Trends in the Baby Diaper Market

“The pandemic has served as a double-edged sword for the diaper industry,” says Sonali Jagadev, research analyst - Beauty & Fashion, Euromonitor. “On one hand, greater price sensitivity has weakened the spending power of the consumer. On the other hand, increased health and eco-awareness has popularized value added product features with clean origin, natural, plant-based and organic products. Now, some questions have arisen: how do you reach the point where value and quality can meet, and how do you get this balance in the post-pandemic world?”

Although the U.S. is a mature market, Euromonitor is still expecting to see modest growth for baby diapers over the next five years, with disposable pants driving this growth. Most of the growth seen today is not volume driven; it is price driven because of inflation, Jagadev adds.

Dyper CEO Sergio Radovcic says the supply chain has proven to be one of the most pressing challenges for young brands. “Between the pandemic, the raw material availability and fluctuating prices it creates a constant flux. Brands such as Dyper that rely on specialized plant-based materials and unique raw materials are often particularly disadvantaged and have to exhibit high resilience to assure uninterrupted supply to consumers. These and other challenges also present unique opportunities to innovate, something that comes naturally to young brands rooted in challenging the status quo.”

Pricie Hanna, managing partner, Price Hanna Consultants, notes that all competitors have been forced to raise diaper prices to pass through material and supply chain price increases. “To date, it appears that retailers and consumers alike have understood this and generally accepted the higher prices in the U.S. However, household budget pressures are increasingly motivating consumers to start to try lower priced diapers,” she explains. “The inflation pressures and consumer concerns are more intense in Europe due to more severe energy and food inflation hikes.”

In the U.S., diaper leaders have reported that private label share gains have happened but seem moderate, Hanna says, while in Europe, where the private label shares have historically been higher than the U.S., private label share growth has been slightly higher this year.

Recently, Jagadev has seen strong competition from private labels in the U.S. “Gone are the days when private labels were just considered as a cheaper alternative to the leading brand. Today, private label is not about cheaper—they are just as innovative as premium brands. Private label brands are continually evolving, and in recent years retailers have re-made their own brands by integrating popular product features such as plant-based ingredients, biodegradable, sustainably sourced, soft for baby’s skin, along with eye catching packaging and targeted marketing language. It’s further clouding the line between national brands and private label.”