Industry officials are hopeful a host of new product launches and better category management will help to reinvigorate the baby care category.
Nature has hardwired parents to be loving, nurturing and protective toward their children. Many are adding penny-wise to that list. Parents might not put the effort or time into shopping for products for themselves, but when it comes to bringing up baby they are clearly willing to spend the time searching for bargains on diapers, training pants, wipes, cleansing products and the like.
In addition to bargain shopping and increased coupon use, during the past few years parents have increasingly turned to private label as a solution to reduce expenses. As a result, while the overall baby care market declined slightly, sales of private label disposable baby products have been posting healthy gains.
Another contributor to sales growth is coming from increased purchases from Hispanic parents. Research shows that nearly one-quarter of Hispanic households have a child under six, compared to just 12% of non-Hispanic households, which means the demand for baby products is high within that segment of the population.
Regardless of ethnicity, most parents are looking for the same thing—the most healthful products for their children at a reasonable cost. “The market for baby care products has moved toward a more demanding consumer looking for a number of product attributes including those that are clean, free and safe,” says a spokesperson for U.S. Nonwovens Corp. (USN), based in Brentwood, N.Y. The company recently introduced its new Sensitive line, along with its Biodegradable line of products to meet the customer’s needs and compete in this segment.
Mary Borneman, director of communications and public affairs for Los Angeles-based Hyland’s, agrees that while consumers increasingly seek products that are healthy and natural, safety is certainly a top priority. “Ten years ago, we did not see the same safety concerns around products for children as we do today. These warnings have made safety top-of-mind with every parent,” says Borneman. At the same time, she notes that given the range of choices available to them today the need to educate consumers about products qualities is strong.
Regarding skin care products for babies, Tino Reiser, founder of Coral Gables, Fla.-based BabySpa, points out that if parents find a brand that has all the qualities they desire, they prefer to buy all of their baby products from one collection. “That said, they do not want to sacrifice quality, textures and ingredients for price,” says Reiser. At the same time he explains his company’s focus is not following what’s trendy, but rather developing a strong understanding of the benefits certain skin care ingredients offer and using them with the purpose of promoting healthy balanced skin.
The company’s range of bath and body care products combines more than 30 different botanicals, including calendula, chamomile, aloe vera, sweet almond oil, pomegranate and avocado oil, say company officials. “We believe in matching the right natural ingredients to a specific purpose and need. Our collection offers a complete ‘A’ through ‘Z’ solution for parents, with everything from the essentials such as diaper cream, moisturizing body lotion, shampoo and body wash, to the more spa-oriented components, including bubble bath milk, face cream and massage oil.” The BabySpa line, notes Reiser, is formulated based on a stepwise approach with Stage One for newborns through crawlers and Stage Two for walkers through pre-schoolers.
Not surprisingly, the diaper segment, which represents 71% of category sales, led by Kimberly-Clark’s Huggies and Procter & Gamble’s Pampers brands, had the most new product launches last year, followed by body care, wipes, shower products and sunscreen. As the demand for natural ingredients and those addressing sensitive skin issues increased, parents seemed particularly interested in products making hypoallergenic and botanical claims.
“In baby diapers, the national brands have recently implemented a combination of price increases and package down count that have created confusion at the shelf,” says Chris Ferdock, vice president of marketing for Associated Hygienic Products, the Duluth, Ga.-based manufacturer and marketer of private label disposable diapers and training pants. “The grocery chains that are most able to adapt their pricing and product mix strategies to simplify the shopping experience should have an advantage.”
It is no secret parents are known to be brand loyal, especially those with young children under the age of three. Most prefer to rely on the same preferred brands when buying diapers with a similar scenario playing out with soap/shampoo and wipes. However, according to Chicago-based Mintel’s latest report on trends in the estimated $3.3 billion disposable baby product category, two aspects rate high in getting parents to consider another company—perceived bargains and a recommendation from other mothers.
More than one-quarter of moms Mintel surveyed ask friends for their opinion, while 18% turn to mom-focused websites for advice and an almost equal amount ask their pediatricians the best products to buy for their babies. What’s more, 42% reported buying larger pack sizes to lower their costs, a trend the Mintel report points out, retailers and suppliers may want to note.
As consumers’ desire to save their pennies continues, retail outlets such as club stores and mass discounters have become destinations for baby care purchases. Mintel’s research shows more than half of all sales in the segment take place in these types of stores. Not only are national brand wipes perceived to be less expensive here, retailers such as Target have introduced private label wipes that are giving premium products sold by national brands a run for the money, say observers. In addition, value-added products often sell below what many national competitors charge and thus appeal to those looking for value priced premium products.
Lucienne DePonte, category director for the baby and toddler category for Nice-Pak Products, based in Orangeburg N.Y., points out that with baby wipes and toddler wipes consumers seek the optimal combination of quality and value. She says as major retailers build and manage their store brands as true brands, consumers are looking toward store brand products for the innovation and quality they previously attributed to national brands. “As such, Nice-Pak provides both store brand wipes as well as branded wipes that support the health and wellness of the baby, toddler and the entire family,” says DePonte.
