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    Features

    The Baby Diaper Market

    Diaper manufacturers cater to diverse market demands across the globe.

    The Baby Diaper Market
    The Baby Diaper Market
    Pampers recently introduced Pampers Preemie Swaddlers Size P-3—its smallest diaper ever made. The new diapers fit babies weighing as little as one pound.
    The Baby Diaper Market
    California-based Parasol Co. launched a premium line of diapers and wipes last year.
    The Baby Diaper Market
    Paddlers is a new diaper brand, made by Turkish newcomer Enka Hijyen,
    The Baby Diaper Market
    Kimberly-Clark has donated over 200 million diapers to the National Diaper Bank Network in the last six years.
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    Tara Olivo, Associate Editor01.02.17
    The global baby diaper market is expected to grow. Market growth is expected to reach a CAGR of 4.1% between 2016-2024, hitting a value of $70.4 billion at the end of 2024, a report from Persistence Market Research says. Volume wise, the research firm expects the market to register a CAGR of 3.5% over the forecast period.

    Diaper manufacturers continue to see significant potential in Asia and other developing regions where living standards and disposable incomes are rising.

    In China, increasing concerns over product safety as a result of the 2008 baby milk scandal have steered parents towards premium, foreign-produced diapers in the country’s urban areas. Imported premium products from Japan such as Kao’s Merries and Unicharm’s Moony diapers have found success in the world’s most populated country. High-demand for imported diapers in China has led companies such as Kao, Oji Holdings and Unicharm to expand their Japanese plants.

    Although these makers are boosting production to satisfy parents’ thirst for premium products, diaper industry consultant Pricie Hanna, managing partner of Price Hanna Consultants, suggests that China’s middle class is starting to approach high penetration levels. “If you think of it as an S-curve, China has been in a very steep part of it. As it starts to level out with that segment of the population, we’re going to see some decline in the growth rate,” she says.

    When predicting China’s growth in the future, the gradual rising standard of living of the rural people and the migration rate of rural to urban need to be considered, according to Hanna. “This has been a large part of China’s growth story in the past,” she says. “So if the rate of migration from rural to urban China slows down, which it has been a little bit recently since the country’s general economy isn’t creating the jobs that it used to, that’s going to take away this additional possibility of more people in the urban areas joining the middle class. But while we’re predicting the China diaper growth rate will go down a little bit, it’s still much higher than it is in the developed markets.”

    India, on the other hand, offers huge market potential to diaper makers and is experiencing growth, with more than a 20% CAGR over the last seven years, according to a new report on the Indian diaper market by Bonafide Research. The study finds that the increasing birth rate, higher disposable incomes and increased hygiene awareness are factors driving market growth in the country, and while uptake of disposable diapers is still low, many major players are investing on product innovation and development in the region.

    Although there are high hopes for growth in India, industry veterans agree that the country’s diaper market won’t see penetration rates rise as quickly as its neighbor to the north.

    “India has the largest population of babies in the world, and it is experiencing a solid economic growth, but its growth will not be as fast as China,” says longtime industry consultant Carlos Richer.
    Meanwhile, Hanna points out that India’s population structure is very different than China. “People are always comparing those two numbers,” she says. “But in India, there’s a lot of urban poverty as well as rural poverty and yet the issue is still the same. Is there a growing middle class, and are they optimistic about their income growth? Are women working? Things like that really drive faster penetration. We are starting to see pockets of that in India, and we certainly have every hygiene leader in the world in there getting the story out and trying to find ways to push it.”

    Major global players Procter & Gamble and Kimberly-Clark have had a presence in India, and Unicharm is one of the latest entrants into the market. In 2015, SCA opened its first production facility in the country.

    Swaddling, and Hugging, the Tiniest Babies
    Meanwhile, in the U.S., baby diaper manufacturers have been focusing on innovation. Diaper market leader Procter & Gamble, maker of Pampers and Luvs, recently introduced its smallest diaper ever for premature babies in collaboration with NICU (Neonatal Intensive Care Unit) nurses. The new Pampers Preemie Swaddlers Size P-3 is three sizes smaller than newborn diapers to fit the tiniest and most vulnerable premature babies born in the second trimester and weighing as little as one pound (500 grams). Pampers claims it is the first major diaper brand to offer a diaper specifically designed for babies this small.

