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Category Insights: Diapers and More

Disposable Diapers

The private label disposable diapers category shows growth as quality improves and shoppers continue to seek out diaper deals.

August 14, 2013
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Which diaper brands parents elect to buy might be more up to their babies, surmised after the trial and error of seeking out which brands work for each child.

Eye on the National Brands

To compete with private label, premium brands have launched diapers with brightly colored print designs that usually are available only for a limited time. For example, Huggies brand Little Swimmers feature Disney and Disney/Pixar characters and Huggies Little Movers Jeans put children in diapers that look like denim, while its Santa Diapers provided a Christmas splurge.

 

But the recession brought on parents’ search for affordable options first, which has benefited private label brands in the subsequent years since.

Of course, as younger couples hold back on having children, probably because of continued economic woes, the diaper market will need more babies to continue growth.

The private label disposable diapers category went up almost 4 percent in sales to more than $778 million with a 22 percent share of the category, while private label disposable training pants dipped 3 percent, according to IRI data for 2012.

The recession and subsequent recovery years have had a substantial impact on the disposable baby product market, especially in how parents shop for products, according to Mintel’s “Disposable Baby Products - US - April 2013” report. The report said parents are aware of product costs and are careful to scrutinize their spending, particularly on products like disposable diapers which are used very frequently day-to-day.

According to a Consumer Reports article, parents can expect to spend around $2,500 or more on diapers by the time a baby is potty-trained.

“Families have switched to private label disposable baby products (especially diapers), and they are shopping at retailers that offer discounts and low prices,” it said.

Although the Mintel report makes the following suggestions for brands to win back sales from private label, it stands to reason these same innovations could be made by the right private label diaper supplier to forge ahead of brands.

“Brands that develop innovations that make changing easier, such as only being able to change a diaper with one hand, may be able to better differentiate

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Category Insights disposable diapers

themselves from private label,” the report said. “Brands could even develop diapers that are better designed to work within certain temperature states or seasons, such as a summer diaper that is thinner and utilizes materials to keep a baby cool, or a winter diaper built to keep babies warmer. Developing innovative, more enhanced diaper designs could be helpful in brands better differentiating themselves from private label.”

According to the report, diapers and training pants make up the largest segment in the disposable baby product market, encompassing 71 percent of the market share, meaning its performance dictates how the overall market performs. The segment’s size can be attributed to diapers being expensive and their high frequency of use among parents with children three and under.

Growth in private label diaper sales has had a significant impact on the segment, the report continues, as a number of consumers have switched to private label, seeing little difference between private label and premium brand products. 

Diaper buyers with children 3 and under most commonly report that cost is a main frustration, the report said. Challenging economic circumstances have caused consumers to tighten their household budgets and to look for ways to save money on disposable baby products. The diapers and training pants segment has struggled in the past few years because private label products have become more competitive, boasting quality improvements at a lower price.

Of course the most significant impact on sales of private label or branded products will come from birth rates. Simply put, less babies means less need for diapers and the economic situation has many would-be shoppers putting off having children.

According to statistics from the Centers for Disease Control and Prevention, the U.S. fertility rate declined during 2010, to 64.1 percent. Preliminary/provisional data indicates that the fertility rate is set to reflect further declines in 2011 to 63.2 percent.

Rebranding Baby

Walgreens’ “Well Experience” stores integrate a new approach to the pharmacy, as well as the rebranding of former Walgreens brand healthcare products under the new line Well at Walgreens. However, as baby purchases are inherently personal, the drugstore retailer decided that its baby line would need to be differentiated when it came to the rebranding process.

“We just launched a new brand called Well Beginnings, a baby brand,” said Maurice “Moe” Alkemade, group vice president of retail brands and global sourcing for Walgreens. “We’ve had Walgreens brand in that area, but we felt that we could do a much better job by creating a new brand.”

Well Beginnings – the name for the new baby care line, which includes diapers – doesn’t depart too far from the Well at Walgreens switch over, while still managing to set it apart.

“We really wanted to differentiate it, because it’s a baby category – it’s more emotional, more connected to mothers, more about catering to babies,” he said.

The move from Walgreens follows CVS/pharmacy’s revamp of its CVS brand of baby diapers in 2012.

The redesigned orange packaging was improved to be more bright and playful, according to CVS, and carries a blue “new & improved” callout across all sizes.

 Improvements included enhanced leakage protection and a smart-fit size indicator on the diaper, which lets shoppers know when their baby is ready to move up a size. The diapers also are perfume and latex free, and offer a new contoured fit and softer, stretchable tabs.  

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