Bottoms Up

Innovative design, attractive packaging and a low price all have to come together to persuade mom to switch to store brand disposable diapers and training pants.

You're only young once. For new parents struggling with the high cost of raising children in today's tough economy, this old adage is somewhat reassuring. The diaper days might be expensive, but they don't last long.

Manufacturers and retailers of disposable diapers, training pants and baby wipes are well aware of this fact. They long have struggled with constant turnover and volume changes as their customers grow out of their products. These days, the challenge is even greater, as many couples are holding off expanding or even starting their families.

According to data from market research firm SymphonyIRI Group, Chicago, dollar sales within the total disposable diapers category fell 4.8 percent during the 52 weeks ending Aug. 7 (U.S. supermarkets, drugstores and mass merchandiser outlets, excluding Walmart). But store brand offerings managed to hold their own, growing 4.9 percent in the timeframe to reach $318.7 million. (See the table, p. 54.)

Do consider investing in diaper innovations such as wider, more elastic tabs and "greener" options.

"The presence of private label disposable diaper brands has increased substantially in recent years, and retailers are clearly gaining a larger share of the market," says Molly Maier, senior analyst, health and wellness, for global market researcher Mintel International.

Don't rely on packaging alone to sell store brand diapers and training pants. Employ traditional and social media-based marketing to build both trial and continuity.

Diaper duty

A happy baby usually means a happy mom. And keeping mom happy with her overall infant care purchases could pay off across the board for a retailer's store brand program.

"Creating value [for] these primary purchasers in this category can determine performance in other household product segments," explains a company spokesperson for Great Neck, N.Y.-based First Quality Baby Products.

A good fit, absorbency and overall comfort always have been the makings of a good diaper. But today's disposable diapers are taking shape, literally.

"The latest trends are in more narrow (anatomic) diapers with extra features such as wider and more elastic tabs and [a] waist band and a printed back sheet," says Ernesto Ortegon, export manager for Mexico-based LAMBI S.A.

These leaner diapers benefit the product packaging as well.

"Packaging has been compressed more," Ortegon adds, "which can save plastic costs and also optimize logistics."

Speaking of packaging, whether drawing attention to a diaper's eco-benefits or its new patterns or features, it remains an important part of a retailer's store brand diaper and training pants lineup.

"Packaging needs to be fresh and inviting to the consumer," says Steven Light, vice president of Miami-based Impex of Doral.

Cleanup Time

According to data from market research firm SymphonyIRI Group, dollar and unit sales within the private label baby wipes category grew 3.5 percent and 0.4 percent, respectively, in the 52 weeks ending Aug. 7. (See the table, p. 54.) Store band baby wipes now command an impressive 35 percent of the overall category.

A March 2011 report from Mintel International, "Disposable Baby Products — US," says private label baby wipes represent a potential threat to their name brand counterparts. Although national brand loyalty still has a stronghold within the disposable diaper category, consumers are somewhat less loyal when it comes to a single brand of baby wipes. Instead, they are more interested in pricing and an exceptional value, the report says.

Do create packaging that not only is fresh and inviting to the moms, but also stresses the diapers' or training pants' value proposition.

Diaper design and style also have become important for reasons other than function — an interesting turn for a product that is meant to be worn under clothing.

"Recently, we've seen an explosion in aesthetic-driven design options within the industry," notes Chris Ferdock, vice president of marketing for Duluth, Ga.-based Associated Hygienic Products (AHP). "Specifically, the emergence of Huggies jeans-style diapers and other various prints including camouflage, polka dots and argyle patterns."

Other attempts at differentiation include convenience-minded products such as Huggies Slip-Ons.

"[They are] designed to provide quick and easy changing for mothers at a premium price," Ferdock says.

But he has some doubts about the slip-on diaper's real potential on the store brand side.

Environmental responsibility is an issue that also figures in prominently with disposable diapers and training pants. Disposable diapers often are viewed as a necessary evil — something that just comes with the territory of new parenthood. But "greener" options seem to be popping up all over.

"Natural options appeal to 'eco-parents' who are leery of cloth," says Mintel's Maier. "Demand for more eco-friendly disposable diapers that provide added comfort and protection for babies is likely to grow in the future."

Communicate the value message

Light notes the market's evolution past "the plain white packaging" and stresses that store brands' "simple cost-to-benefit value proposition" appeals to educated consumers.

First Quality's spokesperson agrees.

"The practice to drive best store brand sales and share for consumers directly relates to the optimal combination of great product quality at a fair value price," the spokesperson explains. "That combination must be effectively communicated."

To be successful, retailers must build a true store brand program, Ferdock explains. That program must include a heavy dose of marketing — both traditional and social media-based — to build both trial and continuity. Ferdock points to Kroger (Comforts brand) and Target (up&up brand) as two examples of retailers that boast best-in-class programs.

The use of marketing data also is becoming more important.

"With a longer-term view of marketing and promotional plans," Light explains, "store brands will continue to improve and carve out more market share."

Ferdock believes "the days of blindly following the national brands are over." He says AHP's research indicates distinct demographic differences between branded and private label loyalists. By taking the time to process and understand these variances, "many retailers can exploit the opportunity via product, package and promotional designs to build a loyal private label following."

A loyal bunch

Building and retaining a loyal following for store brand diapers and training pants is easier said than done. According to Mintel's exclusive research, up to 55 percent of mothers have a preferred name brand diaper they regularly buy, compared to just 6 percent who usually buy store brand disposable diapers or training pants.

Part of the blame falls on the store brand programs themselves, Ferdock says. His company sees constant changes occurring within some private label programs. These always-evolving programs "do not provide adequate time to build a loyal following," he explains.

Training days

While diapers aim to keep baby dry, training pants have the added responsibility to transition toddlers away from disposables and into regular underwear. Many parents use them as part of an overall potty training system.

But unlike diapers, which babies and toddlers usually wear for a couple of years, training pants have a usage that spans only months or even weeks. Also, plenty of parents choose to forgo them entirely, opting to keep using diapers instead.

Don't discount the Internet's potential; online diaper sales continue to grow.

According to "Disposable Baby Products — US," a March 2011 Mintel report, training pants that truly "help parents teach" their toddlers could drive growth on the store brand side.

Down the line

Despite the recent challenges, the overall disposable diapers and training pants segment appears to be headed for a comeback. The lower birth rates seen during the recent recession and recovery should reverse and move back upward as the economy and employment outlook bounce back. And the reversal should bode well for store brands.

But retailers might want to look beyond their brick and mortar stores to grow sales here.

"Internet sales continue to grow," AHP's Ferdock says, "and this shopping channel needs to be closely monitored over the next few years to determine its impact on the overall marketplace."