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Disposable Baby Products - US - March 2017

OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY
Market overview
Modest sales growth for 2017 driven by lower birthrates
Figure 1: Total US sales and fan chart forecast of disposable baby products, at current prices, 2011-21
The issues
Mainstream purchased more than natural brands, but not by much
Figure 2: Select disposable baby product purchases, December 2016
Some parents require certification before buying natural/organic brands
Figure 3: Select attitudes toward natural and organic disposable baby products, December 2016
The opportunities
Embrace the need for trial and error
Figure 4: Select purchase influencers for diapers, December 2016
Emphasize skin health benefits in baby personal care products
Figure 5: Select product attributes of baby personal care products, December 2016
Opportunity to grow sales by cross-promoting natural brands
Figure 6: Select attitudes toward natural and organic disposable baby products, December 2016
What it means
THE MARKET – WHAT YOU NEED TO KNOW
Industry experiences minimal gains in 2017 as birthrates stall
All segments see similar lackluster sales for 2017
Cross-purchasing and emerging legislation impact natural
Birthrates level off following 2014 increase
MARKET SIZE AND FORECAST
Figure 7: Total US sales and fan chart forecast of disposable baby products, at current prices, 2011-21
Figure 8: Total US retail sales and forecast of disposable baby products, at current prices, 2011-21
MARKET BREAKDOWN
Stalled birthrates challenge diaper and training pant sales
Baby wipes sales remain modest as consumers seek value
Parents may be saying “less is more” to baby personal care
Figure 9: Share of US retail sales of disposable baby products, by segment, at current prices, 2016
Figure 10: Total US retail sales and forecast of disposable baby products, by segment, at current prices, 2011-21
Other retailers see highest growth, driven by mass merchandisers
Figure 11: Total US retail sales of disposable baby products, by channel, at current prices, 2014 and 2016
MARKET PERSPECTIVE
Natural products intersection between parent and child
Popularity of do-it-yourself could impede growth for brands
Increasing regulation is impacting natural
Dads command attention from disposable baby brands
Figure 12: Johnson & Johnson Commercial, April 25, 2016
MARKET FACTORS 
Births remain flat after 2014’s surge
Figure 13: Number of births in the US, 2007-15
Birthrate by age of mother getting older
Figure 14: US birthrates, by age of mother, 2007, 2014 and 2015
Strong consumer confidence bodes well
Figure 15: Consumer sentiment index, January 2007-December 2016
Hispanic female population expected to see high growth
Figure 16: US female population by race and Hispanic origin, 2012-22
KEY PLAYERS – WHAT YOU NEED TO KNOW 
Kimberly-Clark performs best within struggling MULO environment
Natural, therapeutic brands appeal to parents
Mainstream wipe brands, select personal care struggle
New Baby Box, “smart” fabrics could impact industry
MANUFACTURER SALES OF DISPOSABLE BABY PRODUCTS
Kimberly-Clark experiencing most positive performance despite dips
Top shareholder P&G is pulled down by Luv’s
Private label faring slightly better than industry driven by wipes
Figure 17: MULO sales of disposable baby products, by leading companies, rolling 52 weeks 2016 and 2017
Honest Company appeals to natural shoppers
Figure 18: The Honest Company sales, 2015
WHAT’S WORKING?
Natural brands grow as parents value safety, gentleness on skin
Figure 19: Advertisement for the Honest Company, Nov. 4, 2016
Sensitivity concerns drive growth of therapeutic personal care brands
Figure 20: MULO sales of baby personal care products, by leading companies and brands, rolling 52 weeks 2016 and 2017
WHAT’S STRUGGLING?
Branded wipes lose out to natural
Figure 21: MULO sales of Huggies and P&G baby wipes, rolling 52 weeks 2016 and 2017
Luv’s struggles to connect with a target market
Lotions, shampoo, powder see declines as shoppers buy alternatives
Figure 22: MULO sales of baby personal care products, by segment, rolling 52 weeks 2016 and 2017
WHAT’S NEXT?
Baby boxes rolling out nationwide?
