Diapers | Encyclopedia.com (2024)

INDUSTRIAL CODES

NAICS: 32-2121 Paper (except Newsprint) Mills, 32-2291 Sanitary Paper Product Manufacturing

SIC: 2621 Pulp and Paper Mills and Manufacturers, 2676 Sanitary Paper Products

NAICS-Based Product Codes: 32-2121L through 32-2121L131 and 32-22913 through 32-22913131

PRODUCT OVERVIEW

Early diapers for infants were formed from animal skin and wool. For thousands of years people have dealt in various ways with baby urine and feces, some more successful than others. Swaddling clothes used to wrap young babies helped. Another solution was early toilet training.

Around 800 AD cotton was introduced in southern Europe. Its use spread slowly into Western Europe and North America. By the 1300s Mediterranean farmers cultivated cotton and shipped the fiber to the Netherlands for spinning and weaving into cloth. Textiles were valuable fibers that were re-used between generations of families. Cotton rags were used over and over again for baby urine and feces.

Innovations in the late 1700s such as the cotton gin and the water-powered spinning machine made manufactured cotton cloth more available. Even after its widespread use, cotton cloth for diapers had limitations. Problems included leaking, discomfort, and cleanup. Early diapers were fastened with pins that had no clasps to keep them from poking the delicate skin of infants. The modern pin with the safety clasp was invented in 1849. Cotton diapers held in place with diaper pins were de rigueur from the 1850s until the 1950s, when the consumer market began to grow after World War II.

Disposable diapers were developed simultaneously in Europe and the United States during the decades of the 1930s through the early 1950s. Entrepreneurs worked to overcome the limitations of the cotton diaper held in place with diaper pins. A Swedish firm developed a 2-piece diaper: a disposable wad of shredded paper pulp covered with gauze was inserted into reusable plastic pants. In the 1940s an American housewife and a British mother each developed 2-piece models. In 1949 Johnson & Johnson introduced CHUX disposable diaper. It was a 1-piece product with shredded paper wadding between a plastic back and a tissue lining. In 1950 the Swedes introduced rolls of shredded paper wadding covered with mesh that could be cut and fit into reusable plastic pants.

During the 1950s and the 1960s, disposable diapers were primarily 2-piece products that depended on reusable plastic pants. They were manufactured by various makers in France, Germany, Belgium, and Italy in Western Europe and, in North America, by Scott Paper and International Paper. Disposable diapers were a premium product intended for niche markets due to their expense relative to cotton diapers. Cotton continued to prevail.

Procter & Gamble developed its Pampers disposable diaper after it acquired Charmin Paper Company and began research into new products that used the tissue paper Charmin made at its Wisconsin paper mill.

Procter & Gamble test launched Pampers in Peoria, Illinois, in 1961. The test diaper was a rectangle. In be-tween its plastic backing and rayon lining were multiple layers of tissue paper. The diaper was held in place with diaper pins. It featured what was known as a Z fold; inner edges were pleated to provide better fit around upper legs. In 1968 Kimberly-Clark acquired Kimbies, a 1-piece disposable diaper with fluff pulp superior to both the paper wadding in CHUX and the tissue paper in Pampers. In 1969 Procter & Gamble rolled out Pampers nationwide with a heavy advertising campaign.

During the 1960s, two inventions emerged—super absorbent polymers and nonwoven fabric—that eventually contributed to the creation of the modern diaper. Superabsorbent polymers were developed simultaneously at Dow Chemical and Johnson & Johnson.

Superabsorbent polymers are pepper-like flakes that absorb up to 300 times their weight in liquid. When superabsorbent polymers became widely available in the 1980s, they replaced shredded paper wadding.

Nonwoven material was first used by a Swedish company in a rectangular diaper pad. When nonwovens became widely available in the 1990s, they were incorporated into the diaper manufacturing process. Together these two inventions reduced manufacturing costs and helped create an industry-wide dynamic of producing improved products over many decades with few price increases.

By the mid-1970s Johnson & Johnson, Kimberly-Clark, and Procter & Gamble each had 1-piece disposable diapers in the national market. The 1-piece dislodged the 2-piece model and the private label market developed. In 1972 Procter & Gamble upgraded Pampers, adding adhesive tape to replace safety pins and switching from multiple layers of tissue paper to fluff pulp. Scott Paper test marketed gender-specific Raggedy Ann and Andy diapers, but quickly withdrew from the market to focus on private label diapers. In 1973 Procter & Gamble introduced Pampers to Western Europe.

