The right assortment and pricing can help grocers nurture growth in the baby care category.
Of the many nonfoods categories, baby care has arguably undergone one of the largest transformations as of late. As the average age for motherhood inches up, retailers are seeing a more mature customer shopping the category, someone who brings with her an educated and discerning opinion.
She is also a person to which national brands are attractive but is willing to consider private label products too, as long as they offer her the desired features. That said, her purchasing decisions for products such as diapers, wipes, remedies and skin care are most often influenced by aspects such as quality, safety, value, features and price.
According to the report, Baby Care Products Market—Global industry Analysis, Market Size, Share, Growth and Forecast, published by Transparency Market Research (TMR), the global baby care product market’s prospects—present and future—look bright. The Albany, N.Y.-based consultancy anticipated global baby care sales of nearly $48 billion at the end of 2012 and is predicting five-year growth to reach approximately $67 billion by 2017. As they see it, the growing baby population in developing nations, where two parent working households means the disposable income of parents is also increasing, largely fuels growth.
Continuing a trend that started several years ago, diapers, wipes and skin care products are the segments in the category seeing the most innovation and sales growth.
Additionally, the TMR report found hair care and bath gels among the segments expected to see the most growth during the next several years.
At the same time, from a brand perspective, the baby care product market remains largely fragmented and mostly dominated by companies such as Procter & Gamble (P&G) and Dallas-based Kimberly-Clark. According to the report, Cincinnati-based P&G led the overall baby care product market with its premier diaper brand Pampers.
Kimberly-Clark was the second largest baby care product manufacturer with baby toiletries brands such as Huggies, Pull-Ups, GoodNites and DryNites. Johnson & Johnson, based in New Brunswick, N.J., is the third largest baby care player with its large range of baby skin and sun care, hair care and bath products.
For the past several years, private brand baby care companies have been making significant inroads in the market by introducing product innovation and winning the trust of parents.
Private label diapers still growing
Officials at Associated Hygienic Products (AHP), based in Duluth, Ga., say the company has experienced significant growth during this time with baby diapers. Chris Ferdock, corporate vice of president marketing, expects the growth to continue for some time. “Our company’s expertise in diaper-related product technology, innovation, design and patent portfolios is unmatched and continues to provide our retail partners with a competitive advantage,” says Ferdock.
And in the diaper category, Ferdock says this means a commitment to providing best-in-class performance with a focus on leakage protection and overall fit. “We understand what it takes to build a foundation with new mothers and gain their trust,” he says. As a result of this insight and dedication to innovation, AHP has pioneered a number of unique product features ranging from their patented Accordion-Stretch fastening system and dual core technology to their fit guide application system.
“It is no doubt that the category has matured, dominated by a few key CPG brands,” says Tom Hill, senior vice president and general sales manager for Diamond Wipes International, based in Chino, Calif. Changing lifestyles, especially in urban and metropolitan areas, are creating new opportunities for companies of all sizes to introduce products to suit the ever more mobile and on-the-go population, he explains. “If I were to sum it up I’d say it is all about more convenient packaging, more portable products and quality over quantity,” says Hill.
The increasing number of new mothers and fathers who have a genuine desire to select products that are ethical and ecologically sustainable, is also influencing innovation, notes Hill. To meet their part of this responsibility, Diamond Wipes recently invested in clean and renewable solar energy, designed to offset about 86% of its energy consumption. “Last fall we were awarded FSC (Forest Stewardship Council) and Rain Forest Alliance certification—a commitment to responsible management of world’s forestry resources,” he says.
Sourcing sustainable materials
Another company that is becoming synonymous with environmental consciousness is Atlanta, Ga.-based Valor Brands, maker of a full range of disposable diapers and training pant products sold under both control brand and private brand names. As a company long dedicated to its retailer’s category growth and profitability, company officials note their focus continues to be on sourcing the best materials, utilizing state-of-the-art technology, stressing quality and innovation and staying on top of consumer needs and trends.
