Having achieved numerous innovations over the years and with many new developments in the pipeline, baby diapers have been deemed by many manufacturers as one of the most competitive markets out there today—and with good reason. Diaper technology has evolved rapidly in recent years in terms of materials used, design and size. It seems that everywhere you look diapers are offering more or promising better absorbency or super softness, and manufacturers are always working to find ways to make them softer, thinner, more absorbent and more elastic and with a better fit on the baby. Whether a diaper is being made ultrathin or with new designs on the outer surface, baby diapers have definitely seen it all.

By and large, today’s baby diaper market is dominated by two giants, Procter & Gamble, Cincinnati, OH, and Kimberly-Clark, Dallas, TX. Products from these two companies are displayed on nearly every store shelf. In addition to P&G and K-C, many private label diaper manufacturers also exist in the diaper market, supplying to smaller companies who need a product to go with a brand name. As a result, many of these private label companies have struggled to get their products onto store shelves.

Diaper market competition leaves many manufacturers wondering if diapers have reached their peak in production. For instance, is it possible that diapers still can become even thinner than they already are? Can diapers still have more designs added onto them? How many more features can be added to a diaper, while still keeping down costs and offering even better protection and comfort? And, with all these possible changes, how will smaller diaper manufacturers fit into the picture?

While some manufacturers have doubts about how many new features can still be added onto diapers, some believe that diapers have not reached their highest standards yet. One such manufacturer is Victor Braha, president of private label diaper manufacturer, Bentley Manufacturing, New York, NY. He attributes diapers not reaching their peak primarily to the diaper not being used to its full potential.

“Diapers can still get better,” Mr. Braha said. “They can still have increased absorbency levels and materials can still be added, such as the airlaid core. The construction of the diaper can also still be improved. When a diaper is soiled, many parts of the diaper still go un-used. Right now 100% of the diaper core is not being used.”

The Debate With Airlaid
One of the biggest questions permeating the diaper industry is the possibility of switching to an airlaid diaper core. Although a diaper with an airlaid core is not currently produced by any major manufacturer, the large quantities of airlaid material that have recently come onstream make such a switch seem inevitable. Since this new feature is still at the drawing board stage, it is hard to predict what effect it will have on the diaper market. Although some manufacturers have a few ideas of their own; some think the airlaid core is a necessity for the diaper market, while others feel the airlaid core really isn’t all it’s cracked up to be, especially when considering the huge investment needed for manufacturers to convert the production lines to handle such a change.

“The airlaid core is an overkill. It would make a diaper become over-designed,” said Jack Braha, vice president of Braco Manufacturing, South Plainfield, NJ. Mr. Braha used an analogy comparing the diaper core to an expensive car, noting that the airlaid diaper core will be more like an unused luxury. “Auto manufacturers will always produce high end, expensive cars that are available with extremely high speeds, but chances are noone will really use the high speeds offered,” explained Braco’s Mr. Braha.

Another company skeptical about the necessity of an airlaid core is private label manufacturer Paul Hartmann, AG, Heidenheim, Germany. Company spokesperson Margarete Kraemer offered her insight on airlaid cores and noted that airlaid cores have numerous disadvantages and are a better match with products requiring less liquid absorption. “Airlaid cores are not being considered for baby diapers because airlaid does not yet measure up to the standard absorbent cores used today,” said Ms. Kraemer. “They do not have the same performance, their capacity is much less, rewetting is higher than with standard cores and the end product is stiffer. “Airlaid materials are suitable for other hygiene products, such as feminine care products for daily hygiene or for slight urinary incontinence.”

On the other hand, Bentley’s Mr. Braha believes that the airlaid core is essential to future improvements in baby diapers and views it as an innovation that is entirely new and will probably be welcomed with open arms by many manufacturers. Once one company begins to re-invent its diaper, others will soon follow to keep up with the competition in the diaper market. As more and more diapers adopt the new feature, the cost of the materials used to produce this feature would likely drop.

“The next big, major step is going to be the airlaid diaper,” opined Bentley’s Mr. Braha. “Airlaid material requires less machinery because the machinery is used more efficiently and with higher speeds. The result is less manufacturing costs and waste.” He added that once the airlaid core is out on the market, and it becomes more common in diapers, prices will go down.

Along with lower machinery costs, freight costs for diapers with lighter weights will also lead to lower transportation costs. Additionally, as diapers with increased absorbency levels lessen the need for frequent diaper changes, packages would contain less diapers. So, a thinner, lighter diaper would mean less overall package weight, which translates into lower transportation fees.
“Transportation costs are a huge factor with diapers,” said Bentley’s Mr. Braha. “With greater quantities with each use comes lower transportation costs.”

Braco’s Mr. Braha noted that the sluggish economy and lower birth rates are a big part of the blame as to why diaper sales are at a standstill.

“Birth rates are flat, consumption rates are flat,” Mr. Braha said. “There has not been many price increases during the past four years and most of the diapers are being sold within the U.S. and other developed regions so competition is lowered.”

