Diapers & Training Pants: Time for a Change

April 24, 2008
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The diapers and training pants category is flailing, but an understanding of today’s consumer - and a more unified approach to innovation - will keep the category on track toward a strong future.

Subject to the fickle preferences - and even the fears - of parents and caregivers, products in the diapers and training pants category can succeed or fail on a whim, making consistent growth in the category difficult. This sort of instability has led to the stagnant growth taking place in the diapers and training pants category.

According to Chicago-based Information Resources Inc. (IRI), sales for the total disposable diapers category rose only 0.1 percent in the 52 weeks ending Oct. 7, 2007. However, dollar sales for private label disposable diapers didn’t fair as well. The subcategory instead experienced a 3.1 percent decline in the same time period.

So why the downturn in the diaper segment? Kids still are wearing diapers, right?

Actually, the decline in diaper and training pants sales has less do with kids than with the adults who care for them.

According to an October 2007 disposable baby products report conducted by Mintel, New York, households today are smaller than they’ve been in several generations. The report provides evidence that more single persons and couples without children make up households today, which ultimately has resulted in a smaller market for baby products of all types. What’s more, birth rates dropped dramatically from 1990 to 2005, with the number of births per 1,000 falling from 16.7 to 14 during that time, Mintel reports.

And not only are fewer consumers buying disposable diaper products, but the outlets in which they typically purchase such items have changed, which is causing some displacement in the marketplace.

Mintel reports that dollar sales of disposable baby products through supercenters fell by more than 32 percent from 2002 to 2007, as mass merchandisers’ low prices, large package sizes and larger product variety continue to draw consumers away from traditional supermarkets.

The question traditional retailers face is how to pick up the category. It’s clear that the diaper and training pants segments need a change, but is there a single, all-encompassing solution to grow the category as a whole? And where does private label fit into the equation?

Innovation = Growth

In most instances, change is regarded with skepticism. But in the diapers and training pants subcategories, change is essential.

With many products approaching saturation point and a stagnant base of new end-users because of low birth rates, innovation is extremely important to the disposable baby products market, Mintel reports. But in the diapers and training pants category, innovation has to result in more than just the strengthening of sticky strips or the addition of a cartoon figure on the packaging. Product developers also must stay current with changing consumer demands.

One of the most noticeable changes taking place in the diapers and training pants category is the increasing average age of pregnant women. According to Mintel, more women are having children later in life. This delay in childbirth has created a wealthier class of new mothers, who have more money to spend on their babies. And this increase in disposable income - and the prevalence of more affluent families - has led to more purchases of premium-tier disposable baby products, particularly durable baby products, Mintel says.

But how does private label fit into the equation? If families have more disposable income, are they still going to purchase the store brand?

“The premium product segment is the biggest single market dynamic impacting the private label industry,” says Chris Ferdock, director of marketing for Associated Hygienic Products, Duluth, Ga. “Historically, the premium segment has always been difficult for a private label baby diaper to compete against the national brands. However, with recent advancement in design and material development, [private label] companies have found success in this product segment.”

Ferdock notes that, in general, mothers search for the performance/value equation when purchasing baby diaper and training pant products. And those premium-tier products that meet this equation are the ones that are the best sellers or most popular.

“In baby diapers, if you can supply mothers with a product that has very few leaks, fits their baby well with noticeable stretch - [and] provide these wants at a perceived value ... and you should be able to find success,” he adds.

The New Diaper Consumer

Consumers today also are concerned about how baby products are made, where they are made and how the product’s disposal will impact the environment.

According to Mintel, opportunities exist for innovation through increases in biodegradable and eco-friendly products. What’s more, higher-income consumers are more likely to pay more for natural ingredients in products. Moreover, medicinal products that help treat allergies - which are becoming more widespread among babies, toddlers and younger/older children - are likely to become more in demand, Mintel reports.

The concern for baby’s health with regard to product content actually has enabled the decline in sales within the diapers and training pants category. Mintel makes note that the disposable diapers segment has seen a 0.6 percent decrease in market share, as wipes and baby cleansing and care products have increased their shares from 2005 to 2007. The subcategories that saw the biggest gains in sales include baby lotions, ointments and creams, as well as baby wash and soap. Products such as baby powders and baby oil declined in sales as health warnings about infants inhaling such products became more widespread.

Also aiding in the decline of disposable diapers and training pants is the growing popularity of cloth diapers. Often viewed as being more environmentally friendly than disposable diapers, cloth diapers also are winning new, more affluent consumers by way of their perceived health benefits over disposables.

According to an article published in Mothering Magazine, dioxin, which in various forms has been shown to cause cancer, birth defects, liver damage and skin diseases, is a by-product of the paper-bleaching process used in manufacturing disposable diapers, and trace quantities may exist in the diapers themselves.

Merchandising tactics for diapers and training pants also are changing. New emphasis is being placed on merchandising products to specific demographics such as the Hispanic, Asian and African American consumer populations.

Mintel says that Hispanics and blacks will offer the most opportunity for growth as the number of women of childbearing age will increase by 9.9 percent for Hispanics and 5.4 percent for blacks from 2007 through 2012. Meanwhile, the number of non-Hispanics and white women in the same age bracket will grow by less than 1 percent during the same time period.

Mintel also stresses that although Asian-American consumers represent a smaller proportion of the population than other racial/ethnic groups, they are worth pursuing because they tend to have higher levels of income and are more willing to pay for quality.

Growing Private Label

Much of the change taking place in the diapers and training pants category concerns the industry as a whole. But what about private label specifically? What can be done to spur sales of store brand products in the baby care aisle?

According to Mintel, private label is showing some strong signs of future growth. For example, store brand sales account for an estimated 16 percent of market sales in 2007, with private label baby wipes reaching nearly 28 percent of sales in the category, excluding Wal-Mart.

Mintel also reports that some retailers have expanded their private label lines into multiple price ranges, whereas private label once was viewed solely as a value brand. Examples of this shift include Kroger Value and Kroger Comfort brands.

“It is critical for private label manufacturers to remain competitive by constantly re-engineering their product design and developing their own proprietary designs and materials for the market,” Ferdock says. “Any assurances that you can communicate to mothers regarding solid leakage protection at a savings will always pay dividends for private label diapers and training pants.”

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