For instance, under their own Nurtured By Nature brand, the company offers environmentally sensitive diapers that are better for the environment without compromising premium performance. For instance, the company’s diapers feature a moisture barrier made from natural plant materials, an inner liner and outer cover made using renewable resources and feature a unique absorbent diaper construction made of bio-based absorbent particles and plant materials. Moreover, because they use a totally chlorine-free pulp, no dangerous dioxins are released into the environment, company officials explain.
Indeed, companies that understand their consumers’ needs and wants are pulling ahead in this uber-competitive category. “We understand that a baby’s skin care regime is not defined by the hottest thing out there—it should be defined by knowing which ingredients are good and which are not, understanding the benefits of these ingredients and using them with the purpose of promoting healthy balanced skin,” says Tino Reiser, president of Coral Gables, Fla.-based BabySpa.
Company officials also believe in matching the right natural ingredients to a specific purpose and need. As such, Reiser explains that the BabySpa range of bath and body care products combine over 30 different botanicals, including calendula, chamomile, aloe vera, sweet almond oil, pomegranate and avocado oil, among many others.
Wide range of products
Not long ago, parents shopping for health remedies for their children had little choice but to purchase conventional products. Product recalls and concerns over safety have prompted both retailers and parents to consider other options, including homeopathy. “As the oldest and largest homeopathic manufacturer in North America, we take pride in providing people with safe alternatives to traditional medicines,” says Les Hamilton, vice president of sales for Los Angeles-based Hyland’s. “Moms can feel confident in giving their children Hyland’s products knowing they provide natural relief and are safe, effective alternatives for traditional treatments.”
He also attributes Hyland’s success to the dual placement its products often receive. “Retailers are merchandising us in the baby aisle as well as the cough and cold department with some of our newer items, such as Hyland’s Baby Cough Syrup and Hyland’s Baby Tiny Cold Tablets,” he says. “This has proven successful for the retailers as the dual placement ensures we are where moms shop for these solutions and we are both meeting her need to provide relief to her ailing child. We understand that we will have to continue to drive excitement to the category with further innovation as we move forward.”
Officials at Diamond Wipes note that the company specializes in creating wet wipe products configured to maximize convenience and portability. As such their baby wipe line falls into two primary segments—individually sealed wipe packets and resealable flexible pouches that are considerably smaller than conventional pouches. Accordingly, Diamond Wipes recently launched compact-sized travel-friendly baby. Dubbed La Fresh Travel Lite, the wipes are designed to meet the needs of consumers’ increasingly mobile lifestyles.
According to Reiser, the BabySpa collection was created to offer a complete solution, 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.
Following the lead of some conventional baby care companies, BabySpa’s line is formulated based on a stepwise approach, with each stage offering special formulations and age-appropriate scents tailored to the skin care needs of babies and toddlers as they grow. “Our natural bath and body care collection provides parents the opportunity to become comfortable with one brand and stay with it throughout their babies’ growing years,” he says.
Aside from offering products that address everyday needs, Reiser notes that innnovative packaging and offerings can also help grocers to increase baby care sales and value. BabySpa, for instance, offers a variety of gift sets and bundle value packs as well as unique counter top solutions featuring travel size options. “This can increase impulse buys and generate extra revenue for grocers, plus encourage product trial by consumers, which will in turn, convert into future full size product purchases as well,” he says.
Pick your partners carefully
While other companies may make similar-looking products, Ferdock says what makes AHP stand apart most is its extensive knowledge of both the baby diaper category and its consumer base, which enables them to provide meaningful insight and counsel to their retail partners. “As such, we developed a comprehensive process to understand the dynamics within the category and apply the findings through category management and marketing tactics,” says Ferdock. This, he adds, allows AHP to rapidly transform category trends into actionable opportunities to support and enhance their retailer’s strategic plans.
For example, Ferdock says the company recently invested in the development of a social media department to support retailer’s direct-to-consumer marketing initiatives. “This fully-staffed department is capable of guiding and managing our retail partner efforts in terms of discussion content, navigation strategies, specific forums and advertising tactics,” he notes.