AIR CARE IN THE PHILIPPINES

Euromonitor International
August 2012
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LIST OF CONTENTS AND TABLES

Headlines ..................................................................................................................................... 1
Trends .......................................................................................................................................... 1
Competitive Landscape ................................................................................................................ 2
Prospects ..................................................................................................................................... 2
Category Data .............................................................................................................................. 3
Table 1 Sales of Air Care by Category: Value 2006-2011 ......................................... 3
Table 2 Sales of Air Care by Category: % Value Growth 2006-2011 ........................ 3
Table 3 Battery Operated vs Plug-in Electric Air Fresheners: % Value
Breakdown 2008-2011 ................................................................................. 4
Table 4 Air Care Fragrances Rankings by Value 2006-2011 .................................... 4
Table 5 Air Care Company Shares 2007-2011 ......................................................... 4
Table 6 Air Care Brand Shares 2008-2011 ............................................................... 5
Table 7 Forecast Sales of Air Care by Category: Value 2011-2016 .......................... 5
Table 8 Forecast Sales of Air Care by Category: % Value Growth 2011-2016 ......... 5

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AIR CARE IN THE PHILIPPINES

HEADLINES
 Air care grows 8% in current value terms to reach Ps1.4 billion in 2011
 Stable economic growth and desire for fragrant atmosphere maintain positive air care growth
 Average unit price increases by 6% in 2011
 SC Johnson & Son (Philippines) dominates with 67% value share
 Air care is expected to post constant value CAGR of 4% over the forecast period for sales to
reach Ps1.7 billion in 2016

TRENDS
 In 2011, there were reports published in the mass media discussing the negative health
impact of air care products. However, this was not enough to impact air care consumption
negatively as the issue was countered by manufacturers’ press releases and advertisements
highlighting the benefits of air care products. In addition, the desire for a fragrant environment
continued to sustain interest in the products.
 Air care posted current value growth of 8% in 2011. This was marginally higher than the
growth in 2010 due to higher average unit price this year as a result of successive oil price
increases. The 2011 value growth was the highest since 2001.
 Car air fresheners continued to post the highest current value growth of 14% in 2011. As
before, Filipinos remained keen to maintain a refreshing environment in the car as traffic
conditions, particularly in Metro Manila, meant that most Filipinos stayed in their vehicles for
at least a few hours a day.
 The average unit price of air care products increased by 6% in 2011 which was due to higher
shipping and operational costs as a result of successive oil price increases during the political
turbulence in the Middle East in 2011. Concentrated spray/aerosol air fresheners was the
most expensive while car air fresheners and electric air fresheners were the most affordable.
 Electric air fresheners had the slowest volume growth, declining by -8% in volume and -5% in
value. This was because the products were advertised less often and there was low
awareness of the products. Electric air fresheners products were also rarely seen in key
distribution channels such as supermarkets and hypermarkets. 86% of electric air fresheners
are plug in while battery operated electric air fresheners had 14% value share. However,
battery electric fresheners grew in share against plug in air fresheners due to the convenience
trend.
 The majority of air care volume sold in 2011 was spray/aerosol air fresheners, followed by gel
air fresheners and electric air fresheners. Liquid and candle air fresheners were not visible.
According to trade sources, SC Johnson & Son stopped distribution of its Glade candle air
freshener in 2009 while Procter & Gamble Philippines Ambi Pur liquid and candle air
fresheners were unavailable in the country. Spray/aerosol air fresheners was the most widely-
used as the products were heavily advertised to consumers compared to the rest of air care.
In 2011, the most appreciated scent was lemon/citron, followed by floral then
ocean/marine/sea/aqua, fruity and forest/wood/woody/rainforest.