    “The diaper was created as a result of advances in medical science, which have enabled younger and smaller babies to survive, creating the need for even smaller preemie diapers that are also specially designed to meet their unique needs,” according to a P&G Pampers spokesperson.

    In a recent survey conducted by Pampers, nurses told the brand that currently available premature diapers do not conform to a premature baby’s shape and proper positioning for optimal development. The Size P-3 diapers are designed to minimize disruption to help with sleep, positioning and medical care for premature infants. A contoured narrow core was added to help with developmentally optimal hip positioning.

    P&G’s Pampers product development and consumer research teams spent three years and over 10,000 hours of research to create the diapers. The new preemie diapers are currently available in hospitals across the U.S. and Canada.

    Pampers also introduced a nighttime diaper to its Swaddlers line last year. New Pampers Swaddlers Overnights feature added absorbency compared to regular Swaddlers to provide extra leak protection and dryness for up to 12 hours overnight, according to the Pampers spokesperson.

    Meanwhile, Pampers Easy Ups training pants received major upgrades in 2016 to make them feel more underwear-like. A new 360 Degree stretchy waistband provides the underwear-like fit to help make it easier for toddlers to pull on and off, according to the Pampers spokesperson. The enhanced Easy Ups now feature Pampers’ exclusive Extra Absorb Channels for outstanding leak protection. Extra Absorb Channels were first introduced to P&G’s Pampers Swaddlers and Cruisers lines in 2015. “The Extra Absorb Channels distribute and lock away wetness evenly from front to back for a noticeably better fit, unlike ordinary diapers which have one unstructured core,” the spokesperson says.

    P&G’s more affordable Luvs brand now features softer and more absorbent diapers, with large stretch tabs for easy fastening, ultra-leak protection and a money-back guarantee. New Luvs Ultra Leakguards with Nightlock Plus provide the features babies and parents need for less cost than the premium brands, according to P&G.

    The other top diaper brand—Kimberly-Clark’s Huggies—also introduced a new preemie diaper last year. Huggies Little Snugglers Nano-Preemie Diapers were developed in partnership with NICU nurses for babies up to two pounds. The new diapers offer skin protection, a gentle and comfortable fit, and leak protection for the tiniest babies. Meanwhile, the brand’s Little Snugglers Micro-Preemie Diapers, which fit newborns up to four pounds and have been available for several years in U.S. hospitals, were recently enhanced in response to feedback from NICU nurses, according to Terry Balluck, Huggies spokesperson.

    Both preemie diaper lines are 100% hand inspected, folded individually and packed by hand to ensure baby’s delicate skin is clean and healthy. Other features that set Huggies preemie diapers apart are “cute and comforting graphics,” which Balluck says helps give parents a sense of normalcy during a stressful time. “Huggies is the only brand with this feature in micro- and nano-preemie sizes,” he says.

    Huggies Little Snugglers Micro-Preemie and Nano-Preemie Diapers feature a specially designed narrow crotch to promote healthy growth and development while the baby is in the NICU. The Nano-Preemie diapers will be available in hospitals nationally in February 2017.

    The introduction of the new and upgraded diapers coincided with the launch of Huggies’ “No Baby Unhugged” campaign to ensure babies get the hugs they need to help them thrive. Research from a recent Huggies study titled “The Power of Human Touch for Babies,” showed that the natural act of parents hugging their babies does more than just cry or soothe them; hugs can help keep a baby’s heart beating at a normal rate, improve sleep and support healthy weight gain.

    “We believe deeply in the power of hugs, that is why every Huggies diaper and wipe is inspired by parents’ hugs - to nurture baby with care, cradle baby in comfort and surround baby in protection,” Giusy Buonfantino, president of Kimberly-Clark Baby and Child Care North America, said at the launch of the campaign. “Today, Huggies is announcing No Baby Unhugged to ensure babies get the hugs they need to thrive - from physical snuggles in hospitals and specially-designed products for the tiniest of babies, to diapers and wipes donations.”

