Making Moves In The AI Market

By Karen McIntyre, Editor | March 12, 2007

strong growth prospects have led to M&A activity in North America

The population is graying. That is a fact, at least in developed regions such as North America and Western Europe. And, as these developed regions are the ones facing a slowdown in growth in many disposable segments—namely disposable baby diapers—a larger audience for adult incontinence products has been a boon to the nonwovens industry during the past couple of years.
According to INDA estimates, adult incontinence products sold in the U.S. and Canada totaled about 2.6 billion units last year, equivalent to just more than $1 billion at retail, with growth prospects estimated at 5-6% per year until 2011. This represents just half of the overall AI market. The institutional arm of the segment is just as big as consumer and includes sales to hospitals, assisted living and nursing homes.
“Population demographics indicate there will be considerable growth for adult incontinence products,” said Ian Butler, director of market research and statistics for INDA. “In 2000, people older than 85 years numbered 4.7 million in North America. This number will more than double to 11 million by 2030 due to the aging baby boomers and a longer-living elderly population living longer because of advancements in health care and nutrition.”
The larger consumer base for adult incontinence, combined with this growth, has created opportunities for new products in the segment that respond to three major requirements—comfort, discretion and ease of use. As sufferers of incontinence seek more active lifestyles, they are demanding products that can work with them as they go about their daily lives.
“We are making modifications to our products all of the time,” said Dieter Feustel, marketing director of incontinence products for Paul Hartmann, a leading European supplier of adult incontinence products. “Whether we are making them more breathable with nonwovens or breathable films or if we are adding more stretch to the product, end users want something that seems more underwear-like and not an adult diaper and many of our product modifications are in tune with that goal.”
Hartmann’s MoliMed Pants Active are an example of an incontinence product with underwear characteristics suitable for active adults. This product combines discretion with improved efficacy, according to Mr. Feustel.
Also targeting light incontinence sufferers is Kimberly-Clark’s Poise Panty, which is made of a cotton-soft material with all-over stretch and a gently scalloped, full waistband. Several thin layers of absorbent materials help keep the wearer dry and protected as they neutralize odors. The materials are effective without adding unnecessary bulk. The panty is specially shaped for a woman body with gentle leg elastics that help hold absorbent material effectively in place.

M&A Is Strong

New products are not the only factor shaping the adult incontinence market. During the past couple of weeks alone, there have been a number of recent M&A announcements in the segment, signifying that there are big things in store for this market.
In acquisition news, KPS Partners has purchased PaperPak Products, the maker of Attends adult incontinence products, through a newly formed affiliate Attends Healthcare, Inc. Attends, which was acquired from Procter & Gamble seven years ago, targets the institutional adult incontinence segment. “The acquisition will improve our equity position because the new owners are excited about continuing investment in the business, said Michael Fagan, who will continue to serve as CEO under the new ownership. Recent investments at Paperpak include the conversion of its high speed adult brief lines to run a nonwoven breathable backsheet supporting the company’s entry into pull-on underwear segments.
Also last month adult incontinence maker Whitestone announced it was purchasing fellow AI supplier Humanicare. The combined company will provide adult incontinence products and services and will distribute several brands including Dignity, Compose, Ultrashield and Dispoeze. James Better, current Whitestone president and CEO, will be at the helm of the joined companies. “Humanicare is very complementary to Whitestone,” he said. “Our strength is in the long-term care market and theirs is in the home care part. From a product perspective, we are big in the more severe problem areas where they are much stronger in lighter end of incontince.”
Mr. Better said there are many differences and similarities between the institutional and consumer
sides of adult incontinence. “I think they are fairly similar in many respects in terms of how they use products and so forth. On average, I would presume there is a lower acuity level in home care. People who are more ambulatory skew to the lighter end of the incontinence scale. Second, in home care the end user, or the incontinence suffere,r is involved in the decision making where in a facility there is not that connection between the patient and the product.”
Amidst this activity, Procter & Gamble, which sold the bulk of its AI business seven years ago in a deal with Paperpak, has announced its intent to fully exit the market through the sale of its Japanese adult diaper business. P&G said it was looking to unload the Attento adult diaper brand, despite the market’s strong growth prospects, because it does not fit into its strategy of focusing on products that it can expand on a global scale. The Attento brand was launched throughout Japan in 1982 and is sold mainly in Japan with some distribution in Hong Kong.

The Home Stretch

As the adult incontinence user continues to demand improved discretion, better fit and ease of use,  stretchability has come to play a larger role in this market as has been the case in most disposable segments.
“Stretch and elasticity is a feature in the HAP market, including AI products, that is being discussed throughout the product supply chain,” said George Racine of ExxonMobil Chemical. The company’s recent development of Vistamaxx specialty elastomers has made it possible for converters to produce truly elastic nonwoven fabrics on existing nonwoven assets.
“Stretch is definitely becoming more important,” said Hartmann’s Mr. Feustel.  “It’s interesting because we have a general tendency of wanting normality in adult incontinence products, especially among the end users who want something that seems more like underwear-like and not like adult incontinence s. Stretch adds more normality to the product, but there is still the question if the market will pay for that.”
Films maker Pliant Corporation is also focusing on stretch with the launch of its FlexSure elastic film and FlexSure CD elastic laminate, which offer elasticity and discretion in adult incontinence products. Adult incontinence items with FlexSure elastic film have less bulk, move more comfortably with the body and are quieter during movement.
Stretchability has been an important innovation behind the development of pull-on style disposable underwear, which are designed for more active adult incontinence sufferers. Largely supplied to the consumer side, which targets more ambulatory sufferers, this product style is also making inroads into the institutional segment thanks to government regulations requiring that an adult incontinence product be chosen to suit a patient’s individual need. “You have to have an individualized care plan for each individual,” explained Paperpak’s Mr. Fagan. “This means the caregiver needs to tailor the specific need and size requirement to the specific size and product. If you have someone who is cognizant, the appropriate product is pull-on underwear.”    
Approximately 50% more expansive than briefs, growth of pull-on diapers is a good thing  for manufacturers but a challenge for healthcare providers who often get the same Medicare and Medicaid reimbursement regardless of the product used. “The cost goes up and the reimbursement gets cut so there are some really hard choices for the healthcare professionals,” Mr. Fagan said.
And, as the number of individuals suffering incontinence continues to rise, so will the strain on healthcare agencies. Manufacturers of adult incontinence products, however, are keen  work with their partners, however, to ensure the best care for the patients, whether it be through new products modifications to existing products.
“Technology is evolutionary, not revolutionary, driven by material and process technology  which are consistently evolving and growing and ultimately offering products with a greater sense of dignity and comfort as well as care and performance,”  said Humanicare’s Mr. Better.            

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