Retailers are looking at other baby care segments to offset dismal diaper and wipe sales. Not only has the diaper segment been challenged by a dive in the percentage of households purchasing diapers, supermarket retailers are being squeezed by low-priced competition from online retailers and subscription services, as well as from club stores.
- Poor diaper and wipe sales have spurred grocers to look to such other baby care segments as novelties, oral care and bath products and toiletries.
- Some supermarkets are finding ways to layer higher-margin products into the baby care aisle, adding natural, free-from and clean-ingredient offerings.
- In keeping with these trends, major brands like Johnson & Johnson and Baby Magic are reformulating and repositioning their products, while the diaper segment is showing some innovation with high-performance but value-priced private label products and a new item featuring an electronic activity sensor.
“Diaper sales are down in all of my 30 stores,” admits John Trapp, buyer at Gerland’s Food Fair, a chain based in Houston. “The category is a nonissue.” Data from Chicago-based IRI shows that dollar sales of diapers fell 3.8% in the supermarket channel for the 52 weeks ending Jan. 29, while dollar sales of wipes were up 2% in the channel for the same time period.
To offset the dive in diaper sales, Trapp expanded the chain’s baby novelty section and has seen continued success with infant oral care. “We redid our novelty set a year ago, and it’s all doing great,” he says. Imported rattles that sell for $1 have had strong sales, and branded rattles selling for $3.99 remain healthy. The array of price points has served to lift the entire category.
Seeking Higher Margins
Other chains are finding ways to layer higher-margin products into the baby care aisle. Vons uses clip strips in its baby care section to display baby bath products with prices points at $3.99 and $6.99. The chain recently ran a promotion that offered $5 off when shoppers spent $40 on baby care products. Wegmans Food Markets merchandises products such as baby booties and pacifier clips from Mud Pie that retail for $5.95 and $6.95, respectively, on clip strips near diapers.
In the baby toiletry section, natural products are showing an increase, while the rest of the category remains flat. Rising instances of allergies and skin sensitivity concerns among children are driving the demand of organic and natural baby care products and leading to increased usage of baby care toiletries, according to information from Chicago-based market research firm Mintel.
Less Is More
“Baby personal care products made with fewer and simpler ingredients are particularly appealing to parents, as they perceive these products as a gentler and safer option for their baby’s skin.”
According to Guinaugh, brands are tapping into the baby personal care market by promoting their “clean” ethos. Last year, Emeryville, Calif.-based Amyris unveiled a new baby personal care brand, Pipette, which claims to use the fewest possible ingredients from the purest sources. “Sugarcane-derived squalane is the hero ingredient used in Pipette’s baby personal care products, which is described as a safe and sustainable version of squalene,” observes Guinaugh. The brand is carried by Target and Buy Buy Baby.
Across channels tracked by IRI, Dr. Bronner’s Baby and Beiersdorf AG’s Eucerin experienced double-digit dollar sales increases for their baby soap products. Galderma Laboratories’ Cetaphil Baby and Beiersdorf’s Aquaphor Baby brands also outperformed the category overall.
“I see a soft switch to natural products,” notes Kent Sheperd, category buyer at Broulim’s Fresh Foods, a 10-unit chain based in Rigby, Idaho. “All-natural diapers are more popular, and consumers are moving away from talcum to cornstarch powder.” Sheperd hasn’t added any natural baby care brands yet, but points out that adult natural skin care brands are showing an uptick. “The Naked Bee does very well for us, and The Honest Company products are picking up,” he says.
Guinaugh observes that consumer demand for fewer and simpler ingredients has led more brands, even mainstream and store brands, to enter the natural and clean baby care space, suggesting that “natural” may become less of a differentiator for brands.
After double-digit declines in sales of its iconic baby care products, New Brunswick, N.J.-based Johnson & Johnson overhauled its Johnson’s baby washes, lotions and hair care products two years ago to feature fewer ingredients, ergonomic new packaging and a greener manufacturing footprint.
The company revealed that it would be transparent about all ingredients in its products and said that 96% of the ingredients used in Johnson’s baby products were now naturally derived. Johnson’s baby products with the company’s new Cotton Touch technology saw significant dollar sales increases over the 52-week period ending Jan 29.
Last year, legacy brand Baby Magic introduced a reformulated line of products that now includes natural ingredients and is free of sulfates, mineral oil, dyes, parabens, phthalates, talc and lanolin. In addition to skin care products in the Original Baby scent, which now includes camellia oil and marshmallow root, the brand, from Flower Mound, Texas-based Naterra, added products in a new Sweet Buttercup scent, infused with calendula oil, coconut oil and shea butter, and a Lavender Lullaby line that features the aromatic scents of lavender and chamomile.
As part of its repositioning, Baby Magic also moved into some new categories: The brand introduced a first-of-its-kind Hydrogel Multi-Purpose Patch to soothe dryness, sunburn and fever; a collection of wipes; diaper rash ointment; and a mineral 50 SPF sunscreen.
Licensed products are always an important part of baby and toddler care HBC. “‘Frozen’ is still really popular, but there’s not much else going on,” says Sheperd. “Licensing is important to this category, and films have a big influence.”
“We bring in licensed product for any big movie that’s coming out, but sometimes I have to reduce the price if it doesn’t sell,” notes Trapp. He agrees that the “Frozen” franchise has become an evergreen property, adding that “Spider-Man” is a perennial strong seller for boys in the category.
Despite the slide in sales, there is some innovation occurring in the diaper segment.
Private label products, which have seen dollar sales slide in the baby soap and lotion categories, have been disrupting the diaper market with new and improved offerings, according to Guinaugh.
“In 2019, Target announced that its private label baby brand, Cloud Island, would be expanding its product line to include diapers, wipes, toiletries and feeding products,” she says. Benchmarked against premium brands based on the ingredients used in each item, Cloud Island’s products are designed to be as effective as branded competitors, but 30% to 40% less expensive.
Giunaugh also notes that while baby monitoring isn’t new to the market, some brands are unveiling innovations that expand into new frontiers of health-and-wellness tracking. “Lumi by Pampers is described as the world’s first all-in-one connected care system and claims to help parents identify patterns and routines so they can make adjustments in the interest of the baby’s health and wellness,” she explains.
The brand, from Cincinnati-based Procter & Gamble, combines a high-resolution video monitor with an activity sensor to give parents real-time data that tracks the room’s temperature and humidity, diaper wetness, sleep, and feeding, through a companion app.