Why diapers are in trouble: Americans are having fewer babies

[freemexy]

Birth rates began dropping in 2008 as the economy sank into a recession. Better access to contraceptives and younger Americans having children later in their lives have extended the decline, the National Center for Health Statistics found.newborn diapers per day
The downturn caused disposable diaper and training pant sales to fall almost 6% from April 2017 to 2018, according to Nielsen's most recent brick-and-mortar retail scanner data.
"This new reality is beginning to take a substantial toll," said Svetlana Uduslivaia, the head of industry research at Euromonitor International. The diaper slump will probably be the "normal for the foreseeable future."Fewer babies mean falling sales for Procter & Gamble (PG) and Kimberly-Clark (KMB), the country's leading diaper suppliers. (P&G makes Pampers and Luvs, and Kimberly produces Huggies and Pull-Ups training pants.)
In January, Kimberly said it would lay off around 13% of its workers and shutter 10 manufacturing plants to save money in the pinch.
"You can't encourage moms to use more diapers in a developed market where the babies aren't being born," chief executive Thomas Falk told analysts.Huggies or Pull-Ups account for about a third of the company's $18 billion in sales, according to AllianceBernstein analyst Ian Gordon. (Kimberly does not break out diaper sales.)
Pampers are P&G's top-selling brand, bringing in more than $8 billion a year. The conglomerate's baby care unit was its second largest business in 2017. It made up 14% of P&G's $65 billion worth of sales.
Huggies and Pampers have cornered the market by convincing parents that their diapers are the safest and most reliable for newborns and toddlers.
Last year, P&G controlled 43% of the market and Kimberly grabbed 35%, according to Euromonitor.
"Parents are extremely brand loyal when it comes to products for their kids," said Morningstar analyst Erin Lash. "If a diaper works and you don't have accidents or issues when you're out with your child, you probably will stick with it."If you have multiple children, and it works for one kid, you're going to start there for your second child," Lash said.
Diapers are also a profit windfall for the companies because they're expensive and parents repeatedly need to restock.
"There aren't as many expenditures for a household as big as diapers," said Leonard Lodish, a professor emeritus at the Wharton School of Business and an early investor in Diapers.com, the online startup founded by Marc Lore.