the global industry.

INDUSTRY RESTRAINTS

Potential Health Risks
Several fragrances can lead to health problems. According to Healthdirect, around one in three people report health problems when exposed to fragrance products. These health problems can include headaches, asthma attacks, hay fever, nausea, migraine, seizures, breathing problems, rashes, congestion, and dizziness. Inhaling essential oils that are diffused is generally safe for most people. Some people might react to the fumes and get an asthma attack. In addition, essential oils can cause severe lung infections, known as pneumonitis, for some people. Therefore, such factors with the potential for health risks are anticipated to hinder the growth of the home fragrance market during the forecast period.

SEGMENTATION INSIGHTS

INSIGHTS BY PRODUCT
The candle market dominated the global home fragrance market, accounting for over 37% share in 2022. Mostly, a scented candle comprises a combination of natural and synthetic fragrances. The fragrance material might be derived from essential oils or synthetic aroma chemicals. Before, candles were necessary; now, they are used as a luxury to enhance homes. Initially, they were very simple in design and used to light the night, although now they work to offer scent and decorative aspects. Scented candles are popular and bring fresh, new scents to the consumer. The segment is anticipated to generate additional revenue of USD 1.24 billion during the forecast period and is growing at an absolute rate of 36.43% by 2028.

INSIGHTS BY FORM
The liquid form segment held the largest global home fragrance market share in 2022. Liquid home fragrance product includes essential oils, room sprays, etc. They are a mixture of aroma compounds, fixatives, and solvents in liquid form. Further, essential oils are concentrated hydrophobic liquids containing volatile chemical compounds from plants, i.e., easily evaporated at normal temperatures. The segment is anticipated to generate additional revenue of USD 1.5 billion during the forecast period.

INSIGHTS BY DISTRIBUTION CHANNEL
The supermarkets & hypermarkets distribution channel dominated the global home fragrance market and was valued at over USD 4 billion in 2022. The segment includes home fragrance products such as scented candles, reed diffusers, room sprays, incense sticks & cones, etc., in supermarkets & hypermarkets, which are primarily self-serving shops offering a wide variety of food and other household products. Most major players have started offering a broad range of home fragrance products through supermarkets and hypermarkets. The distribution methods are the key influencers in determining the sales and industry share of the brands in the global home fragrance market. Home fragrance product distribution is highly significant and requires research to understand the most effective and safe channel. Major retail channels like Walmart, Costco, Walgreens, Sainsbury’s, and Morrisons are major sources of sales for home fragrance products in western countries.

GEOGRAPHICAL ANALYSIS

North America dominated the global home fragrance market in 2022, valued at over USD 3 billion. The rising preference of consumers towards sustainable and natural products, increasing disposable income, and growing prevalence of lifestyle well-being are the factors supporting the demand for home fragrance products in the region. Furthermore, the U.S. and Canada are the major industries in the region. The most popular types of candles are container and jar candles with American consumers. Consumers are progressively purchasing candles as a focal point for their home décor and aromatherapy, such as stress reduction and relaxation.

The Europe home fragrance market accounted for a 30% share of the global market in 2022. Europe accounts for about two-thirds of worldwide candle imports, making Europe a potential candle industry, and candles play a significant role in wellness at home. Further, the APAC home fragrance market is growing at the fastest CAGR during the forecast period. China, India, Japan, Australia, and South Korea are the key countries in the region. Growing preferences of consumers to spend on aesthetic home fragrances are anticipated to drive the home fragrance industry in the region.

COMPETITIVE LANDSCAPE

The global home fragrance market is highly fragmented, and the degree of fragmentation is expected to accelerate during the forecast period. There is a significant number of global and domestic vendors across the geographies. While large organizations with a considerable budget have pricing, flexibility in approach, and the ability to customize solutions as their top criteria, smaller organizations do not emphasize reporting as much. Further, pricing is the top criterion, while expertise and testimonials are at the bottom. Vendors compete in terms of brand value, customization ability, price, skilled workforce, and technological capability.

The global home fragrance market leaders include Procter & Gamble, S.C. Johnson & Son, Godrej Consumer Products, Reckitt Benckiser Group, and Newell Brands. Some of the strategies among key players in the market for home fragrances are product launches, mergers, acquisitions, and collaborations. Mergers and acquisitions are common within the industry as players look to expand and become more comprehensive in their offerings. A trend witnessed among vendors in a landscape where consolidation occurs is the focus on merging two platforms. As large players join hands, resources are spent on merging rather than innovation. Product innovation and technological developments have led to additional benefits of using home fragrance products. Companies are launching new and advanced products to strengthen their portfolios and cater to the industry’s requirements.