In 1976 Procter & Gamble test marketed Luvs as an affordable brand. Its improvements included a fitted shape, elastic leg openings to help prevent leaks, and improved fastening tape. In 1978 Kimberly-Clark replaced Kimbies with its Huggies brand. Huggies also had a fitted shape and elastic leg cuffs. During the late 1970s to make more absorbent diapers, manufacturers began adding more fluff pulp to diapers. By the early 1980s disposable diapers were bulky, thick, and wide in the crotch.

During the late 1970s and early 1980s, Western European and North American consumers began to substitute disposable diapers for cotton diapers. Consumers switched because the advantage (ease of use) overwhelmed the disadvantage (higher cost).

Due in part to the freedoms associated with the late 1960s, disposable diapers were valued because they liberated parents from time consuming diaper chores of soaking, rinsing, washing, drying, and folding.

Disposable diapers are one of the six innovations that contributed to the liberation of women, according to the European Disposables and Nonwovens Association. Disposable diapers are listed along with voting, driving, equal pay, maternity leave, and the birth control pill as factors that contributed to female freedom.

In the 1980s advances in polymers made possible important improvements in disposable diaper design and performance. Johnson & Johnson stopped marketing disposable diapers under its own brand names in 1981 and refocused its manufacturing toward production of private label diapers, just as Scott Paper had earlier. In 1984 diaper makers exploited superabsorbent polymers. In 1985 resealable tape was used for the first time. Within one year, Kimberly-Clark's Huggies and Procter & Gamble's Pampers each reduced bulk by 50 percent by using superabsorbent polymers. The original bulky shredded paper diaper held 275 milliliters of liquid, or one cup. A diaper made with superabsorbent polymer held 500 milliliters, almost twice as much fluid. Another benefit of superabsorbent polymers is that they do not easily release the absorbed fluids under pressure of a toddler's bottom. Improved products were introduced to consumers without cost increases.

During the 1990s both of the top manufacturers of disposable diapers once again exploited the benefits of superabsorbent polymers to introduce ultra-thin models that were a further 30 percent thinner. Velcro fasteners replaced resealable tape. Nonwoven fabrics were exploited to create cloth-like backings that were better than plastic. New models featured waste dam leakage barriers and stretch breathable side panels. Private label brands grew as they incorporated many of these innovations. They helped hold prices down. Diapers got thinner yet better while costs stayed low. The once niche product was accessible even to low income consumers.

MARKET

Disposable diapers are part of the larger sanitary paper products industry. According to data gathered and published by the U.S. Census Bureau in its Annual Survey of Manufactures, this industry as a whole had shipments of $8.5 billion in 2005, down from a level of $9.5 billion in 2002. During the period 1997 to 2002 industry shipments for the sanitary paper products manufacturing industry grew at an annual pace of 3.7 percent, from $7.8 to $9.5 billion. In the years since the 2002 Economic Census, shipments declined by $1 billion.

In order to analyze the disposable diaper portion of this larger industry, one is limited to data that are published in the U.S. Economic Census years because it is only in these years that data at the product level are gathered. In 2002 disposable diapers—a Census Bureau category which includes not only children's diapers but feminine hygiene and adult incontinence products as well—made up 53.4 percent of the sanitary paper product manufacturing industry in the United States. The slight increase in the number of children aged three years and under in the United States after 2002 gives reason to believe that shipments of disposable diaper likely grew in this period as well. Figure 80 shows the growth in population aged three years or younger for the period 2000 through 2005.

In 2005 an estimated $8 billion worth of children's disposable diapers were sold in the United States, at the retail level, according to a report from Freedonia Group, a Cleveland, Ohio, market research firm. Freedonia predicted that U.S. disposable diaper sales would increase at an annual pace of 1.4 percent through 2010 to become a $9.1 billion year retail market.

Freedonia's predictions may not pan out. Supermarket News reported that disposable diaper sales declined nearly 6 percent to $943 million in food stores for the 52 weeks ending February 19, 2006. Figures were based on data provided by Information Resources, Inc., that do not include Wal-Mart, club, or dollar stores. Supermarket News tallied the top disposable diaper brands to emphasize that private label brands hold the number three position in food stores. The top three disposable diaper brands were Huggies ($198 million), Pampers Baby-Dry ($167 million), and private label ($147 million).

