The baby care category has taken a hit in recent months from scrimping parents. While customers are still willing to pay for the convenience of disposable diapers and wipes, nonessential extra lotions and other care products may not be on their shopping lists. Another historic trend could bring tears to the baby care aisle in the near future: couples tend to delay having babies during tough economic times.
Supermarkets continue to be vulnerable to the pull of drug chains and mass merchandisers in the area of baby care. From 2006 to 2008, drug and mass baby care sales (excluding Wal-Mart) grew 9 percent while category sales dropped 7 percent in the grocery channel, according to “Oh Baby,” a February 2009 study by Mintel, a Chicago-based research firm. In families with kids, 84 percent purchase disposable diapers at mass merchandisers while 35 percent buy at supermarkets. One reason may be the desire to buy in bulk for value and convenience, cited by 83 percent in the Mintel survey. While there may be stiff competition from other retail channels, the baby care aisle remains an important category in supermarket sales. “We are seeing baby care items trending up slightly overall (3 percent to 5 percent) this year vs. a year ago,” notes Dale Pinkston, grocery category manager at United Supermarkets. “In some products, diapers for example, items are being packaged in larger quantities, which naturally leads to a reduction in unit sales. In spite of this, our unit sales in diapers are up vs. last year.” Based in Lubbock, Texas, United operates 50-plus stores under three formats: United, Market Street and Amigos United throughout west Texas and the Panhandle.
Pinkston says his stores have no clear-cut leader in diapers and pullups. “We have a very good mix of brands as a company, and no single brand is leading the category. However, we have noticed the business moving toward our store brand [Top Care] in most of our markets. Storebrand quality has improved dramatically in recent years, and with the economy being what it is, that is causing a shift that is certainly noticeable.”
The Disposables Sales of disposable diapers and wipes held steady over the past year. Surveys indicate that consumers are more willing to cut out multiple lotions and other baby products before sacrificing the convenience of disposable diapers and wipes. Mothers are not willing to “trade down” either. Brand loyalty is high for disposable diapers, with 97 percent of those surveyed by Mintel indicating that some brands work better than others do. Kimberly-Clark’s Huggies is the most used brand, according to the survey. “Over the past six to nine months, in the diaper category, we have seen some slight movement into lower-tier offerings,” says Tim Abate, Huggies’ senior brand manager at Kimberly-Clark, in Irving, Texas. “Through February 2009, private label share has increased less than 0.5 share points vs. last year (Nielsen Measured Outlets, YTD ending Feb. 28, 2009, dollar share). “We’re continuing to see the super-premium segment do well, with moms showing a willingness to pay a premium for the right additional benefits,” Abate notes. “Huggies Overnites, a super-premium offering, experiencedtremendous growth in 2008.” Abate says the same trend is seen in newborn through size 2 diapers. “Across the category, super-premium has held strong, despite the tough economy.” Consumers have not traded down when purchasing training pants either, according to Mintel. Kimberly- Clark’s Pull-Ups is the leading training pants brand. The launch of Pull-Ups NightTime training pants over a year ago is helping drive category growth, according to Michael Krebsbach, Pull-Ups’ senior brand Manager
To meet customer demand for natural products, Kimberly-Clark just launched Huggies Pure & Natural diapers, a super-premium product with soft natural, organic materials. “This new diaper includes organic cotton in the outer cover, aloe and vitamin and renewable materials in the inner lining, and uses packaging sourced from 20 percent postconsumer recycled materials,” Abate Explains.
Mothers have an additional incentive to purchase Huggies with its new program, “Enjoy the Ride,” offering chances to earn rewards and instant prizes. Huggies will also give away one-year’s supply of diapers every day for the next Year.
During these tough times, Pampers is promoting its disposable diapers as helping keep baby drier longer, so fewer diapers may be needed.
The Procter & Gamble product adds lotion to “protect baby’s skin better than brands without lotion.” Pampers recently launched its newly designed Web site, including Pampers Village, where moms can chat online. Special offers and benefits are also available. By registering on the site, moms can collect points as part of the “Pampers Gifts to Grow Rewards Program,” redeemable for items such as free Pampers products and gift cards.
The use of disposable wipes and towelettes away from the changing table has helped grow the segment. “Moms are using baby wipes for more than just cleaning bottoms. Research has shown that some moms are concerned about using wipes for face and hand cleaning,” says Josh Thyren, Huggies’ brand manager. The company is launching Huggies Supreme Thick’n Clean wipes for hands and face, which are hypoallergenic, fragrance-free and alcohol-free.
Another new towelette:
Huggies Soft Skin wipes with Shea Butter. Pacifying Sales Sales of baby bottles and nipples are down 7.9 percent from last year while baby and nursing accessories are down just over 6 percent (The Nielsen Company, 52 weeks ending March 21, 2009, excluding supercenters). NUK USA, LLC is not daunted by these numbers. NUK purchased the complete line of Gerber baby care accessories in January 2009 and is developing NUK-branded products to complement the Gerber items. “We will address the need for oral care items at each stage of baby development,” says Olivier Foglizzo, VP, marketing & business development, at NUK USA in Parsippany, N.J. “With the purchase of Gerber accessories, NUK became not just the No. 1 brand of pacifier in the United States, but also the No. 1 vendor (including NUK and Gerber branded bottles) of reusable baby bottles. In 2010, the NUK brand will be in all categories of oral development and feeding.”
“More than ever, parents are looking for safer products and brands they can trust,” Foglizzo notes. The original NUK orthodontic-shape nipple, developed by physicians over 50 years ago, mimics the mother’s shape during breast-feeding. NUK’s line includes natural feeding products, orthodontic nipples and pacifiers, bottles, cups, oral care, utensils, and tableware.
The latest line of pacifiers and cups from NUK features popular new designs: Wild Life and Animal Faces. Also new this year are widenecked polypropylene baby bottles that are BPA-free. Other new accessories are based on the current trend toward breast-feeding, sometimes for economic reasons, Foglizzo notes, which is the reason that NUK developed new accessories in addition to its current milk bags, pads and balm. A breast pump will join the rebranded line next year.
Parents looking for safe baby products often seek natural or organic items. “Moms will spend more on natural baby skin care, but they want the assurance of a proven and trusted natural brand,” notes Jessica Iclisoy, founder of California Baby, a line of 45 organic products, mainly skin and bath items. The former fashion executive began planning her Culver City, Calif.-based company after the birth of her first son. After reading a list of baby shampoo ingredients, Iclisoy decided to create an alternative product using only pure essential oils and nontoxic cleansers. After years of research, California Baby went to market in 1995.
“California Baby Calming Shampoo & Bodywash was our first product and remains a top seller to this day,” Iclisoy says. Seasonal items like the company’s nonchemical SPF line sell out during summer even though they carry a high retail. “California Baby has a top seller for every category – diaper care, shampoos, bubble baths or sun care.”
The key driver in the baby care category, according to Mintel, is the birth rate. The number of children age 3 and under rose 5.8 percent from 2003 to 2008; growth estimates for 2008 to 2013 are an additional 3 percent. The economy may exert some influence on future growth.