Following on August 7's "China will have nearly twice the pets than young children by 2030, Goldman Sachs says".
From Sherwood News, August 19:
Bottom Line: The diaper industry needs a change
Diaper brands are being challenged not by a baby boom but by the graying of the globe.
he global markets for child and adult diapers, roughly $46 billion and $16.7 billion respectively, might seem static — the kind of habitual, locked-in consumer purchase that benefits big players like Procter & Gamble, maker of Pampers, and Kimberly-Clark, whose house brand is Huggies. But few products show just how much generational shifts can ripple through the wider economy.
The diaper industry has seen decades of slow but steady innovation and expansion ever since Marion Donovan, a mom from Indiana, became so exasperated with the endless cycle of soiled drawers that she invented a diaper-cover prototype made from repurposed shower curtains in the 1940s. In fact, the convenience became so popular with parents that potty training, which in Donovan’s time used to begin before 18 months, now starts closer to 36 months on average, in part thanks to the benefits of disposable diapers. Talk about a captive market.
Personal-care companies are being challenged not by a baby boom but by the graying of the globe. Whereas baby-diaper unit sales dropped 1% last year during a period of inflation and declining birth rates, adult-diaper products are forecast to grow nearly 8% a year and hit $28 billion in annual global sales by 2030. In the US, the diaper movement is indicative of the silver tsunami, a broad shift of the American population toward more aged individuals, many of whom may suffer incontinence related to pregnancy, childbirth, diabetes, or obesity, yet maintain an active social and sporting life.
Baby-diaper unit sales dropped 1% last year during a period of inflation and declining birth rates. Adult-diaper products are forecast to grow nearly 8% a year and hit $28 billion in annual global sales by 2030.You might not notice Depends flying off the shelf, according to Fairfield Market Research Manager Ritika Khandelwal, because much of the adult-diaper growth is coming from e-commerce platforms. There is “escalating worldwide demand” for disposable products made from natural materials, Khandelwal said, as well as pull-up-style diapers.
These changes have already taken place overseas, especially in countries grappling with cratering fertility rates. In March, Japanese manufacturer Oji Holdings announced it would stop selling baby diapers in its own country, going adult-only in Japan while selling child diapers in other Asian nations. The growing adult market is creating demand for more svelte, stylish, and less visible products. Ulrika Kolsrud, president of Sweden’s Essity health brand — maker of a low-rise, disposable underwear for adults called Silhouette Noir — said that "if incontinence was a country, it would be the third-largest country in the world."
This rise in demand has challenged manufacturers to keep up. One key issue is the astronomical cost of adding new production lines. A machine that makes just one size of diapers costs roughly $4 million, which Pricie Hanna, managing partner of Price Hanna Consultants and industry expert, said has been making it tough for new entrants in the industry. They may master marketing, but they’re usually stuck cobbling together contract manufacturing options as they scale.
Preparing production plants and marketing plans for this demographic shift remains a challenge. While sales of adult-incontinence products — don’t you dare call them diapers — have been growing steadily for years, they’re made on different machines than smaller baby diapers, requiring a delicate balance when it comes to shifting production lines. In addition to traditional problems like leakage and skin irritation, there’s also fitting and sizing to consider and the need to maintain discretion under clothing, a much more complex puzzle than making diapers for toddlers. Supply chains, industrial infrastructure, and changing consumer preference can make something as mundane as nappies a difficult market to break into and succeed in.
There’s also high dependence on specific raw materials like superabsorbent polymers, fluff pulp, and nonwoven fabrics, a shortage of which can lead to disrupted supply chains, Khandelwal said....
....MUCH MORE
Our outro from the Goldman story above:
Long cat furniture and adult diapers, short kid furniture and diapers? Easy enough.
Related January 2021:
Ahead of Tomorrow's North Minehead By-Election
Yesterday during an idle (not Eric) moment I found myself wondering who the largest toilet paper and adult diaper manufacturers were. In the U.S. the closest to a pure play is probably Kimberly Clark (KMB) with their Kleenex, Huggies, Kotex, Depend, Scott, Viva, and Cottonelle line up.
Proctor & Gamble and Georgia-Pacific are also pretty big with the latter's name leading us into the crux of the matter.....