The emergence of the national premium market controlled by Kimberly-Clark with Huggies and Procter & Gamble with Pampers created a private label market characterized by value-priced products. Competitive pressures between the two markets keep prices low. Between 1997 and 2004, according to European Disposable and Nonwovens Association (EDANA), real prices of disposable diapers in Europe declined by 20 percent. According to Nonwovens Industry, in 1990 the U.S. price of a standard disposable diaper was 22 cents. Almost 15 years later, even with countless improvements, a standard disposable diaper was approximately the same price.

Parents can save $200 per year in diaper costs if they switch to private label brands, according to Consumer Reports. The best private label brands cost approximatley 20 cents per diaper. The national premium brands cost approximately 30 cents per diaper. Of the 12 disposable diapers Consumer Reports ranked, the top five were premium products. The remaining seven were private label brands from stores like A&P, Albertson's, Kmart, Kroger, Target, and Wal-Mart. Private label brands cost approximately 30 percent less than premium brands. Consumer Reports' ranking of the top ten brands, with cost per diaper in 2004, reads as follows:

Pampers Custom Fit Cruisers ($0.30 per diaper)
Huggies Supreme ($0.32 per diaper)
Pampers Baby-Dry ($0.28 per diaper)
Huggies Ultratrim ($0.29 per diaper)
Luvs Ultra Leakquards ($0.23 per diaper)
Baby Basics Ultra Leakage Protection (Albertson's) (costs $0.21 per diaper)
America's Choice Ultra Thin Stretch (A&P) (costs $0.22 per diaper)
Ultra Comforts (Kroger) ($0.21 per diaper)
White Cloud (Wal-Mart) ($0.21 per diaper)
Simply Dry (Stop & Shop) ($0.19 per diaper)

Tension between the premium and value market segments was exhibited during the summer of 2005. Kimberly-Clark raised diaper prices 4.6 percent to match a Procter & Gamble price increase and to respond to a 7 percent increase taken in January 2005 by private label manufacturers. By December 2005 Procter & Gamble rolled back its price increase. The December 2005 price rollback was 2.8 percent on Pampers and 3.8 percent on Luvs. Procter & Gamble kept plans to raise prices within its super premium Pampers Baby Stages of Development line by 5.4 percent in April 2006. This move formalized the existence of a new three-tiered market consisting of premium and value market segments, complemented by a super premium segment where higher prices are more acceptable.

Nonwovens Industry remarked in December 2005 that low prices in the diaper market are due in part to the dominance of Wal-Mart and other big box mass retailers. They demand low prices and, considering Wal-Mart is responsible for approximately 60 percent of U.S. diaper sales, diaper manufacturers must meet demands. For instance, big box retailer Costco stopped carrying Procter & Gamble's Pampers Baby Stages of Development line at the majority of its stores during the summer of 2005. Rivals Kimberly-Clark and private label brands replaced the super premium line.

Disposable diapers are classic nondurable consumer goods. Nondurable goods are purchased for immediate or almost immediate consumption and have a life span ranging from minutes to three years. Nondurable goods are destroyed by their use so consumers need to repeatedly replenish their supply throughout the year. For instance, the average U.S. baby uses approximately 4,000 diapers prior to toilet training. Newborn babies may use 12 diapers per day or 84 per week for the first few months. Of course, toddlers use fewer diapers than newborns, perhaps six per day, or 42 per week. Babies in between the two extremes of newborn and toddler probably use 60 diapers per week. The average U.S. baby wears diapers until age three. Parents spend between $1,500 and $2,500 on diapers. Depending on baby's developmental stage, parents spend $50 to $70 per month.

KEY PRODUCERS/MANUFACTURERS

The top two North American manufacturers of disposable diapers consistently controlled 85 percent of the market during the first years of the twenty-first century. According to Market Share Reporter 2007, the Kimberly-Clark and Procter & Gamble split was 49 percent to 35 percent, in favor of Procter & Gamble, for the year ending June 2005.

Kimberly-Clark took the lead in 2006. The gap between the two key producers narrowed to one percent. Kimberly-Clark controlled 43 percent to Procter & Gamble's 42 percent. Whatever the split is from one week to another, the one thing which held firm during the early 2000s was the fact that between then, the two leaders controlled 85 percent of the market.