She also emphasizes that performance is an important criteria with baby wipes and those that help keep the baby clean, healthy and happy and enable caregivers to do the job with the ease are top on the list. “Nice-Pak’s investment in proprietary consumer research enables us to uncover the consumer insights to design products and programs for our retailer partners that speak to the needs of their specific consumers,” she says, adding that the company is continuously working on and introducing innovations in all aspects of the baby wipe product including the wipe itself, packaging and formulations to successfully fill the identified unmet consumer need.
Within the wipe category, customers are also looking for features that will address their baby’s sensitive skin issues, says the USN spokesperson. Responding to this trend, company officials at USN note their research and development team has recently developed a pre-moistened, alcohol free, hypo-allergenic wipe infused with a diaper cream formula for the company’s new rash guard baby wipes currently sold through CVS.
In addition, the company’s new premium baby wipes tub was recently redesigned with better convenience in mind for its end users. For instance, rubberized feet prevent skidding and slipping and a soft rubber tissue-feed allows consumers to reach into the tub without getting their fingers caught. A pull-tab for easy refilling and a soft rubber flex button are also featured. “These qualities are a few of the aspects that separate USN’s private label baby wipes tub from its competitors,” says their spokesperson.
Parents are looking closely at the ingredients found in the products they buy for their families today, notes Edward McCloskey, chairman and CEO of Irish Breeze Ltd., maker of WaterWipes, based near Dublin, Ireland. This is particularly true for products they use the most. “It is not unusual to use 10 baby wipes every day at baby change time. No other product is used on the skin more times, whether for adults, children or babies,” says McCloskey.
WaterWipes are made using 99.9% water and a small amount of fruit extract, which McCloskey says acts as a gentle natural skin conditioner, stabilizer and protector. “Our wipes do not contain any of the surfactants, emollients, stabilizers, preservatives or fragrances found in other wipes on the market which make them an ultra-mild and safe product for use on the skin of newborn babies and children and anyone suffering from sensitive skin. And because they offer a unique, chemical-free alternative to conventional baby wipes, WaterWipes bring incremental sales and profits to what has become a crowded ‘me-too’ category,” says McCloskey.
Bringing up baby
The baby care category is often thought of as one that targets newborns and up, but experts say grocery stores have an opportunity to stand out by catering to moms with older children. “A void in solutions for children 2 to 12 years old exists at many retailers, especially drug stores and grocery stores, and this could be a unique niche for a grocery store to fill,” says Borneman. She adds that grocery stores benefit from offering a wide variety of solutions in the baby aisle, but says if they extended that to also include solutions for children ages 2 to 12, many moms would have a reason to make that store a specific destination for these purchases.
When it comes to the top things retailers should be doing now to be part of the baby care category’s future business, experts point out it’s more an issue of what retailers shouldn’t be doing. They say grocery stores should not focus as much on building a simple baby aisle, but instead create a unique children’s aisle with products for a range of ages. “Babies are babies for just two years. Grocery stores can keep mom shopping this aisle for another nine to 10 years with the right mix of kids’ products,” says Borneman. “If grocery stores want to remain relevant in baby care going forward, they must make their baby aisle special by offering more than just the basics of infant needs—diapers, wipes, bottles and formula—but also expand to include the unexpected but beneficial products, such as premium baby medicines like Hyland’s Baby line.”
To further grow the category, officials say grocers must make sure that mom has healthy, affordable solutions throughout the grocery store. More specifically they say grocery stores should feature baby and children’s products in produce, dairy, frozen foods and in the cereal aisle to ensure mom finds all that she needs at the grocery store. Experts note grocers also need to ensure they are quick to market with new products, and point out the first few months a new launch is out is a critical time to be in stock.
That said, officials at Hyland’s note they are launching a new baby line early in 2012 that includes a couple of new products and packaging updates on already established and trusted products in the market. “The new look provides a consistent image and makes the line easier for moms to identify at shelf,” says Borneman. “Our mission challenges us to constantly be providing safe, effective and natural medicines that meet our consumers’ needs. Unfortunately, safety concerns surrounding many medicines for infants and children has left moms with a significant lack of choice in caring for their children’s health. Hyland’s has been trusted by moms for generations and we wanted to ensure we offered her health solutions that meet her family’s needs.”
To grow the wipe category, DePonte stresses the importance for grocery retailers to understand the needs and preferences of its particular customer base and design a baby and toddler wipe program that specifically aligns with those needs. “Managing the baby wipe line as a brand and properly addressing the four Ps—product, price, promotion and place—will enhance performance. Conversely, SKU proliferation and an imbalance between branded and store brand products in the set are common errors that often prevent retailers from experiencing the category’s full potential,” she says, adding that the key to building trial and ultimately loyalty of the store brand is to support the line with proper marketing programs.
According to Reiser, to be considered a one-stop shop for baby grocers need to focus on offering a balanced assortment of different brands that target a variety of parental preferences and approaches. “A good assortment does not necessarily mean an offering of different scents or different product types, but a truly comprehensive and diverse array of products that parents will find valuable and feel good about purchasing,” he says. BabySpa products are free of all the harsh chemicals and respect environmental sustainability.