While thinness is a key concern to diaper manufacturers, other demands still reign high on consumers’ checklists. Parents demand a lot from their babies’ diapers; they want them to offer strong protection and comfort. In short, consumers are seeking features that will resemble the most ideal diaper at the lowest price available.

Demanding A Perfect Diaper
One such company that is receiving these strong demands from consumers is private label diaper manufacturer, Paul Hartmann. Margarete Kraemer noted that the combination of high absorbency and comfort is one of the most requested features in diapers. “End users are quite clear about what they want,” Ms. Kraemer said. “They want highly absorbent diapers, leakage protection, less re-wetting and hence, less, or ideally, no skin irritation. They also want a perfect fit and maximum comfort and refastenable tapes, and they expect diapers to be easy to handle.”

Along with these demands, a common trend is also being seen in the diaper market, which Ms. Kraemer refers to as the “phase concept,” where diaper manufacturers offer several different phase, or size, options to tailor to all the different shapes and sizes of babies.

“There is a trend toward designing diapers suitable for different phases of the baby’s development, not just offering different sizes according to weight.” Ms. Kraemer explained. “There is also a focus on new, elastic materials for a more snug fit with increased comfort. The latest additions have been elastic and wider tapes, elastic backsheet materials and air-active/breathable diapers for healthier skin.”

Currently, Hartmann’s new products, “Fixies Ultra Dry” and “Fixies Extra Class Sensitive Care” have a highly absorbent core which locks away moisture and irritating substances contained in urine.

Hartmann has a new product lined up for next year, which follows the trend of more elastic found in diapers. “In March 2002 we are planning to launch ‘Fixies Extra Class Activ Wear,’” Ms. Kraemer said. “The diaper has wider elastic tapes and a new shape for a better and more comfortable fit.”

A new innovation from P&G also illustrates the aforementioned “phase concept.” The push behind the company’s forthcoming “Pampers Baby Stages” brand focuses on the baby’s development stages instead of size. The new line will replace P&G’s biggest global brand, “Pampers Premium,” when it is launched next month. Until now, “Pampers Baby Stages” has only been sold in Europe, where it is reportedly increasing P&G’s total marketshare.

The three-stage line is based on the baby’s development, not just its size. The line includes “Swaddlers,” designed for infants, “Cruisers,” with a special stretch material for toddlers, and “Easy-Ups” a pull-up pant. Swaddlers offer delicate comfort for a newborn baby, while Cruisers leverage custom-fit technology and are better for babies who are starting to crawl. Easy-Up’s are more absorbent for the independent child, according to a company spokesperson.

Hospital Specialty Company (Hospeco), Cleveland, OH, is also witnessing the high demands that customers seek in their baby diapers. Company executives have noticed that the absorbent core receives the biggest hit with demands, requiring several features at once to keep a baby dry and comfortable. Hospeco supplies its diapers to private label customers, and the company also has its own brand, “Precious” baby diapers, which can also be supplied to private label consumers.

“The primary objective of today’s consumer is to purchase a diaper that will absorb repeated insults without leaking while staying dry enough to ensure the child’s comfort,” said Paul Marion, vice president of sales for Hospeco.

Mr. Marion attributes several key materials that the absorbent core is made out of that allow for a diaper to work properly. “The superabsorbent polymer, fluff pulp and nonwovens in the absorbent core allow us to meet consumer needs with a National Brand Equivalent (‘NBE’) product line at a value price,” Mr. Marion explained.

Hospeco’s NBE product line includes such features as stretch tapes, stand up leg cuffs, elastic waistbands, a superabsorbent stay-dry core, a cloth-like backsheet and breathable panels and is packaged in compressed poly bags, which are similar to the material used by national brands.

What’s Next?
It is hard to predict what lies ahead for the diaper industry, especially since the current market is predominantly stagnant. With manufacturers uncertain of whether there will be another baby boom or when the economy will pick up, they can only judge what will need to be done to keep the baby diaper market afloat. Some private label manufacturers have admitted they are working on new production developments but refused to elaborate on their plans because of the competitive nature of the diaper market.

Hartmann’s Ms. Kraemer believes that the diaper market will remain competitive in the future, but the demographics of the market will change. While the U.S market comes to a slowdown, Asia, Eastern Europe and the Middle East will see more growth, and, for this growth to continue, individual communication is key. “To achieve maximum market penetration, there is a need for regional product ranges and regional marketing strategies rather than one global strategy,” Ms. Kraemer said. “Communication needs to be individual rather than mass, and marketers need to offer additional benefits, such as information services around all aspects of pregnancy, childbirth and baby care.”

Private label manufacturers will need to keep up with the diaper market leaders in order to remain active in the market. This is hard to do because many of the larger diaper manufacturers have what Ms. Kraemer refers to as a “two-product” strategy.

“The consolidation of mass retailers results in much fiercer price competition and shrinking profits—not only in the U.S.,” Ms. Kraemer explained. “For smaller players, it is getting increasingly difficult to survive in this market because of the two product strategy of many retailers. They carry only the market leader and private label products.”