Irving Personal Care

This company is a relatively recent entrant into sanitary products manufacturing. It is a part of the J.D. Irving Ltd. family of companies based in Dieppe, Canada, which owns lumber and paper businesses and employs around 8,400 in North America.

Irving Personal Care began in 1988 with the purchase of a paper mill in New Brunswick, Canada. In 1990 it constructed a second plant there to produce private label products. Due to the intervention of the U.S. Department of Justice (DOJ)—which required Kimberly-Clark to divest its Scotties brand when it acquired Scott Paper Company in 1996—Irving acquired a paper plant in Fort Edward, New York. The DOJ decision was based upon the recognition that entry into the sanitary products market is difficult, requiring a significant investment in plant equipment and brand building, and that a new entrant was necessary to restore the competition lost when Kimberly-Clark and Scott Paper merged.

In 2001 Irving acquired a fourth mill in Toronto, Canada. After spending $19 million in 2003 to add a production line to its New York plant, Irving announced the first major new brand entry into the disposable diaper market in 25 years. Irving's Little Tikes branded premium disposable diapers rolled out to 1,000 U.S. locations in late 2005 and to 1,900 Eckerd and Brooks drugstores in early 2006.

Procter & Gamble (P&G)

Established in 1837, Cincinnati-based Procter & Gamble has been a leader in the disposable diaper market since it introduced Pampers in 1961. P&G is a behemoth in consumer goods. It markets its nearly 300 brands in more than 160 countries.

Procter & Gamble launched its super premium Baby Stages of Development line in 2002. In 2006 P&G improved the line's absorbency and told investors the line represents more than half of Pamper's U.S. sales. The line includes Pampers Swaddlers for newborns and Custom-Fit Cruisers for crawlers. Pampers Baby-Dry diapers have koala fit grips, Sesame Street designs, a breathable cloth-like cover, and a bigger waistband with wider grips to make fastening easier.

In 2005 Pampers Active Fit was voted Product of the Year for Baby Care and revolutionized the sector by increasing elasticity at the sides and making the waistband 20 percent wider at the front. Advertising Age reported that as of August 2006, Procter & Gamble's most recent innovation to its basic Pampers Baby-Dry line was Caterpillar Flex, offering better fit, fastening, and flexibility. Procter & Gamble also improved leakage protection for its value-priced Luvs brand, billed as more leak-proof than the higher-priced Huggies products.

Kimberly-Clark

Established in 1872 in Neenah, Wisconsin, and headquartered in Dallas, Texas, Kimberly-Clark employed more than 55,000 people in 37 countries in 2006. Kimberly-Clark markets its many products in more than 150 countries. The personal care giant entered the disposable diapers sector in 1968 through the acquisition of Kimbies. It launched Huggies in 1978 to replace Kimbies.

Huggies Supreme was launched in 1994, creating the super premium segment. Huggies Supreme was named America's favorite diaper by American Baby in 2005. Kimberly-Clark introduced Huggies Supreme Gentle Care and Huggies Supreme Natural Fit diapers to replace Huggies Supreme during the fall of 2006. Supreme Gentle Care diapers are for the youngest disposable diaper wearers. They feature a cottony nonwoven liner called Cuddleweave that is extra gentle for younger babies and features better umbilical-cord cutouts for newborns. Supreme Natural Fit diapers are for older disposable diaper wearers. They feature an even thinner (10%) and more flexible hourglass shape called Hugflex with flexible sides that stretch to increase baby's mobility. Improved printing technology gives the diapers contemporary graphics for a more underwear-like look. The 2006 rollout was Kimberly-Clark's biggest launch in 12 years, since its 1994 introduction of Huggies Supreme.

Private Label Brands

Top rated private label brands are Baby Basics Ultra Leakage Protection (Albertson's), America's Choice Ultra Thin Stretch (A&P), and Ultra Comforts (Kroger), according to Consumer Reports. Associated Hygienic Products manufactures private label disposable diapers including Ultra Comforts for Kroger.

In 2004 Kroger recognized Associated Hygienic Products as one of its outstanding corporate brand vendors of the year. In 2005 Associated Hygienic Products launched Accordion-Stretch on its private label diapers for more stretch and better fit. Associated Hygienic's private label products feature its patented dry-lock acquisition layer, uni-cuff leak barriers, and wide-stretch fastening system.

