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Carving a regional niche in baby diaper business: one-year-old UltraCare Products has focused on quality and a strict expansion schedule to make its presence felt right in P&G's backyard.

Carving a Regional Niche In Baby Diaper Business

one-year-old UltraCare Products has focused on quality and a strict expansion schedule to make its presence felt right in P&G's backyard Amidst all of the new product and new company activity in the U.S. baby diaper industry the past few years, there is one new company with a new product that stands out from the rest.

That company is UltraCare Products, the child of former Paper Converting Machine executive Randy Schaaf. In little less than a year it has been able to carve out a very profitable niche for its "Cozies" diaper brand right in Procter & Gamble's backyard while also expanding into more eastern markets.

Mr. Schaaf, who serves as president of the Marion, OH diaper producer, told Nonwovens Industry recently that UltraCare has achieved a 15% share in some of its primary markets and currently ranges between a 5-15% share in newer markets in Michigan, Pennsylvania and New York; the company also recently entered the Philadelphia and southern New Jersey area.

Cozies, which are modeled after state-of-the-art diapers, include 10 strands of "Lycra" elastic, a blue wetness barrier, refastenable tapes with a landing zone (which has pictures of its panda bear face mascot) and superabsorbent, are priced between $8.99-$9.49 at retail. Because they are typically $1 a package more expensive than the private labels they are not aimed at the lower end segment; but since they are still about $1 a package less than the national brands, they have been able to attract mothers looking to save money yet purchase a more premium product.

A key feature of the Cozies diapers is its unique black packaging (featured on the cover of this issue). Mr. Schaaf said a host of focus groups were consulted before this radically different style package was introduced with the first shipment of Cozies last February. "There's no doubt that the contemporary looking package got us the trial purchases that we were looking for," he said. "Then we were able to deliver a premium diaper comparable to the national brands, which led to repeat purchases."

UltraCare is currently running seven days a week on its original PCMC Model 510 machine, with its 70 employees producing what amounts to 120 million diapers annually. An order for a second machine has already been placed and is expected to be on-stream this spring. With it will come expansion into new markets and further strength in existing areas. In an unrelated move, UltraCare began producing Cozies with a starch-based biodegradable backsheet in December in response to consumer and retailer demand.

Mr. Schaaf said the midwest to the northeast U.S. will remain UltraCare's primary thrust. "We will expand into new markets, but we will not lose our niche as a regional producer," he said. "We have gotten calls from outside of our region, but we want to grow at a controlled rate. We will do what we can do profitably while making a quality diaper."

It is this challenge of maintaining a strict expansion schedule while producing a higher quality diaper that has allowed UltraCare to become a profitable enterprise in its first year of operation. Mr. Schaaf said it was a combination of factors that contributed to the formula for success.

"All of the people in management have considerable experience in the diaper industry. The total experience of management is in excess of 80 years," he said. "Secondly, we are absolutely committed to doing everything in a quality fashion, which is sometimes tough to do when you are under the severe financial constraints any new venture faces. And we operate on a team based system, where all employees are involved in the decision making process. It is the efforts of all UltraCare associates that have made the difference."

PHOTO : The UltraCare Brain Trust: (l-r) John Cramer, engineering manager; Herb Bender, technical

PHOTO : services manager; Randy Schaaf, president; Larry Hallada, plant manager; Chet Czypinski,

PHOTO : sales manager.
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Author:Jacobsen, Michael
Publication:Nonwovens Industry
Article Type:company profile
Date:Jan 1, 1990
Words:660
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