From a statistical point of view, each EU citizen from infant to great-grandfather bought 1,45 kg of candles. The fact that the candle manufacturers were able to increase the domestic production again and nine out of ten candles were produced in Europe is particularly good news. Manufacturers expect that this year´s consumption will stay at this high level. The demand for LED imitations on the other hand seems to have passed its peak and sales have stagnated again. These products are primarily used where candles would be too much of a risk anyway because of their open flames, e.g. at kindergarten or retirement homes.
But despite this positive development, European candle manufacturers face enormous challenges. The price pressure, that had been high before, has become even higher and drove some manufacturers into insolvency. Other well-established manufacturers had to stop their cost-intensive production in Western Europe. If profitability does not improve significantly in the next years – and unfortunately there are no indications for this – additional shutdowns especially in Western Europe and consolidation in the sector will be unavoidable. The development in the following areas will be of key importance here:
Competition with low-priced imports
After low-priced candle imports from China had brought the European candle industry to the brink of collapse, antidumping duties were protecting it for a period of almost seven years. The manufacturers used this breather to modernise their production facilities and increase their efficiency as far as possible. So far, a sharp increase of cheap Chinese candle imports has not been observed since the antidumping duties were stopped two years ago, but imports from other low-cost countries have entered the European market instead. These products typically show inferior quality compared to domestically produced candles and there are frequent doubts that they comply with legal provisions. The European manufacturers are concerned, however, that disappointed consumers, who had the bad luck to buy such a poor product, will stop using candles entirely instead of using high-quality candles from domestic producers.
Fluctuating base material supply and prices
Paraffin is still the most widely used base material for candle production. But in the past years, large parts of the production capacities in Europe were shut down and so the manufacturers have no other choice than importing paraffin to cover their demand. The consequences are partly extreme price surges and an uncertain supply situation – and the candle manufacturers require a price level of their base materials that is as stable as possible of course.
Fortunately, the paraffin prices have been rather stable in the running year and supply has been sufficient. On the other hand, the prices of fats have remained at a very high level and those of stearin have jumped up since the beginning of this year. Candle manufacturers explicitly welcome that more and more customers require certified sustainable products, but the efforts for the necessary certification are significant and not all customers are willing to pay the substantial extra costs for the certified base materials.
Increasingly strict legal requirements
Candle manufacturers take compliance with the increasingly stricter legal requirements very seriously and keep careful records, but the efforts are tremendous. In addition, there are separate national approaches of member states intending to modify the EU wide requirements to a greater or lesser extent, causing additional effort. The European Commission could easily halt this rank growth that is particularly bothersome for companies that are active all over Europe by eventually publishing the safety requirements they developed together with the member states and the candle industry more than two years ago already. This would make the legal requirements even stricter, but the uniform interpretation of product safety all over Europe and consistent continuation of standardisation are two of the candle manufacturers´ most important objectives.
Increasing customer demands
The consolidation of retailers in the past years has given the big retailer groups even more power. One result is an extreme price pressure that gets even higher because of the continuous shift of candle sales from small retailers and specialist shops to price-conscious discounters. Moreover, orders are placed later and later each year and the response time gets extremely short as a result. The necessary flexibility can only be realised by foresighted long-term storage, causing extra costs and risks for the manufacturers and tying up more and more important working capital.
At the same time, customers are demanding more and partly very different commitments and documentation, e.g. for supply chain management or social responsibility to name only two.
The sales area for candles in the shops is getting smaller and smaller, and so customers have less choice in the individual shop. The candle manufacturers´ product ranges are getting broader and broader at the same time with lots of different shapes, colours and fragrances because the retailers want to differentiate from their competitors and offer different assortments. But it is still the classics that are mostly sold, such as white tea lights, pillar candles or jar candles for example.
If consumers are looking for large and extravagant candles, which can be used as the central eye-catcher of flower arrangements for example, they can often find them at home decor chains, floristics shops and garden centres. Online trading of candles contributes to creative diversity as well.
Apart from the classics, there are strong sales of tea lights and maxi lights with transparent plastic cups that allow a clear view of the flame. Other trends are solid-coloured pillar candles with rustic surface texture and filled jars in all shapes and colours.
Scented candles have continued to grow in popularity, but there are strong regional variations. There is a trend towards candles with a high fragrance load and extravagant scents, preferably in a decorative jar.
Consumers determine quality
In spite of price pressure and future challenges, our members are anxious to continue supplying best quality candles because candle consumption will only increase sustainably if consumers are satisfied with the product. And consumers are the ones with the greatest power when it comes to deciding if high quality is supposed to win out in the long term, as they have proven for many other products before. The price should not always be the key criterion, especially since candles are inexpensive products to begin with. Consumers should pay more attention to an attractive appearance and good workmanship. If a candle nevertheless falls short of the expectations when it is lit, there will be sufficient alternatives on the market that will convince entirely.
If consumers want to make sure to buy high-quality candles before lighting them, they should look out for the RAL Quality Mark for Candles. The award stands for premium quality of all base materials as well as an impeccable burning behaviour of the candles. It increasingly attracts retailers´and especially consumers´ attention also beyond Central Europe in the meantime.