Tyco Healthcare manufacturers Wal-Mart's White Cloud private label brand of diapers. Baby Time diapers (Wegmans) feature a Baby Snoopy design and a flex-fit system touted as wider and more flexible to move with baby to prevent leakage. Cuddle Ups (Brookshire) features the usual superabsorbent polymers, enhanced elastic leg gathers, and stronger fasteners, but is priced 15 percent less than Huggies and Pampers.

MATERIALS & SUPPLY CHAIN LOGISTICS

Modern diapers are layered to redistribute urine from a soft nonwoven fiber liner to an absorbent core of fluff pulp and superabsorbent polymers protected by a plastic back. In many brands of diapers the leak-proof poly film plastic back has been replaced by a nonwoven and film composite.

According to EDANA, the average baby diaper is comprised of 43 percent fluff pulp, 27 percent superab-sorbent polymer, 22 percent polypropylene/ethylene, 3 percent adhesives, and 1 percent elastics.

Fluff pulp is essential. Its availability influences diaper manufacturing costs. Leading suppliers Rayonier, Koch Cellulose (Georgia-Pacific), and Buckeye Technologies rely on long-term relationships with makers in order to achieve economies of scale. Superabsorbent polymer is also essential. The bulk of global superabsorbent polymer production is swallowed up by the sanitary products manufacturing industry, ICIS Chemical Business Americas reported in February 2007. The use of elastics has increased as manufacturers honed fit. Once found only in the leg cuff, elasticized material is now found throughout the diaper in waistbands, on side panels, and in closure systems. For example, Pampers Baby Fresh was launched in July 2006 with highly elastic fasteners, known in the industry as ears.

Improving quality while keeping manufacturing costs low has been the paradoxical challenge of disposable diaper manufacturers for almost five decades. Intense competition, pricing pressures, and market maturity create an unwillingness among producers to increase prices. The Census Bureau reported that in 2002 the sanitary paper products manufacturing industry used $3.1 billion worth of materials to produce $8.6 billion worth of products. The value of materials used remained static between 1997 and 2002, hovering right around $3.1 billion. During the same period, product shipments grew 15 percent from $6.5 billion to $8.6 billion.

The main types of materials used to produce diapers and other sanitary paper products are paper, wood-pulp (also known as fluff pulp), and nonwoven fabrics. Industry-wide spending for paper decreased 12 percent between 1997 and 2002, from $779 million to $689 million. Industry-wide spending for woodpulp increased between 1997 and 2002, from $195 million to $503 million, an increase of 158 percent. Industry-wide spending for nonwoven fabrics decreased 43 percent between 1997 and 2002, from $472 million to $271 million.

In January 2007 Nonwovens Industry shed some light on the disposable diaper industry's unique ability to grow by 15 percent and continually introduce improved products, while keeping cost expenditures on the raw materials consumed in production at a static level. Because the absorbent core is the most expensive part of the disposable diaper, makers adjust the ratio of woodpulp to superabsor-bent polymers to improve absorbency while saving costs.

Other cost savings that emerged as part of the challenge to make diapers better yet cheaper has been to reduce the amount of materials. For example, fitted hourglass shaped diapers use less materials, especially less nonwoven fabrics. Cost savings related to nonwoven fabrics can be further explained by trends away from poly-laminated backings. Also, more companies buy poly films and nonwovens separately and put them together during diaper production. Kimberly-Clark in Neenah, Wisconsin, makes all the Huggies in the Midwest. It also makes its own nonwoven fabrics.

After using paper, woodpulp, and nonwoven fabrics to make diapers, manufacturers use packaging materials to prepare cartons of disposable diapers for shipment through the distribution channel. U.S. industry-wide spending for packing material was around $400 million in 2002. The types of packaging products used (in order of expenditures) were paperboard containers, boxes, and corrugated paperboard; packaging paper and plastics film; and glues and adhesives.

DISTRIBUTION CHANNEL

Disposable diapers are distributed in corrugated paper-board boxes that contain packages of diapers wrapped in plastics film. Disposable diapers are available at a throng of outlets including:

Drugs stores such as Brooks, CVS, Eckerd, Rite Aid, and Walgreens
Food stores including A&P, Albertsons, Brookshire, Kroger, and Wegmens
Health food stores including Whole Foods
Convenience stores like 7-11 and Tom Thumb
Gas stations such as Holiday and Super America
Mass merchandisers including Kmart, Target, and Wal-Mart
Nontraditional retailers and warehouse club stores like Costco and Sam's
E-commerce Web sites that offer online shopping for diapers

Within these various distribution channels, the national premium disposable diaper brands are sometimes sold as loss leaders. Retailers do so because of the financial importance of diaper buyers, who buy more on average than other shoppers. Diaper shoppers can be counted on to need lots of other items, so stores lure them with price reductions.

