Air Care in India

AIR CARE IN INDIA Euromonitor International July 2013

AIR CARE IN INDIA

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LIST OF CONTENTS AND TABLES Headlines ..................................................................................................................................... 1 Trends .......................................................................................................................................... 1 Competitive Landscape ................................................................................................................ 2 Prospects ..................................................................................................................................... 3 Category Data .............................................................................................................................. 4 Table 1 Table 2 Table 3 Table 4 Table 5 Table 6 Table 7

Sales of Air Care by Category: Value 2007-2012 ......................................... 4 Sales of Air Care by Category: % Value Growth 2007-2012 ........................ 4 Air Care Fragrances Rankings by Value 2007-2012 .................................... 4 Air Care Company Shares 2008-2012 ......................................................... 5 Air Care Brand Shares 2009-2012 ............................................................... 5 Forecast Sales of Air Care by Category: Value 2012-2017 .......................... 6 Forecast Sales of Air Care by Category: % Value Growth 2012-2017 ......... 6

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AIR CARE IN INDIA

AIR CARE IN INDIA HEADLINES  Air care grows by 17% in current value terms to reach Rs1.7 billion in 2012  Consumers continue to switch from traditional offerings to sophisticated aerosols/sprays  Average unit prices grow further due to increase in uptake of modern formats such as aerosols and car air fresheners  Dabur India Ltd maintains lead with value share of 38% in 2012  Air care is predicted to grow by a constant value CAGR of 9% to reach Rs2.5 billion by 2017

TRENDS  Positioned and promoted as a lifestyle product, air care emerged as a promising category over the review period. Urban consumers continued to switch from traditional offerings such as incense sticks known as agarbattis locally, to the more sophisticated spray/aerosol format for their homes in 2012. Additionally, to leverage on the growing shift and potential growth of modern air fresheners, leading players such as Godrej Consumer Products Ltd introduced air fresheners under the brand AER.  Air care grew by 17% in current value terms to touch Rs1.7 billion in 2012, which was marginally faster than the review period growth, mainly due to the growing number of consumers who were willing to experiment with the modern formats such as aerosols to keep their homes odour free. Air care began to be associated as a lifestyle product and attracted the consumers to buy different variants including spray/aerosol air fresheners such as Air Wick.  Being the smallest in sales, car air fresheners continued to be record the fastest current value growth of 28% in 2012. The demand for car air fresheners continued to be fuelled by the growing desire of consumers to maintain freshness in their cars by using appealing fragrances. Additionally, car air fresheners benefited from the growing disposable incomes that usually result in increased spend on lifestyle products.  Average unit prices continued to increase due to the growing uptake of modern formats such as spray/aerosol and car air fresheners. Furthermore, the launch of aerosols in different fragrance variants which are marginally more expensive drove the unit prices even further in 2012.  Other air care which includes solid air fresheners such as Odonil Air Freshener and incense sticks, locally known as dhoops and agarbattis, recorded slowed growth, although it continued to be the second largest in terms of value sales in 2012. Other air care including agarbattis continued to enjoy huge popularity mainly due to use in religious rituals including Pujas and everyday prayers in rural and urban areas as well. However, consumers started to shift from such traditional air fresheners to modern formats such as spray/aerosols to freshen up homes and remove offensive odours. The switch from other air care mainly by urban consumers largely contributed to a slowdown in growth of older forms such as dhoops.  Air care products continued to be available in sprays, solid formats, and electric air fresheners in 2012. Of all, spray/aerosol started to gain strength mainly due to the ease of use and effective action associated with it. Spray/aerosol brands such as Odonil, Air Wick, Ambi Pur, and Premium continued to witness a rise in sales due to growing acceptance and uptake.

