Ciao Bambini

August 17, 2005

consequences of the latest demographic developments in the European baby diaper market

For many Western European companies, the most important, or sometimes even the only, target group is babies and their parents. The markets for baby diapers and raw materials such as nonwovens, fluff, absorbent polymers, tapes and elastics are mainly linked to the birth rate in the industrialized nations. Purchasing power and market penetration are on a continuously high but stable level.

The increasing nonwovens production for use in baby diapers in Western Europe needs to be analyzed carefully as it is not a signal of significant future growth but rather due to new diaper designs. According to the nonwovens statistics report for 2000, published by EDANA, European Disposables and Nonwovens Association, Brussels, Belgium, the increase in deliveries of nonwovens to the baby diaper market results from recent structural developments (various types of layers and increased penetration of the textile backsheet).

The decline in birthrates, leading to a drop in population numbers, represents a major problem for Western Europe, particularly for Spain, Italy and Germany. These nations have had to deal with the most severe population crisis in their history.

Today the average number of children born to a woman—the so-called fertility rate—is down to about 1.45 in the 15 EU countries. This number is far below the replacement level of 2.1 children per woman, which is necessary to keep the population balanced.

For 2000, Spain set the record in regard to the lowest fertility rate in the European Union: only 1.15 babies were born to each woman. Spanish demographic calculations indicate that the population will decrease by 24% until the year 2050, representing a drop of 9.6 million people. Inhabitants in Spain last year totaled nearly 40 million.

Italy is expecting a decrease of 28% of its actual population by 2050.

With 56.6 million inhabitants in 2000, this will lead to a decrease of 16.14 million people. The Italian fertility rate is currently 1.18 children per woman.

Not only are the child-friendly Southern European countries affected. Germany is also fighting against the population crisis. With 82,264 million inhabitants, Germany is the country with the highest population in the European Union today. However, the German Nation is shrinking as well, and the latest demographic statistics predict that only 58 million people will live in Germany in 50 year’s time (migrations not included) will see a decrease of nearly 30%. Today the average number of babies born to a woman is 1.38 in Germany compared to an average fertility rate of 2.5 in the 1950s and 1960s.

Different Countries, Same Story
The reasons for these declining rates are generally similar across Europe. After years of high birth rates in the 1960s, the number of women of childbearing age is declining year by year. In addition, the average number of children born per woman has decreased continuously during the last thirty years. In order to overcome this critical situation, the affected nations need to change their general family politics significantly.

Old patriarchal traditions with inflexible family structures do not offer a lot of choices and freedom to modern women. Children or career is the question they must face. After years of education, many women decide to stay childless and pursue a business career instead, a choice that offers them economic independence and personal success.

Governments need to institute programs that offer flexible solutions for contemporary families, where one person may not necessarily be staying at home. One potential solution is balancing the responsibility of childcare. In addition, childcare offered throughout the country and organized by the government, together with financial support, could enhance the development of large families with working parents. The best examples of child-friendly family politics are the governments of The Netherlands, Ireland and especially France.

One of the youngest European populations exists in France. With 779,000 babies born in 2000, it has one of the highest birth rates in the European Union. Compared to 1999 this is an increase of 35,000 babies and represents a positive development for the third year in a row. The average fertility rate in France is 1.85 children per woman.

Having children for a woman does not mean the end of the career in France. Daycare facilities or state-managed nannies are looking after young babies. In addition, the French government offers an all-day schooling system with integrated homework support. In order to stabilize the European population, these successfully tested strategies, in combination with advanced ideas, should be adopted in all countries of the European Union as soon as possible.

In the meantime, due to the declining size of the market, competition in the European baby care industry is becoming increasingly fierce.

The long held hopes of replacing declining growth in Western Europe with new market potential in Russia, the nations of the former Soviet Union and Eastern Europe were not realized. Poland, the Czech Republic and Hungary are the only exceptions. To keep sales figures on a stable level in the future, companies are increasing their advertising activities and special offers such as “Two For The Price Of One.” Small, financially weaker companies will face severe problems and may in the end even have to close their doors.

Thus the number of players in the European baby care industry is decreasing because of mergers or takeovers, creating a highly concentrated market. Today the baby diaper industry in Europe is dominated by Procter & Gamble, Cincinnati, OH, Kimberly-Clark, Dallas, TX, SCA, Stockholm, Sweden, Hartmann, Heidenheim, Germany and Ontex, Buggenhout, Belgium.

The demographic dynamic leading to a drop in baby diaper usage creates the urge to look for new target groups in the personal care industry. Baby diapers as the focal point of the industry is a trend that has reached its maximum potential in Western Europe. Further growth can only be generated from other, totally new market segments that must now be developed.

Editor’s Note:
Sabine Martini’s column, Ciao Bambini, will begin appearing in Nonwovens Industry regularly in 2002.

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