Within the category, private label brands are used to grow margins, which can be near zero. For instance, the Cuddle Ups line covers 13 stock keeping units including convenient, jumbo, and mega packs, and provides an example of why these private label brands are important to the channel. Cuddle Ups are profitable. Its margins are 15 to 20 percent. Cuddle Ups' margins reflect the critical role of private label brands in the distribution channel. Because national brand margins are low, retailers need the higher margins on private label brands to maintain gross-margin integrity within the disposable diaper category.

Within the distribution channel, disposable diapers are promoted in hospitals. The use of in-hospital promotions is an important tool in reaching moms early in their diaper decision making process. Procter & Gamble has long dominated the in-hospital sampling distribution channel.

The disposable diaper distribution channel involves advertising on an in-hospital network known as The Newborn Channel. It provides educational programming in 1,840 hospitals' maternity wards, reaching around 3.4 million new mothers in the United States each year. An estimated 82 percent of new mothers are exposed to the Newborn Channel. The network is jointly operated by NBC Universal, iVillage, and GE Healthcare. On the network, Kimberly-Clark had category exclusivity for its Huggies Supreme 2006 launch.

Within the distribution channel, size matters. The old disposable diapers filled with paper created a transportation problem. By trimming the size of a diaper by more than half, more diapers fit on a truck. Diaper manufacturers and distributors were able to cut transportation expenses that contributed to keeping costs low for consumers.

Size also effects the way diapers are sold. They take up a lot of space, comprising one of the largest product categories in food, drug, and discount stores. Store shelves are divided into increments of four feet, so diapers, for example, might be presented as a 20-foot set. Bulky diaper packages of the 1980s took up much of that length, contributing to high out-of-stock rates. For a fast-moving, bulky item like diapers, restocking problems prevailed. By making smaller diapers and by extension smaller packages, diaper makers insured their products would be on the shelves a greater percent of the time.

KEY USERS

The range of key users covers the single parent, the working parent, the cost conscious parent, and the parents of multiple children. Key users are parents of young children and child care providers. The key user of disposable diapers can be characterized as a shopper in a hurry. The harried consumer may value one-stop-shopping in a superstore where she can get everything she needs. Alternately, she may value a small local store where she can get in, get the diapers, and get out. The vast majority of parents choose disposable diapers over cloth diapers, although reliable figures as to what percentage that is are not available.

An estimated 10 percent of households experiment with cloth diapers. An active Internet community supports parents who choose cloth diapers. Useful Web sites are BorntoLove.com with information on laundering, costs, and suppliers and DiaperPin.com which sponsors a parent forum.

ADJACENT MARKETS

The most obvious product adjacent to disposable diapers is cloth diapers and diaper services which deliver the same to parents. This market is very small, only a fraction of the total U.S. linen laundering market. According to the Census Bureau, the linen laundering service industry had receipts of $3.5 billion in 2002. Most of these receipts were for services provided to restaurants, hotels, hospitals, and institutions that provide uniforms for their workforce.

Other products whose markets are adjacent to the market for disposable diapers include baby wipes, bibs, formula, food, and toys such as rattles. Diaper bags too can be considered adjacent to disposable diapers. They are needed to carry not only diapers, but wipes, bottles, snacks, and toys. One househusband was quoted in an Nonwoven Industries article saying, "I do not want to carry a girly diaper bag. I want something cool and funky."

Baby and toddler toiletries are a growing adjacent market. They are typically differentiated through ergonomically designed packaging. They are an important adjacent market for the top two key producers.

Kimberly-Clark forayed into baby toiletries in 2004 when it extended its Huggies brand into the baby bath and body market. Leading its array of toiletries is Huggies Liquid Powder. It goes on as a liquid and dries to a powder. The Huggies bath and body line comprises more than 20 stock keeping units including shampoo, baby lotion, diaper rash cream, disposable wash mitts, and variations of Kimberly-Clark's established baby wipes. New Huggies products include a proprietary shea butter moisturizing formula in baby lotion and baby wash and extra thick and soft disposable washcloths and toddler mitts using proprietary nonwoven fabric.

