Age over youth
Changing consumer demographics are impacting the baby diaper and adult incontinence product sectors in the United States. While flat U.S. birth rates are contributing to slower diaper sales, the large base of aging baby boomers is triggering greater demand for adult incontinence selections.
Indeed, disposable incontinence product revenues were up 8 percent in 2015 to $1.8 billion, with a 7 percent increase in unit sales, reports Euromonitor International, a London-based market research firm. Baby diaper revenues grew 4 percent in 2015 to $6.1 billion, with unit sales up 3 percent.
Euromonitor forecasts the adult incontinence sector to have a compounded annual growth rate (CAGR) of 8 percent from 2015 to 2020, and baby diapers to have a CAGR of just 1 percent.
A new product perception
Also helping to spur adult incontinence product sales are changing shopper attitudes and behaviors.
“People are aging much more slowly than in years past and are maintaining very active lifestyles well in to their 60s and 70s,” states Erin Margerum, vice president of North American and European Union Sales for Haso Ltd., a Peachtree Corners, Ga.-based supplier of disposable underwear with replaceable pads. “Users also are becoming more comfortable talking about and admitting that they need a solution for light bladder leakage (LBL) and adult incontinence.”
Extensive marketing by national brands that is intended to destigmatize the perception of adult incontinence products also is resulting in greater activity, she notes.
“Women with LBL and adult incontinence who typically address their situations by using menstrual pads are now becoming more comfortable shopping for incontinence pads that are a more appropriate fit,” Margerum states.
But the national brands, with a 70 percent market share, continue to dominate the sector, reports IRI, a Chicago-based market research firm.
The biggest challenge for retailers seeking to grow private label sales is ensuring that the store brand items match the functionality of the national selections but carry a lower price tag, says Rick Jezzi, president of A.D. Jezzi & Associates LLC, a Bala Cynwyd, Pa.-based management and technical consulting firm that focuses on baby diaper and adult incontinence products.
The largest brands, he notes, have patents on their adult incontinence technologies and, because of volume discounts, are typically able to produce products at a lower cost than store brands.
Differentiation is crucial
“National brands need to differentiate themselves, and they protect that differentiation through patents,” Jezzi states. “Store brands can compete as long as they get close to the design and performance of the national items, as consumers will go for the ones with the cheaper price if products perform similarly.”
Product innovation, meanwhile, is ongoing. Margerum notes that with more older shoppers seeking adult incontinence selections, manufacturers are “racing” to create items that are discreet, convenient and underwear-like.
“Consumers are demanding products with absorbency they can rely on and designs that can help them maintain their dignity and active lifestyles,” she states.
Although it is paramount that retailers carry private label products that are similar in functionality and price to the national brands, it also is essential that the selections attract shoppers’ attention, Margerum notes.
Retailers, she says, could help generate buzz by offering smaller — or trial-size — packages that enable consumers to sample items without making a “sizeable investment” on a standard-size adult incontinence product package.
Offering products in distinct packaging also will enable store brands to stand apart from the national brand offerings on shelves, she states. Unique elements could include windows that allow shoppers to view the actual product.
“Windows give consumers the feeling that the item is a superior product in premium packaging,” Margerum notes.
A decline in package size
Packages for both adult incontinence products and baby diapers, meanwhile, are set to become increasingly smaller as developers create items that are made of less material for a more comfortable fit and to cut production costs, Jezzi says.
“Diapers are going to be much thinner, as 40 percent to 50 percent of the materials in most products do not absorb any liquid,” he notes. “There is a movement towards supporting more grams of liquid with fewer grams of material.”
The smaller — and lighter-weight — packaging also will enable retailers to cut operational expenses because of the subsequent reduction in freight and material costs, and a cutback in necessary warehouse space, he states.
To effectively launch new innovative products while also maintaining sales of the traditional — and often higher-volume — items, retailers should work closely with their suppliers in designing a merchandising strategy, Margerum says. That could include segmenting products as “good, better and best.”
“There also should be willingness by retailers to source from multiple suppliers,” she notes. “That creates a competitive environment and forces the suppliers to innovate, create and keep costs low.”
Join with a skillful partner
For best results, retailers would do well to find “expert” manufacturers that will educate them about the sector and work together with them to develop products with better sets of claims while jointly designing promotions, says a spokesperson for U.S. Nonwovens Corp., a Commack, N.Y.-based supplier of adult incontinence selections.
With the base of shoppers for incontinence products expanding, it also is crucial that retailers recognize and take advantage of sales opportunities, the spokesperson says. That includes merchandising selections that target specific needs, in addition to carrying items for a broader audience.
“There is more incisive demand for pinpoint management and care,” the spokesperson notes. “Retailers need to educate themselves on the new incontinence paradigm shift and headwinds rather than just being generalists.”
The market also will include more environmentally conscious shoppers who will seek diapers and adult incontinence selections that are biodegradable or sustainable, Jezzi says.
However, because product materials are primarily oil-based, and with oil prices remaining low, most suppliers will be reluctant to switch to more bio-friendly elements until petroleum costs rise, he states.
Do ensure the functionality of own-brand incontinence and baby diaper products comes close to that of the national brand.
Don’t neglect to offer incontinence products that meet differing adult needs.
Do follow the trend toward thinner baby diapers, adult incontinence products.
Don’t forget to design incontinence products for the active lifestyles of baby boomers.