As grownups tap into creativity with paint nights and coloring books for adults, a few industries are benefiting.
Paint nights, coloring books, back-to-school supplies, and the handmade market are supporting office supply companies as more adults are embracing crafting and buying art supplies, according to the global information company The NPD Group. This is also carving out new opportunities for the office supplies industry, they said.
The group said coloring and art supplies have become more than a $1.1 billion market, with in-store and online sales growing over $75 million combined in 2015. The growth is driven by art and craft paper, paint, and painting supplies.
“The handmade movement will continue to gain momentum, especially as more consumers place added focus on health and wellness, creative outlets, and a do-it-yourself approach to projects,” said Leen Nsouli, office supplies industry analyst for NPD. “Social crafting networks will continue to expand, providing consumers the opportunity to simultaneously socialize and craft.”
Coloring Is Not Just for Kids
Step inside any office supply store and displays of paints and coloring books are often featured prominently, right alongside traditional office needs like ink cartridges and staplers. A recent CNN story reported that some of Amazon’s (AMZN) bestselling books are adult coloring books. The story said part of the interest in these books is driven by adults who want to unplug from being online and find a new way to relax.
Relaxation is also behind the rise of “paint nights.” These experiences started popping up around the U.S. several years ago when bars and restaurants started hosting informal painting sessions. During these nights, an instructor typically walks amateur artists through creating a canvas-based painting. Students often have a paintbrush in one hand and glass of beer or wine in the other. Once socializing and painting are completed, students take their masterpieces home.
Pretty as a Picture?
Although the handmade market and crafting surge is boosting sales of supplies like paints, pens, pencils, crayons, paper, and coloring books, investors might want to stick with coloring in the lines, so to speak.
Although major office supply companies like Staples (SPLS) and Office Depot (ODP) are stocking these products and may be seeing a pickup in sales in this category, it still represents only a fraction of their total sales. Like most physical stores, these companies are experiencing increasing competition from online shopping, and their shares took a hit earlier this year after a hoped-for merger fell through. Although Bank of America has a buy rating on Staples, saying it’s underperforming, the other few analysts that watch the stock have it rated as a neutral or hold. Analysts also have a mixed view of shares of Office Depot.
ACCO Brands (ACCO), which makes several types of business and crafting supplies, and The Michaels Companies (MIK), a craft supply store, may have more vibrant outlooks based on the surge in paint nights and adult coloring books. Zacks Research lists ACCO as a buy, and MIK as a strong buy.
ACCO’s products are sold both in stores and online, and unlike other brick-and-mortar retailers, Michaels is generally shielded from online competition, analysts said. So if you’re looking to add some color to your portfolio and find a way to unwind after a long day at work, you might consider looking deeper into the trends driving adults to create art.
A Colorful Palette of Stocks Awaits
Want to learn more about stocks potentially benefiting from adult creativity? Screener tools can help you find and put stocks to the test.