Procter & Gamble expanded into toddler toiletries in 2005 with its Pampers Kandoo Toddler Care line. Pampers Kandoo Flushable Wipes are sold in a colored, easy-to-open, pop-up tub that dispenses one wipe at a time. Lightly moistened for gentle, easy cleaning, they are made to fit small hands and come in two scents: fresh splash and jungle fruits. Pampers Kandoo Foaming Handsoap, also in fresh splash and jungle fruits, has a wide pump top easy for little hands to press. Procter & Gamble's established Pampers Baby Wipes in a pop-up tub are available in lavender, scented natural aloe, unscented natural aloe, and sensitive chamomile. Its Pampers Sensitive Wipes target newborns with sensitive skin.

RESEARCH & DEVELOPMENT

Early research and development resulted in a changed disposable diaper. The form of the product changed through the incorporation of superabsorbents to make products thinner, and the use of nonwovens instead of plastic backings to make products softer. Later research and development decreased manufacturers' reliance on superabsorbent polymers, since supply is tight with the bulk of production swallowed up by the sanitary products industry.

Superabsorbent polymers producer Tredegar's makes products called AquiDry, AquiDry Lite, and AquiSoft that help makers reduce superabsorbent polymer use by as much as 25 percent without compromising performance. Superabsorbent producer Lysac Technologies introduced Actofil for baby diapers. It enhances the diffusion of superabsorbents in diapers so manufacturers can reduce superabsorbent polymer use by up to 20 percent.

Recent research and development decreased manufacturers' consumption of polyethylene plastic resin. Thinner-gauge nonwovens have reduced costs for manufacturers. Chemistry and Industry September 2006 reported that research at Kimberly-Clark resulted in biodegradable but breathable poly film. It is a mix of a biodegradable polyester with a calcium carbonate (clay) filler. The compound produces a film thinner than a human hair that is waterproof, breathable, and biodegradable when composted.

The latest research and development resulted in treated diaper liners, known as rash guards or skin wellness liners, that further protect baby's bottom from urine and feces. Typical treatments are a three part combination of emollients, viscosity enhancers, and botanical active ingre-dients. Emollients and viscosity enhancers can be mixtures of petrolatum, vegetable-based oils, mineral oils, lanolin, glycerol esters, alkoxylated carboxylic acids, alkoxylated alcohols, and fatty alcohols. Botanical active ingredients include aloe, echinacea, willow herb, and chamomile, green, black, oolong, and Chinese teas.

CURRENT TRENDS

Successful innovations that started as trends include absorbent cores, elastic leg bands, superabsorbent polymers, resealable tape fasteners, elastic waistbands, Velcro fasteners, breathable backing from nonwoven fibers, graphic designs, and newborn diapers notched for the umbilical cord. Children may be less fussy because they are more comfortable with a diaper that does not sag, drip, or fits poorly with pins at the hips.

Disposable diaper innovations have been so successful, in fact, that parents keep children in disposable diapers until they are approximately three years old on average. In the past century, the average age of toilet training crept up from 1.5 years to sometimes even beyond the age of three. This change is attributed to the ease of using disposable diapers.

The current trend—common in a mature industry like disposable diapers—is to expand the range of product sizes and types. In the early days of the industry, disposable diapers were sold as either small, medium, or large sizes. Most of the innovations focused on technical and functional issues related to absorbency. The expanded range of sizes and types is a more consumer-relevant focus on baby development. Makers link new introductions to the disposable diaper wearers' developmental stages. The expanded range of shapes and features are focused for newborn babies, crawlers, toddlers, walkers, and toilet trainers. Different versions correspond not only to the wearers' size and weight, but to their developmental stage, frequency of urination or bowel movement, and where the child is with controlling those functions.

A secondary trend is disposable diapers that allege an ecologically sound alternative to the major national brands. The Environmental Protection Agency estimates that yearly more than 3 million tons of disposable diapers arrive in landfills in America. Seventh Generation and gDiapers are part of the reason the disposable diaper category is one of the fastest-growing sectors in the natural products arena.

