Diaper Sales Down in the US, Americans Having Fewer Babies

detroit.cbslocal.com | 6/14/2018 | Staff
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(CNN Money) — America’s birth rate is at its lowest level in three decades. That’s a problem for Pampers and Huggies.

Birth rates began dropping in 2008 as the economy sank into a recession. Better access to contraceptives and younger Americans having children later in their lives have extended the decline, the National Center for Health Statistics found.

Downturn - Diaper - Training - Sales - %

The downturn caused disposable diaper and training pant sales to fall almost 6% from April 2017 to 2018, according to Nielsen’s most recent brick-and-mortar retail scanner data.

“This new reality is beginning to take a substantial toll,” said Svetlana Uduslivaia, the head of industry research at Euromonitor International. The diaper slump will probably be the “normal for the foreseeable future.”

January - Kimberly - % - Workers - Manufacturing

In January, Kimberly said it would lay off around 13% of its workers and shutter 10 manufacturing plants to save money in the pinch.

“You can’t encourage moms to use more diapers in a developed market where the babies aren’t being born,” chief executive Thomas Falk told analysts.

Diapers - Businesses - Companies

Diapers are key businesses for both companies.

Huggies or Pull-Ups account for about a third of the company’s $18 billion in sales, according to AllianceBernstein analyst Ian Gordon.

Pampers - P - G - Brand - Year

Pampers are P&G’s top-selling brand, bringing in more than $8 billion a year. The conglomerate’s baby care unit was its second largest business in 2017. It made up 14% of P&G’s $65 billion worth of sales.

Huggies and Pampers have cornered the market by convincing parents that their diapers are the safest and most reliable for newborns and toddlers.

Year - P - G - % - Market

Last year, P&G controlled 43% of the market and Kimberly grabbed 35%, according to Euromonitor.

“Parents are extremely brand loyal when it comes to products for their kids,” said Morningstar analyst Erin Lash. “If a diaper works and you don’t have accidents or issues when you’re out with your child, you probably will stick with it.”


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