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AIR CARE IN INDIA

Further, manufacturers such as Reckitt Benckiser started to launch aerosols in different fragrance variants to suit consumers‟ preferences.  Electric air fresheners continued to be very small in 2012. The major bulk of air fresheners available in the country continued to be plug-in electric air fresheners. Reckitt Benckiser launched Air Wick to gain the first mover advantage and was very innovative with its product launches. For instance, Air Wick Freshmatic dispenses its scent at timely intervals to inject new fragrance to its surroundings. Consumers of today now expect such added functionality in air care.  Lavender continued to be the most popular fragrance in air care in 2012. However, jasmine gained more popularity to shift sandalwood to gain the second leading position, followed by rose and sandalwood. Such natural fragrances continued to gain popularity amongst consumers.

COMPETITIVE LANDSCAPE  Dabur India Ltd continued to dominate air care with value share of 38% in 2012. The company has a long established leadership in air care under its brand Odonil which has continued to enjoy huge popularity amongst consumers for years. Furthermore, with the launch of Odonil Occasions that offered different formats of air care during the late months of 2011, the company tried to gain further penetration of urban and rural homes. However, Procter & Gamble‟s Ambi Pur offered strong competition to Dabur‟s Odonil aerosols in 2012, which resulted in the company losing two percentage points in value share.  Procter & Gamble experienced the biggest increase in share, gaining two percentage points due to its brand Ambi Pur which was promoted across the country in 2012. The brand witnessed a rapid increase in sales mainly due to its affordability and easy availability in different formats and variants including aqua, lavender and vanilla for car air fresheners. The brand was heavily advertised with the tag line “Open your car to Ambi-pur freshness”. The company also introduced a new air freshener format for homes.  Air care continued to be equally dominated by domestic and international manufacturers including Dabur and Reckitt Benckiser in 2012. However, domestic manufacturers including Dabur India Ltd started to lose share despite new launches such as Odonil Occasions in 2011. International brands such as Air Wick from Reckitt Benckiser and SC Johnson continued to compete aggressively with the domestic brands in 2012.  In 2012, Godrej Consumer Products Ltd introduced air fresheners under the brand AER and re-entered air care after its exit in 2009. AER introduced the spray/aerosol format for use in the home and car dash board diffusers for cars in three fragrance variants including cool, petal, and fresh. The launch of AER is likely to intensify competition, with the presence of many international and domestic manufacturers‟ brands including Ambi Pur and SC Johnson‟s Glade air care.  Procter & Gamble invested huge amounts of money in promoting its brand Ambi Pur which helped the company to gain share in 2012. Ambi Pur devised the „Who will Drive Me Crazy‟ campaign aimed at creating the need for air fresheners in cars. Procter & Gamble ran road campaigns by collaborating with Neha Dhupia (a Bollywood actress) who played the unexpected guest who would stop any car and ask for a lift. She would choose to stay inside or come out of the car depending upon the freshness inside. The campaign pushed the idea of being „guest ready‟ with a fresh car which was popular with consumers.  In air care, car air fresheners, and spray/aerosol air fresheners would be considered as premium and standard mainly due to the price of the product. Other air care including dhoops and agarbattis continued to be considered as economy brands. In 2012, premium and

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AIR CARE IN INDIA

standard brands such as Air Wick offered tough competition to economy brands for urban consumers including people who drive cars. Urban consumers increasingly replaced dhoops with car air fresheners in their cars. However, economy brands such as Mangaldeep sticks continued to be popular amongst rural consumers and for use in pujas mainly.  Private label including Paradise Air Freshener from More Supermarket, Great Value from Easy Day, and Frshomz by Reliance Retail gained huge popularity amongst consumers mainly due to the lower price compared to branded air care. Private label continued to offer air care in the form of cubes and blocks and also offered combination packs that offered different formats of air fresheners.