Seventh Generation, based in Burlington, Vermont, got into disposable diapers in 2004. Since then, its category involvement has grown over 300 percent. Seventh Generation's selling point is that its diapers are 100 percent chlorine-free. Seventh Generation's chlorine-free diapers have a brownish tint, different from the blindingly white premium national brands.

gDiapers, based in Portland, Oregon, sells a flushable and compostable 2-piece disposal diaper. gDiapers include a washable, reusable outer pant and a flushable liner made of biodegradable, all-natural fiber. The interior uses elemental, chlorine-free, tree-farmed fluff pulp, and tiny sodium polyacrylate crystals to absorb wetness.

TARGET MARKETS & SEGMENTATION

Three disposable diaper segments emerged due in large part to the industry's tendency toward continuous product improvements. Coexisting segments are value, premium, and super premium.

The value segment incorporates many of the innovations that emerged first in the national premium brands. The value segment targets the price-conscious consumer. Value-priced private label disposable diapers cost 15 to 20 percent less than premium diapers.

The premium segment is controlled by the top two manufacturers. Prices are low in the premium segment, due to tension between it and the value segment. Makers target the super premium purchaser, and niche markets like disposable training pants and disposable swimming pants. Training pants are estimated to cost $0.80 each. Swimming pants are estimated at $0.85 each.

The main strategy for growth in a mature U.S. market where the population of babies is growing only approximately 1 percent annually and price increases are hard to come by has been to introduce super premium products. Kimberly-Clark and Procter & Gamble one-up each other with a better diaper and try to persuade consumers to trade up from the base Huggies UltraTrim or Pampers.

Super premium products can be characterized by higher absorbency such as extra capacity for nighttime use, skin-care benefits such as rash guards and skin well-ness liners, and superior fit specially designed for crawlers or toddlers. Pampers, for example, markets Cruisers for walkers with super stretchy leg cuffs and sides to better prevent leaks as the child moves around. However, these improvements make a soiled diaper more comfortable for the infant or child, which may result in fewer diaper changes each day.

Known for offering solid performance and enhanced fit, super premium is the one segment where margins are still high. For instance, the Huggies Supreme Gentle Care and Huggies Supreme Natural Fit introduced in fall of 2006 cost 14 to 20 percent more than the premium Huggies brand, according to an August 2006 article on the battle for the bottom line in Advertising Age. Super premium—also known as top tier supreme—is where most of the category growth is, accounting for half of the $4 billion North American disposable diaper business.

The secondary strategy for growth in a mature U.S. market where consumption of disposable baby diapers is threatened by a decreasing birth rate is to target niche markets. Kimberly-Clark and Procter & Gamble each have disposable training pants and swimming pants.

In 1989 Kimberly-Clark introduced Huggies Pull Ups training pants with gender-specific models, the first ever disposable training pant to facilitate toilet training. In 2003 Kimberly-Clark launched Huggies Convertibles, which could be either pulled up like training pants or put on like a diaper. This dual functionality solved one of the problems that parents had with Pull Ups, namely the need to remove a toddlers pants and shoes in order to change them.

Other diaper manufacturers offer disposable training pants, but Kimberly-Clark holds the market lead. For instance, in 2003, Procter & Gamble's introduction of Easy Ups training pants gave Pampers a 19.5 percent share of the training pants segment, where it had previously not competed.

In 2006 Nonwovens Industry reported that Procter & Gamble launched a new Pampers swim pant and incorporated specialized absorbency for boys and girls on its Easy Ups training pants. Irving Personal Care Little Tikes entered the training pants category in 2006 with the debut of Snug'n Snoozzz Overnight Training Pants.

Kimberly-Clark targets this segment that can be counted to spend almost $1,000 per year on PBS Kids Sprout, a 24-hour preschool network and Web site. A for-profit channel created by Comcast Corp. and PBS, Kids Sprout programming includes Sesame Street, Bob the Builder, Barney & Friends, and Teletubbies. The video-on-demand element allows Kimberly-Clark to use vignettes to drive moms and moms-to-be to its Huggies Baby Network, Pull-Ups.com, and two new Web sites called Huggies Happy, Healthy Pregnancy and Huggies Happy Baby.

RELATED ASSOCIATIONS & ORGANIZATIONS

Absorbent Hygiene Products Manufacturers Association (AHPMA), http://www.ahpma.co.uk

European Disposables and Nonwovens Association (EDANA), http://www.edana.org/index

Real Diaper Association, http://www.realdiaperassociation.org/clothdiapering_inthenews.php

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