“Smart” fabrics could revolutionize diaper changes
THE CONSUMER – WHAT YOU NEED TO KNOW 
Baby wipes most common purchase, baby oil and powder among least
Mass merchandisers are the go-to shopping location
Skin health benefits matter most for baby personal care
Diaper purchases influenced by trial and error
Promotions, brand, efficacy influence wipe purchases
Safety, gentleness perceptions drive purchase of natural brands
DISPOSABLE BABY PRODUCT PURCHASES
Wipes most widely purchased amid multiple uses, lack of alternatives
Lotion and cream preferred over traditional baby products
Figure 23: Disposable baby product purchases, December 2016
Mainstream-only shoppers most prominent, but not by much
Figure 24: Correspondence analysis – Product purchases, December 2016
Correspondence methodology
New parents more likely to buy natural or organic
Figure 25: Disposable baby product purchases – Any natural or organic product usage (net), by parent experience, December 2016
Hispanics are heavier purchases of natural brands
Figure 26: Disposable baby product purchases – Any natural or organic product usage (net), by Hispanic origin, December 2016
PURCHASE LOCATIONS
Mass merchandisers most popular purchase location
Grocery stores and club offer convenience, low prices
Parents of young children appreciate online subscriptions
Figure 27: Purchase locations for disposable baby products, December 2016
Younger parents seek value
Figure 28: Select purchase locations for disposable baby products, by age, December 2016
New parents more likely to shop specialty baby stores
Figure 29: Purchase locations for disposable baby products, by parent experience, December 2016
Hispanics more likely to shop at club, baby-specific stores
Figure 30: Purchase locations for disposable baby products, by Hispanic origin, December 2016
IMPORTANT ATTRIBUTES FOR BABY PERSONAL CARE PRODUCTS
Skin health benefits are top priority for parents
Brand equates to trust
Pediatrician recommendation important for diaper cream
Figure 31: Product attributes of baby personal care products, December 2016
New parents are more influenced by recommendations
Figure 32: Influence of recommendations on baby personal care products, by parent experience, December 2016
Hispanic origin plays minimal role in attribute importance
Figure 33: Product attributes of select baby personal care products, by Hispanic origin, December 2016
DIAPER PURCHASE INFLUENCERS
Trial and error lead reason for diaper purchases
Brand symbolizes trust for some parents, but the landscape is changing
Figure 34: Purchase influencers for diapers, December 2016
New parents less likely to purchase based on experience
Figure 35: Purchase influencers for diapers, by parent experience, December 2016
Hispanics less reliant on trial and error
Figure 36: Purchase influencers for diapers, by Hispanic origin, December 2016
DISPOSABLE WIPES PURCHASE HABITS
Promotions influence stocking-up, brand switching…
…however wipes must still be effective
Figure 37: Disposable baby wipe purchase habits, December 2016
Discounts and coupons more appealing to younger parents
Figure 38: Select disposable baby wipe purchase habits, by age of parent, December 2016
ATTITUDES TOWARD NATURAL PRODUCTS
Safety, gentle on skin leads majority of parents to buy natural
One in five purchase more natural compared to year ago
Some require certification before buying natural or organic
Figure 39: Attitudes toward natural and organic disposable baby products, December 2016
New parents more likely to believe natural products work better
Figure 40: Select attitudes toward natural and organic disposable baby products, by parent experience, December 2016
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Fan chart forecast
Consumer survey data
Abbreviations and terms
Abbreviations
APPENDIX – MARKET 
Figure 41: Total US retail sales and forecast of disposable baby products, at inflation-adjusted prices, 2011-21
Figure 42: Total US retail sales of disposable baby products, by segment, at current prices, 2014 and 2016
Figure 43: Total US retail sales of disposable baby products, by channel, at current prices, 2014 and 2016
APPENDIX – KEY PLAYERS
Figure 44: MULO sales of disposable diapers/training pants by leading companies and brands, rolling 52 weeks 2016 and 2017
Figure 45: MULO sales of baby wipes/towelettes by leading companies and brands, rolling 52 weeks 2016 and 2017
Figure 46: MULO sales of baby personal care products, by leading companies and brands, rolling 52 weeks 2016 and 2017
APPENDIX – CONSUMER 
Figure 47: Median household income, by age of householder, 2015
Figure 48: Households with own children under age 18, by age of householder, 2016
Figure 49: Average household size, by race and Hispanic origin, 2016
Figure 50: Disposable baby brands Purchased, by consumers, December 2016
Figure 51: Baby oil and baby lotion brand usage, July 2015-August 2016
Figure 52: Brands of pre-moistened wipes/cloths for babies used in the household, July 2015-August 2016
Figure 53: Disposable diaper/training pant brand usage, July 2015-August 2016
Figure 54: Baby wash and baby bath product brand usage, July 2015-August 2016

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