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Over the past few years, raw material shortages, supply chain disruptions, inflation and declining birth rates have tested manufacturers and brands in the baby diaper market. Despite these concerns, innovation in the field of baby diapers is still active, and new brands and products are constantly emerging.

"For the diaper industry, the epidemic is a double-edged sword," said Sonali Jagadev, a beauty and fashion research analyst at Euromonitor (Euromonitor). On the other hand, increased awareness of health and environmental protection has promoted high value-added products with clean sources, natural, plant-based and organic products. Now we have to face some new questions: how to achieve a balance between value and quality, and how to achieve that balance in a post-COVID-19 world?

Dyper CEO Sergio Radovcic said the supply chain has proven to be one of the most pressing challenges for young brands. "The ongoing impact of the outbreak, raw material availability and price volatility. This is often particularly detrimental to brands like Dyper, which rely on specialized plant-based materials and unique raw materials, and must demonstrate a high degree of resilience to ensure uninterrupted supply to consumers. These challenges also provide unique opportunities for innovation, which is natural for young brands rooted in challenging the status quo."

Price Hanna, managing partner of Price Hanna Consultants, pointed out that all competitors have been forced to increase diaper prices to pass on the increase in material and supply chain prices. "So far, retailers and consumers seem to understand this and have generally accepted the price increase. However, family budget pressures are increasingly prompting consumers to start experimenting with lower-priced diapers." She explained that "inflationary pressures and consumer concerns are more acute in Europe due to higher levels of energy and food price increases."

Hanna said that the leaders in the diaper industry have reported a modest but modest increase in private label market share, while in Europe, private label market share has historically been higher than in the United States, and growth this year has also been slightly higher than in the United States.

Recently, Jagadev has encountered fierce competition from private label brands in the United States. "Gone are the days when private label brands were seen as a cheap alternative to leading brands. Nowadays, private label does not mean cheaper, they are just as innovative as high-end brands. Private labels are evolving, and in recent years, retailers have been re-branding by incorporating popular product features such as plant-based ingredients, biodegradable, sustainably sourced, baby-skin-like softness, as well as eye-catching packaging and targeted marketing. This further blurs the line between leading and private label brands."

Sima Delafraz, chief commercial officer of First Quality, a manufacturer of absorbent sanitary products, said it expects private label products to continue to grow significantly in the coming year. "In the current economic climate, more and more consumers are reconsidering their private label options," she said, "It's an opportunity for retailers to invest in their own diaper brands and take whatever it takes to build consumer loyalty. That means understanding consumers' lifestyles and preferences and providing personalized products and experiences to meet their needs."

Today, competition is no longer limited to Pampers, Curiosity and other top multinational brands and private brands. Over the past decade, the proliferation of new brands in the disposable baby diaper market has continued to change the category. By working with contract manufacturers, building an omnichannel strategy and leveraging social media, small independent brands like Honest, Hello Bello and Dyper have been able to make some impact in the market.

Ontex, an international supplier of personal care products, opened a new facility in North Carolina last summer, capitalzing on the growth of private and independent brands. The factory, which currently makes baby diapers for retailers and lifestyle brands, will eventually expand production and make other products as well. In fact, the company's strategy is to be the number one partner for co-brands (retailers, online lifestyle brands, and healthcare organizations).

According to Euromonitor data, the top two brands-Procter & Gamble and Kimberly-Clark account for most of the baby diapers market share, about 75-76%, while private brands account for 16-18%. According to preliminary data from Market Research 2022, "other companies" that accounted for 1-2% of the market five years ago now account for 3-4% of the market. "Other companies" include Hello Bello, Dyper, Kudos, First Quality, Bambo Nature, Rascal + Friends and other brands.

"Although these brands are considered 'other' brands, they have gained more market share from their own brands and leading domestic brands," Jagadev pointed out."

Smaller independent brands have a loyal following, and they buy primarily online, as well as some major brick-and-mortar retailers. Hanna added that while these independent brands tend to be expensive diapers, most of their consumers have middle-and high-income incomes and can afford higher prices, although current economic trends may slow their growth.

While these independent brands have yet to make a significant impact on market share in the category, they have influenced the way companies large and small design and market their products.

"Small independent brands like Honest and Hello Bello have long set benchmarks for other brands in terms of design and innovation," said Natalia Richer, consultant of diapers and absorbent sanitary products at Diaper Testing International. "When Honest was launched in 2012, it was the first brand of its kind to focus on the high-end market, high sustainability proposition, social media value model and customized products. As Honest and other brands paved the way for new high-end areas, they developed rapidly in a few years. It was not until 2019 that P & G responded to this new demand with its own high-end diaper series Pampers Pure."