PROSPECTS  With improving living standards and increasing demand for aesthetics, air care formats such as aerosols, car air fresheners and electric air fresheners are likely to experience huge acceptance in urban areas mainly over the forecast period. Additionally, the forecast period would also continue to witness a huge shift from traditional air care such as dhoops to spray/aerosol and electric air fresheners.  Air care is predicted to grow by a constant value CAGR of 9% to reach Rs2.5 billion by 2017. The growth in air care would be faster than the review period when air care had a very small value sales base. During the forecast period, air care is likely to gain further penetration in urban areas with the help of new products such as car air fresheners that are gaining huge acceptance. Additionally, Tier II households would increasingly switch to aerosols and electric air fresheners from agarbattis and cube formats of air fresheners.  Rural and Tier II and III consumers might continue to use cheaper alternatives including dhoops mainly due to the affordability. Additionally, any further increase in the prices of newer formats of air fresheners including electric air fresheners and aerosols, which are already considered as expensive are likely to hamper growth over the forecast period. Additionally, consumers might switch to natural products such as aroma oils, potpourri, and dried flowers, as they are considered more environment friendly and cheaper compared to other air care.  Car air fresheners is likely to grow by a constant value CAGR of 16% and will continue to record the fastest growth over the forecast period. With improving lifestyles and greater emphasis on aesthetics, consumers are likely to spend a huge amount on car air fresheners, leading this product to continue to be the key contributor to growth of overall air care. Such strong growth in car air fresheners is also supported by the rapidly growing sales of automobiles including cars over the forecast period.  Average unit prices are likely to grow further mainly due to the growing uptake of spray/aerosol and car air fresheners over the forecast period. Additionally, the launch of premium products including gels and candles would drive the unit prices even further.  New product launches such as AER are likely to experience a huge increase in sales over the forecast period. Since spray/aerosol, and car air fresheners are newer products, there is enough room for all companies to grow. Furthermore, the potential growth in air care might attract international and domestic manufacturers to launch more products and formats such as candles and gels.  Leading manufacturers are likely to include aromatic oils in spray/aerosol and electric air fresheners as the main ingredient to increase effectiveness. Other international manufacturers are also likely to introduce other formats of air care including candles and gels that are popular for the slow fragrance release across the globe. Procter & Gamble has announced plans to enter the premium gel air fresheners.

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AIR CARE IN INDIA

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CATEGORY DATA Table 1

Sales of Air Care by Category: Value 2007-2012

Rs million

Candle Air Fresheners Car Air Fresheners Electric Air Fresheners Gel Air Fresheners Liquid Air Fresheners Spray/Aerosol Air Fresheners - Concentrated Spray/ Aerosol Air Fresheners - Standard Spray/ Aerosol Air Fresheners Other Air Care Air Care Source:

2007

2008

2009

2010

2011

2012

136.4 326.2

166.8 365.8

209.7 420.7

264.0 501.2

347.1 594.8

443.8 692.2

-

-

-

-

-

-

326.2

365.8

420.7

501.2

594.8

692.2

355.5 818.1

382.4 915.0

402.2 1,032.5

429.3 1,194.5

476.6 1,418.6

521.7 1,657.7

Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 2

Sales of Air Care by Category: % Value Growth 2007-2012

% current value growth

Candle Air Fresheners Car Air Fresheners Electric Air Fresheners Gel Air Fresheners Liquid Air Fresheners Spray/Aerosol Air Fresheners - Concentrated Spray/Aerosol Air Fresheners - Standard Spray/Aerosol Air Fresheners Other Air Care Air Care Source:

2011/12

2007-12 CAGR

2007/12 Total

27.8 16.4 -

26.6 16.2 -

225.4 112.2 -

16.4 9.5 16.9

16.2 8.0 15.2

112.2 46.7 102.6

Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 3

Air Care Fragrances Rankings by Value 2007-2012

ranking

Lavender Jasmine Rose Sandalwood Floral Aqua/Water Lemon/Citron

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2007

2008

2009

2010

2011

2012

1.0 2.0 4.0 3.0 7.0 6.0 5.0

1.0 2.0 4.0 3.0 7.0 6.0 5.0

1.0 3.0 4.0 2.0 5.0 6.0 7.0

1.0 3.0 5.0 2.0 4.0 7.0 6.0

1.0 3.0 5.0 2.0 4.0 6.0 7.0

1.0 2.0 3.0 4.0 5.0 6.0 7.0

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AIR CARE IN INDIA

Source:

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Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 4

Air Care Company Shares 2008-2012

% retail value rsp Company Dabur India Ltd Procter & Gamble Home Products Ltd Helene Curtis India Ltd, J K Reckitt Benckiser (India) Ltd Midas Care Pharmaceuticals Pvt Ltd SC Johnson Products Pvt Ltd Godrej Consumer Products Ltd Godrej Sara Lee Ltd Archies Greetings & Gifts Ltd Balsara Home Products Ltd Others Total Source:

2008

2009

2010

2011

2012

42.5 -

40.2 -

40.9 14.4

40.0 18.6

38.3 20.9

17.2

15.5

13.4

14.3

14.2

5.4

7.1

8.6

8.4

8.7

2.2

2.1

2.1

2.0

1.7

-

-

0.6

0.8

0.8

-

-

-

-

0.8

12.7 0.4

13.8 0.2

-

-

-

19.6 100.0

21.0 100.0

20.0 100.0

15.8 100.0

14.6 100.0

Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 5

Air Care Brand Shares 2009-2012

% retail value rsp Brand Odonil Ambi Pur Premium Air Wick Lovin Glade AER Haze Ambi Pur Fresh & Fragrant Odonil Others Total

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Company

2009

2010

2011

2012

Dabur India Ltd Procter & Gamble Home Products Ltd Helene Curtis India Ltd, J K Reckitt Benckiser (India) Ltd Midas Care Pharmaceuticals Pvt Ltd SC Johnson Products Pvt Ltd Godrej Consumer Products Ltd Reckitt Benckiser (India) Ltd Godrej Sara Lee Ltd Archies Greetings & Gifts Ltd Balsara Home Products Ltd

40.2 -

40.9 14.4

40.0 18.6

38.3 20.9

15.5

13.4

14.3

14.2

6.1

8.0

8.2

8.5

2.1

2.1

2.0

1.7

-

0.6

0.8

0.8

-

-

-

0.8

1.0

0.6

0.2

0.2

13.8 0.2

-

-

-

21.0 100.0

20.0 100.0

15.8 100.0

14.6 100.0

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AIR CARE IN INDIA

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Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 6

Forecast Sales of Air Care by Category: Value 2012-2017

Rs million

Candle Air Fresheners Car Air Fresheners Electric Air Fresheners Gel Air Fresheners Liquid Air Fresheners Spray/Aerosol Air Fresheners - Concentrated Spray/ Aerosol Air Fresheners - Standard Spray/ Aerosol Air Fresheners Other Air Care Air Care Source:

Table 7

2012

2013

2014

2015

2016

2017

443.8 692.2

529.8 756.2

626.0 826.2

726.6 895.3

828.3 962.3

931.9 1,023.5

-

-

-

-

-

-

692.2

756.2

826.2

895.3

962.3

1,023.5

521.7 1,657.7

534.7 1,820.8

546.5 1,998.8

554.6 2,176.5

561.3 2,351.9

566.7 2,522.1

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

Forecast Sales of Air Care by Category: % Value Growth 2012-2017

% constant value growth

Candle Air Fresheners Car Air Fresheners Electric Air Fresheners Gel Air Fresheners Liquid Air Fresheners Spray/Aerosol Air Fresheners - Concentrated Spray/Aerosol Air Fresheners - Standard Spray/Aerosol Air Fresheners Other Air Care Air Care Source:

2012-17 CAGR

2012/17 TOTAL

16.0 8.1 8.1 1.7 8.8

110.0 47.9 47.9 8.6 52.1

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

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