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COMPETITIVE LANDSCAPE
 SC Johnson & Son Inc (Philippines) continued to dominate air care in 2011 with 67% value
share. SC Johnson & Son benefits from having an established brand, Glade, and being one of
the pioneer air care brand manufacturers, having a good brand image and wide air care
products portfolio. The Glade brand is present in car air freshener, electric air fresheners, gel
air fresheners, spray/aerosol air fresheners and other air care. The company’s other car air
freshener brand, Bayfresh, held a significant share of 8%. Its continuous investment in
multimedia advertisements also benefited value share.
 Procter & Gamble Philippines Inc, the maker of Ambi Pur air fresheners, had the fastest share
growth among the brand manufacturers in 2011, thanks to its quality products, wide product
portfolio, reasonable prices and good distribution channels. The company also benefits from
its strategy of continuous innovation and upgrading of its operations and communication
technologies.
 Multinationals continued to dominate air fresheners in the Philippines with 95% total value
share compared to only 5% by local brands. The international brands benefit from being early
entrants and from having positive brand perception. The brands were typically positioned as
high class and good quality. The premium brands performed well compared to standard and
economy brands since the latter were more popular and affordable. The premium brands
compete for consumers in terms quality, brand image and strategic distribution channels.
Private label, particularly SM Bonus, also increased in value share due to its price
competitiveness and increasing number of SM Supermarket branches.
 The new product launches in 2011 were Reckitt Benckiser Philippines’ Air Wick 100% natural
propellant spray which is propelled only by fresh air and Lysol Neutra Air Fabric Mist which
kills germs and eliminates odours on soft surfaces. Both contributed to the company’s value
share growth. The key advertising campaigns are “Brighten your home with Air Wick” by
Reckitt Benckiser, “Air Care Innovator, Creating Innovative Air Care Solutions for a fresh and
pleasant atmosphere in your home” by SC Johnson & Son and “Special fragrances to renew
the air and make you feel right at home” for the Ambi Pur brand by Procter & Gamble
Philippines Inc. These advertising campaigns were rarely seen or heard in the media and
therefore had lesser impact on value growth.

PROSPECTS
 Air care value sales is expected to grow by constant value CAGR of 4% over the forecast
period, reaching Ps1.7 billion in 2016. New scents are expected to be introduced in the
forecast period and air care manufacturers may include health and environment benefits of
their air care products on the labels and through advertisements to improve the image. There
will also be product innovation which will introduce air care products that reduce health or
environment-related hazards.
 The potential forecast threats are the expected increases in the number of brands and key
players, which will make competition stiffer. The stagnant disposable income in the short term
and the likely slowdown in employment growth will affect consumer spending and hence air
care growth as the products are considered an extra cost and a luxury rather than a
necessity. Studies that expose the health hazards of the products and dissemination of such
information may also be a threat to growth.
 Car air fresheners is expected to have the fastest growth in the forecast period due to the
sustained disposable income of upper middle income and high income segments despite the
expected short-term economic slowdown. Electric air fresheners will decline in volume and

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value over the forecast period because the products are more expensive, less popular and
less known by consumers.
 The average unit price of air care products is expected to increase slowly until 2013 as
manufacturers and retailers will not increase prices to stimulate demand. Instead, they will
offer more frequent discounts and buy-one-get-one-free offers. The average unit price of air
care will increase more from 2014-2016 when consumer spending will improve significantly.
 As the new product developments appeal to sanitation and health, they will have modest
gains despite the difficult economic conditions until 2013. Competing manufacturers may also
introduce similar products to counter the potential share decline that will result from the
introduction of new products.
 Manufacturers are expected to engage in various marketing activities such as multimedia
advertisements, retailer seminars, in-store promotions and discounts, corporate social
responsibility activities, broadcasting programme sponsorships, advertisements through social
networking sites, press briefings and conferences, research and development and cross
industry partnerships.

CATEGORY DATA
Table 1 Sales of Air Care by Category: Value 2006-2011

Ps million
2006 2007 2008 2009 2010 2011

Candle Air Fresheners - - - - - -

Car Air Fresheners 122.7 130.6 148.3 166.0 190.1 217.4
Electric Air Fresheners 37.7 38.4 27.7 24.1 22.9 21.8
Gel Air Fresheners 270.1 285.0 305.0 323.2 347.5 377.0
Liquid Air Fresheners - - - - - -
Spray/Aerosol Air 312.2 334.5 360.8 382.2 412.4 445.8
Fresheners
- Concentrated Spray/ 9.1 13.2 13.8 14.4 15.1 15.9
Aerosol Air Fresheners
- Standard Spray/ 303.1 321.3 347.0 367.9 397.3 429.9
Aerosol Air Fresheners
Other Air Care 277.6 290.1 307.5 322.9 340.7 359.8
Air Care 1,020.4 1,078.7 1,149.3 1,218.5 1,313.5 1,421.8
Source: 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 2006-2011

% current value growth

2010/11 2006-11 CAGR 2006/11 Total

Candle Air Fresheners - - -

Car Air Fresheners 14.4 12.1 77.3
Electric Air Fresheners -4.5 -10.3 -42.1
Gel Air Fresheners 8.5 6.9 39.6
Liquid Air Fresheners - - -
Spray/Aerosol Air Fresheners 8.1 7.4 42.8
- Concentrated Spray/Aerosol Air 5.5 11.8 74.7
Fresheners
- Standard Spray/Aerosol Air Fresheners 8.2 7.2 41.8

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Other Air Care 5.6 5.3 29.6

Air Care 8.2 6.9 39.3
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 3 Battery Operated vs Plug-in Electric Air Fresheners: % Value Breakdown