Although small boutique brands such as Dyper and Coterie account for only a small part of the market, Richer says they are very aspirational brands that other industry players, including raw material suppliers and product developers, look to to determine the next step in innovation as they become more sensitive to new consumer demands.

innovative development

In recent years, innovation in the baby diaper market has focused on skin comfort, leak-proof and innovative core design, as well as promoting the use of more sustainable ingredients. Diaper industry experts say interest in pull-up pants is also growing.

From Richer's perspective, the biggest opportunities in the mature market include: increased sustainability, improved diaper replacement experience, and more close-fitting materials to facilitate use and prevent leakage. She said: "Before finding real diaper handling and recycling solutions, sustainability is now limited to small improvements in the supply chain, such as plastics from renewable materials, the addition of plant-based ingredients to the materials in the layers of diapers, and other improvements such as green energy." By "improving the experience of changing diapers," she meant improving the visual and tactile aspects of the product and perfecting the shopping and unpacking experience.

Diaper Testing International also found that the use of elastic materials in diaper design has increased, and compared with traditional diapers, the sales of pull-ups have also increased. "In mature markets, there is still an opportunity to steer consumers towards pull-ups," she added."

Euromonitor's Jagadev said that although pull-ups only account for a small part of the total diaper market sales, they are being accepted by more and more people and will account for nearly 70% of the total diaper sales in the next five years. "Despite the higher price, diapers in the form of pants are gaining more appeal. Parents will choose to go to the toilet earlier and seek better products to prevent bedwetting." She said, "Lash pants manufacturers have also increased their efforts to innovate to enhance fun, beauty and comfort."

In addition to people becoming more interested and active in baby diaper design, most of the key trends affecting design are related to efforts to make diapers more sustainable and/or free of substances that consumers are told to avoid.

First Quality recently responded to this trend. In July 2022, the company launched the "Earth Eden Sensitive" diaper, refocusing on safe and luxurious eco-friendly design.

"In the past decade, sustainability and ingredient transparency have become increasingly important for consumers." Delafraz said, "They want diapers to be not only better for the baby, but also better for the environment, and they are also becoming more and more picky about ingredients that they don't want to appear in diapers. This is why these diapers do not contain lotions, natural rubber latex, Fragrances and elemental chlorine bleach, and only use non-toxic water-based inks."

The highly absorbent core of Earth Eden Sensitive diapers is made of plant-based materials and uses only fluff pulp certified by the Sustainable Forestry Initiative. The diaper has a layer of cotton reinforcement, which is very soft and the ultimate comfort. It also features an improved waistline, which is more snug and easier to use. The breathable bottom layer and hypoallergenic top layer keep the baby's skin dry and help prevent rashes and irritation. The diapers are also certified by Skin Health Alliance, which proves that they have been independently tested for skin safety, efficacy and quality.

New life after use

Creating more sustainable post-use recycling solutions has been a focus for the diaper industry, and in recent years a number of companies have created practical solutions as an alternative to landfill.

Families and daycare centers around the world rely on the convenience and performance of disposable diapers. While striving to create a more sustainable product, recycling is the solution to the problem of disposable diaper waste.

Ontex Group NV continues to offer recyclable diapers in support of Woosh, a Belgian startup that aims to make diaper recycling a reality in Belgium. Ontex helped launch the startup and continues to support it with products and expertise as the company grows.

Woosh now provides recyclable disposable diapers and collects used diapers to more than 200 day care centers in Belgium, and plans to expand the service to more than 1000 day care centers by 2024. Woosh plans to build the first diaper recycling facility in Belgium together with the trash company.

Since 2021, Ontex has also been involved in a project to test industrial-scale composting of diapers in partnership with French circular economy company Les Alchimistes. The project provides Ontex with information on consumer preferences and behavior that can be used to further explore composting solutions.

In Australia, Kimberly-Clark announced a new diaper recycling trial, which may be Australia's solution to 1.5 billion diapers being thrown into landfills every year. The "Nappy Loop" project uses anaerobic digestion technology to convert organic materials from used curiosity diapers into nutrient-rich compost, while using bioenergy for recycling.

The Nappy Loop test sends used Curious diapers to a peat composting facility for disposal. Anaerobic digestion is used to convert the organic material in used diapers into nutrient-rich compost, while the plastic component is separated and evaluated as a future recycling product. In addition, the bioenergy produced by the anaerobic digestion process can be used to power a peat composting facility.

Meanwhile, in Japan, Daio Paper and Livedo Corporation are working together to develop recycling technology to reuse pulp and other materials to make new diapers. Pulp, plastics and superabsorbent polymers are separated through technology developed by Total Care Systems.

Daio has been working with Japanese recycling specialist Total Care since 2005, but an earlier approach used plastic and SAP waste to make fuel and pulp to make building materials. Daio Paper and Livedo are improving the process.

This article is from Nonwovens Industry Journal
Author: Tara Olivo

Source: Jung-International Nonwoven Industry Business