    No Baby Unhugged will help babies in the NICU get the hugs they need when moms and dads can’t be there, by funding grants for volunteer hugging programs in U.S. hospitals. NICUs are increasingly integrating volunteer hugging programs to make sure that the approximate 380,000 pre-term infants born in the U.S. and other newborns receive enough human contact for their health and welfare.

    A New Approach
    Meanwhile, newcomer Parasol entered the U.S. baby diaper market last year, offering premium baby diapers and wipes via monthly subscription. The Walnut Creek, CA-based company differentiates itself on the market by offering a softer and thinner eco-conscious diaper, while providing transparency by listing its products’ ingredients on the Parasol website. The diapers’ modern, whimsical prints designed by up-and-coming artists also set them apart from other diapers on the market.

    Jessica Hung, co-founder of Parasol, conjured up the idea to create a premium diaper for the active, design-conscious parent nearly three years ago. Hung and her partners wanted to create a better diaper—something that was lighter, thinner, easier for movement and extremely soft. This concept ultimately led to a partnership with Drylock Technologies of Zele, Belgium, which began manufacturing Parasol’s low-fluff diaper with an ultra-soft three-dimensionally embossed topsheet made through the air bonding process. “I think we provide very different features compared to other products on the market right now,” Hung says.

    Since its U.S. launch last spring and its debut in China over the summer, over 15,000 parents who took advantage of the company’s free trial program have tested out Parasol diapers. As part of the program, each delivery contained eight diapers and a pack of travel wipes for the cost of a $5 shipping fee. The community of parents the company developed through this e-commerce effort has helped the new brand understand what parents truly need. “The response has been overwhelming,” she says. “We want to service this tight community, so we’ll continuously develop a lot of different programs to work with these parents. We want to continue to satisfy these millennial parents who embrace us with their spirit and who like our design.”

    Next up for Parasol is the early 2017 launch of new backsheet designs for its diaper line, something its community of parents voted upon, as well as new products including pull up diapers. The brand also plans to expand its geographical footprint with launches in Canada, Mexico and Europe in the first quarter.

    “It’s been a very interesting journey,” Hung says. “In the past seven months, we really have learned a lot and listened very carefully to what our user really wants, so that’s the mission—we will continue to deliver on what is truly needed.”

    Over in Japan, market leader Unicharm catered to Asian parents’ desire for eco-friendly diapers with the launch of Natural Moony diapers in October. Natural Moony is the country’s first disposable diaper for babies with a topsheet containing organic cotton, increasing softness to the layer that touches baby’s skin. Also, by switching the hydrophilic agent used for the sheet to purely plant-derived one, the sheet has been made additive-free, mildly acidic to make sure that babies wearing the diaper can feel secured, according to Unicharm.

    By using what the company calls the “Yuru-unchi Kyushu Zone” (soft stool-absorbing zone), a newly developed technology of using an uneven structure to absorb soft stool, Natural Moony has reduced the amount of soft stool remaining on babies’ buttocks – something that typically happens with babies less than four months old – by 36%. This helps reduce the chances of diaper rash, Unicharm says.

    At a launch event for Natural Moony, Takahisa Takahara, president and CEO of Unicharm, said: “In developing Natural Moony, we aimed to realize a diaper that allows babies to feel as if they were gently enveloped by their mothers’ hands at all times. As the social environment surrounding mothers has undergone drastic changes in recent years, the demand for disposable diapers from those rearing their children has become increasingly sophisticated and diversified. We are confident that Natural Moony can meet the requirements of our customers, who want to select diapers using natural, safe and high-quality materials, just like when selecting food and cosmetics.”

    More New Launches
    On the private label side, which is well established in Western markets, baby diapers continue to gain acceptance among consumers. “I think that after years of insisting, [private label brands] have been able to educate the consumer about the benefits of their private label options in these mature markets, adding trust and performance into the equation and not just the issue of the price as they did before—though this is still an important element,” Richer says.

    Hanna suggests that in today’s market, the consumer doesn’t think about a diaper as being private label or even associated with a particular store. “They just usually go to this store and they like that product. They think of it as just another brand,” she says.