2008-2011

% retail value rsp

2008 2009 2010

Battery Operated 10.0 12.0 13.5

Plug in 90.0 88.0 86.5
Total 100.0 100.0 100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 4 Air Care Fragrances Rankings by Value 2006-2011

ranking
2006 2007 2008 2009 2010 2011

Lemon/Citron 1.0 1.0 1.0 1.0 1.0 1.0

Floral 4.0 3.0 3.0 4.0 3.0 2.0
Ocean/Marine/Sea/ 5.0 4.0 2.0 2.0 2.0 3.0
Aquamarine
Fruity 2.0 2.0 4.0 3.0 4.0 4.0
Forest/Wood/Woody/ 3.0 5.0 5.0 5.0 5.0 5.0
Rainforest
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 5 Air Care Company Shares 2007-2011

% retail value rsp

Company 2007 2008 2009 2010 2011

SC Johnson & Son Inc 75.8 71.9 69.0 67.2 66.7

(Philippines)
Philusa Corp 12.1 13.1 13.2 13.0 12.8
Procter & Gamble - - - 11.5 12.2
Philippines Inc
Reckitt Benckiser 2.4 2.9 2.9 3.0 3.1
(Philippines) Inc
Shaldan Philippines Inc 1.5 1.5 1.5 1.5 1.5
SM Retails Inc 0.4 0.3 0.3 0.2 0.3
California Scents 0.1 0.1 0.1 0.1 0.1
Philippines
Everwing Enterprises 0.1 0.1 0.1 0.1 0.1
Sara Lee Philippines Inc 4.1 6.6 9.4 - -
Bayer Philippines Inc - - - - -
Car-Freshner Corp - - - - -
Others 3.7 3.6 3.5 3.4 3.3
Total 100.0 100.0 100.0 100.0 100.0

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

Table 6 Air Care Brand Shares 2008-2011

% retail value rsp

Brand Company 2008 2009 2010 2011

Glade SC Johnson & Son Inc 59.4 56.8 55.1 54.7

(Philippines)
Albatross Philusa Corp 13.1 13.2 13.0 12.8
Ambi Pur Procter & Gamble - - 11.5 12.2
Philippines Inc
Bayfresh SC Johnson & Son Inc 12.5 12.3 12.1 12.0
(Philippines)
Lysol Reckitt Benckiser 2.9 2.9 3.0 3.1
(Philippines) Inc
Shaldan Shaldan Philippines Inc 1.5 1.5 1.5 1.5
SM Bonus SM Retails Inc 0.3 0.3 0.2 0.3
California Scents California Scents 0.1 0.1 0.1 0.1
Philippines
Koala Everwing Enterprises 0.1 0.1 0.1 0.1
Ambi Pur Sara Lee Philippines Inc 3.0 5.5 - -
Ambi-Pur Sara Lee Philippines Inc 3.6 3.9 - -
Bayfresh Bayer Philippines Inc - - - -
Forest Car-Freshner Corp - - - -
Others 3.6 3.5 3.4 3.3
Total 100.0 100.0 100.0 100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 7 Forecast Sales of Air Care by Category: Value 2011-2016

Ps million
2011 2012 2013 2014 2015 2016

Candle Air Fresheners - - - - - -

Car Air Fresheners 217.4 227.0 236.7 252.1 272.5 296.0
Electric Air Fresheners 21.8 20.2 19.1 18.3 17.7 17.2
Gel Air Fresheners 377.0 394.0 409.8 430.2 456.1 488.0
Liquid Air Fresheners - - - - - -
Spray/Aerosol Air 445.8 452.7 457.6 467.1 481.2 500.3
Fresheners
- Concentrated Spray/ 15.9 16.4 16.9 17.6 18.2 18.8
Aerosol Air Fresheners
- Standard Spray/ 429.9 436.3 440.7 449.5 463.0 481.5
Aerosol Air Fresheners
Other Air Care 359.8 370.5 379.8 393.1 410.8 435.4
Air Care 1,421.8 1,464.4 1,503.0 1,560.8 1,638.3 1,736.9
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

Table 8 Forecast Sales of Air Care by Category: % Value Growth 2011-2016

% constant value growth

2011-16 CAGR 2011/16 TOTAL

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Candle Air Fresheners - -

Car Air Fresheners 6.4 36.1
Electric Air Fresheners -4.7 -21.3
Gel Air Fresheners 5.3 29.4
Liquid Air Fresheners - -
Spray/Aerosol Air Fresheners 2.3 12.2
- Concentrated Spray/Aerosol Air Fresheners 3.4 18.4
- Standard Spray/Aerosol Air Fresheners 2.3 12.0
Other Air Care 3.9 21.0
Air Care 4.1 22.2
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

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