Baby Steps

The baby care products market is waking up from a lengthy slumber. Shopper frugality during the recession and falling birth and fertility rates led to relatively flat sales of disposable baby products over the last five years, reports Mintel, a global market research firm.

But the sector is poised for growth as birth rates stabilize and consumer confidence increases. Mintel projects dollar sales of disposable baby products will reach $8.9 billion in 2019, up from $7.8 billion in 2014. Baby wipes are generating the strongest activity, followed by lotions and bath products, Mintel notes.

Store brands, meanwhile, will trigger significant activity over the next several years as more products incorporate wellness-oriented ingredients while retaining appealing prices, says Margie Nanninga, Mintel home and personal care analyst.

Think natural and safe

“The availability of functional, lower-cost private label products, including many touting natural ingredients or sensitive skin formulations, will continue to make the market highly competitive,” Nanninga notes. “Parents are focusing more on safety and are feeling guilty if their children experience skin irritation and other issues.”

Indeed, more baby products will contain elements that consumers perceive to be heathier, reports Euromonitor International Inc., a London-based market research firm with U.S. headquarters in Chicago.

“Interest in natural and organic baby care products has grown out of the emerging consumer demand for organic and natural products in packaged food, as well as adult personal care,” Euromonitor states. “Many Americans start buying organic food when they become parents, as they want the purest and healthiest items for their children. As they start reading labels on food for their children, they are more inclined to read labels on baby care products as well, being on the lookout for preservatives and other additives such as parabens.”

Popular selections will contain elements that parents perceive as being gentler on the skin, including coconut oil, beeswax and sunflower seed oil, notes Ed Berman, president of Tropical Products Inc., a Salem, Mass.-based manufacturer of private label baby care items such as washes, shampoos, lotions, oils and soaps.

“Consumers are pulling away from products that contain mineral oils and petroleum derivatives,” Berman states, adding that newer launches also will include combinations of natural oils and unique fragrances.

As more shoppers seek the safest baby products, retailers must ensure that their store brand items are as effective and dependable as the national brand offerings, particularly because many consumers are willing to pay more for the pertinent selections, Nanninga says.

“Even though they are looking to save money, parents won’t buy items if they don’t feel comfortable,” she notes. “Anything …retailers can do to stress that their store brands work as effectively as the national brands will help capture the trust of the parents. That can include delivering information on packages and via store displays.”

New opportunities

To further boost activity, Nanninga also suggests that retailers target pregnant women in their merchandising, as they are not yet loyal to specific baby products and are more willing to try store brands.

Indeed, most brand and purchase decisions are made in the second trimester, not after the child is born, says Lucienne Deponte, senior director, category management, for Nice-Pak Products Inc., an Orangeburg, N.Y.-based producer of private label baby wipes.

“This emphasizes the importance of deep and readily available information about the product, its benefits, where to buy it and its value versus other options,” she states, adding that millennial moms source a majority of baby care product information through the Internet and at the shelf.

Imitate or innovate?

While private label baby products are evolving, it often is still more practical for retailers to have their store brands mirror the national brand offerings rather than release distinct formulations, Berman says.

“Coming out with your own designer brand is an uphill battle and usually too difficult,” he notes.

Still, there are times when retailers should offer store brands that surpass the performance and features of the national brand selections, says Charles Wachsberg, president and CEO of Apollo Health and Beauty Care, a Toronto-based producer of private label baby products.

“If national brands are slow to change or are not doing things best-in-class, retailers should look to optimize their product development,” he says. “That means seeing themselves as leaders.”

However, Wachsberg, whose company produces such items as shampoos, detanglers, lotions, creams and ointments, states that it is important for retailers to be fastidious in their creation of private label baby care products because the quality of a retailer’s offerings will impact consumers’ perception of all store brand items.

“Parents will never again purchase a product if at one time it creates discomfort for the baby or is not true to its benefit claims,” he says.

It is crucial, he adds, that retailers eschew products with potentially harmful preservatives that can irritate a baby’s sensitive skin and leverage offerings with natural and sustainable ingredients.

“A high-quality and innovative baby care program should be in every retail success story,” he states. “There must be a high trust, so retailers must be meticulous about the quality of their baby toiletries.”

The whole package

While the ingredients in baby products and their performance will dictate the degree of success, packaging that is attractive and functional also will have a major impact on sales and shopper devotion to products, Wachsberg states.

Functionality pluses could include side grips that make it easier for users to hold packages in a wet environment, pumps that dispense the right amount of liquid, and stable packages that do not easily tip over.

“If it doesn’t look good and have good ergonomics and a useful design, it won’t sell,” he says. “There also must be exceptional labeling with messaging that contains the most important claims.”

Product claims, Wachsberg notes, should list attractive features and also convey what the item won’t do — for example, irritate the skin.

Hit the road

To develop the most effective and attractive store brands, it is important that retailers work closely with their suppliers, manufacturers note. That includes visiting the suppliers’ plants to analyze first-hand the range of potential product ingredients, says a spokesperson for US Nonwovens Corp., a Brentwood, N.Y.-based producer of private label baby wipes, pre-soaped baby wash cloths and toddler wipes.

“It is much better to tour the plant and get ideas on products and innovations rather than send 3,000 e-mails back and forth or do everything by phone or spreadsheet,” the spokesperson states. “It is beneficial to see the sample room, touch things and get explanations on options when they are being reviewed.”

Plant visits also enable retailers to forge and strengthen relationships with all persons involved in the development of the store brand items. Retailers also should share with suppliers their shortand long-term business objectives for the entire category — not just private label — Deponte states.

“This enables the supplier to best help the retailer construct a program to meet those objectives,” she says. “A multi-year agreement also enables the supplier to invest in the innovation needed to keep the retailer ahead of the curve.”

In addition to a close retailer-supplier relationship, store brand success also is reliant on retailers giving a powerful focus to their private label operations, Wachsberg adds.

“A strong concerted and overall commitment to doing the right thing generates the best results,” he states. “It will result in innovations, the launch of products with new chemistries, the bringing of products to market quicker and the extensive promotion of the products.

Do invest in natural ingredients parents view as safer.

Don’t neglect pregnant women in own-brand marketing efforts.

Do visit suppliers and their facilities to learn about new ingredients and spur ideas.

Don’t be afraid to innovate, but take a fastidious approach.