    When consumers are asked which brand they like the most, Hanna says private label store brand names do come up. “Competition with major brands is just competition between brands in the eyes of consumers.”

    Svetlana Uduslivaia, head of Tissue & Hygiene Industry at Euromonitor International, agrees that private label has a significant presence in the category in North America and Western Europe. “Aside from competitive pricing, retailers have been investing in product development to ensure they compete better with the leading branded products,” she says.

    A new addition to the private label market in the U.S. is grocer Aldi’s Little Journey line of baby changing and feeding essentials, which launched in August. The line includes gentle cleansing wipes, diapers in six sizes and training pants for on-the-go toddlers.

    Claiming the diapers’ ingredients are consistent with ingredients used in national-brand diapers, Aldi’s hypoallergenic Little Journey diapers and training pants are made from soft, stretchy, safe materials, and their layered design quickly pulls moisture away from babies’ skin to a super-absorbent core. The diaper’s premium stretchy side panels provide a snug fit to guard against leaks, while Vitamin E and aloe help protect baby’s delicate skin.

    “The initial consumer response has been positive,” Uduslivaia says of the Little Journey line. “Interestingly, too, while most private label products are not widely advertised in traditional media, Aldi announced the launch of its new line not only on social media but also on national TV networks.”

    In Turkey, Enka Hijyen is a new entrant to the baby diaper market. The Gaziantep-based manufacturer is part of Imam Kayali Holding, a privately owned family company active in different fields of trade and industry, which include factories that produce polypropylene continuous multi filament yarns as well as nonwoven fabrics. Founded in 1928, Imam Kayali Holding is currently managed by members representing the fourth generation.

    A €27 million investment by Imam Kayali Holding, Enka Hijyen’s production process follows GMP regulations and complies with all EU standards. Its state-of-the-art technology allows production of high volumes of baby diapers set to fit different needs.

    The company currently produces three brands of diapers. Paddlers were created to provide premium comfort and dryness. The diaper is specially designed to give maximum protection and fit for babies and features elastics ears, high absorption and retention capacity, cream lotion and a wetness indicator. Cushy Baby diapers were made for consumers who look for an affordable diaper without sacrificing quality. This brand offers a comfortable, dry solution for a good value. Lulla Baby is Enka’s economical baby diaper brand. Offered with elastic ears, Lulla Baby products are ideal for parents who desire good comfort at decent performance that fits within their budget.

    A limited portion of Enka Hijyen’s manufacturing capability is available for private label manufacturing services.

    Tackling Diaper Need
    In March, U.S. President Barack Obama made a call to diaper manufacturers and online retailers to make diapers more affordable, citing stats that say one in three families have trouble affording diapers. As part of these efforts, Obama also asked Congress to earmark $10 million to test effective ways to get diapers in more poor families’ homes.

    Once considered a luxury, diapers have become a necessity and aid in the well-being and health of infants. This necessity is even more expensive to low-income families who may not have access to transportation to travel to big box stores, or even have the capital to buy in bulk at cheaper prices, the White House says, and because of this, these families can pay 14% of their income for diapers alone.

    Kimberly-Clark responded to the president’s call with a pledge to donate 22 million free Huggies diapers to the National Diaper Bank Network (NDBN), which was founded in 2010 to create national dialog on the collective impact of diaper banks in addressing a most basic need of babies, access to clean diapers. Huggies, a founding sponsor of NDBN, has donated over 200 million diapers to the organization over the past six years.

    Meanwhile, online retailer Jet.com partnered with Cuties diapers maker First Quality to make diapers more accessible to low income families. Through this partnership, the companies created an economy box of diapers that offer more diapers per box and removed the expensive graphics from packaging. The Cuties Economy Plus Pack brought the price per diaper down to 13-17 cents from 30-50 cents, without sacrificing quality.

    For its part, P&G’s Pampers brand pledged to donate an additional one million diapers through its long-term partner FeedingAmerica, which provides food and household essentials through 200 food banks and more than 60,000 agencies across the U.S. According to P&G, Pampers has donated millions of diapers and wipes to U.S. families through the organization over the last 10 years, and the company also regularly donates diapers and wipes to communities in need as part of P&G’s ongoing disaster relief program.
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