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Private label diapers: on the branded bandwagon?

Biodegradability, thinness, elastic waists and inner-leg gathers are the hallmarks of private label diapers as they head into the 1990's maintaining their hold on a significant portion of the $3.5 billion U.S. baby diaper business.

Results from the exclusive Private Label Disposable Diaper Study, just published in the magazine's January/February 1990 issue, indicate that the private label disposable diaper market share slipped to 16.9% in units, down from 19.4% only a year earlier. However, the survey pointed out, -other " diapers, which includes many controlled labels and small, regional brands, jumped in share from 6.1% to 7.2%.

Virtually all national brands recorded share declines in the past year at the expense of P&G's "Luvs Deluxe" boy/girl diapers (see January, 1990 Nonwovens Industry, page 26).

The strength of the private labels in this segment has come from being able to respond to the changes made by brand leaders Procter & Gamble and Kimberly-Clark, changes that have included gender specific diapers and improved leakage protection. The private labels remain in favor with retailers because they carry profit margins 400% higher than the brands; while most national brands have profit margins of about 3%, store brands generally carry margins of 10-20%.

According to the PL study, 56.5% of supermarket, drug and mass merchandise retailers reported that their sales of private label disposable diapers had increased in the past year an average of 6%. More than 90% of the retailers surveyed indicated they supported their store brand diaper programs with promotions.

Private label suppliers spent much of 1989 adding the product improvements pioneered by P&G and K-C. Among the advances in the past year:

* Store brand elastic waist disposable diapers were introduced in mid-1989 to better compete with "Huggies" and Luvs elastic waistimprovements. The private label Suppliers also added foam to the elastic waist, which allows for a snugger fit without leaving red marks on the baby. This feature is expected to become standard on all private label Ultras sometime this year and could signal the end for store brand blue waist barrier diapers.

* With the introduction of Loblaw's "President's Choice" private label biodegradable diapers, store brands have taken center stage in the environmental debate surrounding disposable diapers in North America.

* The first private label gender specific disposable diapers were also introduced during 1989, but the private label suppliers have yet to rush to join the stampede begun by P&G's Luvs for Boys and Luvs for Girls; that may change this year as both P&G's Pampers" and K-C's Huggies are also joining the gender specific fray. The primary concern is the reaction by retailers forced to give additional space to what is essentially a doubling of products.

* Most disposable diaper marketers agree that diapers will continue to get thinner, PL pointed out. Some chains have already introduced the equivalent to Ultra Pampers Plus, a thinner version of the current Ultra diapers.

* The newest innovation joined by the private label suppliers is innerleg gathers, a leakage control shield already in Huggies. When the obstacles of patent protection and the expense of converting machinery are overcome, inner-leg gathers are expected to become standard on all private label Ultra diapers.

* The trend towards superabsorbent diapers continues in the private label arena. Approximately 55% of private label diapers now contain superabsorbents, up from 42% a year ago but still well below the 83% share superabsorbents have in the national brands.

* Meanwhile, white elastic leg diapers represent about 23% of private label sales, down f rom 31 %, and blue waistband diapers own the remaining 22%, down from 27%. It is expected that store brand superabsorbent diaper sales will continue to grow at the expense of both elastic legs and blues.

Count Reduction, Main Outlets

* The national brands have reduced their standard counts on medium diapers from 48 to 44 and on small diapers from 66 to 60. Most retailers have either already followed this hidden price increase or are in the process of doing so with their private label entries.

* While supermarket chains continue to dominate the disposablediaper market, their 75.5% share is actually a drop from last year's 76.6% share. Drug chains have managed to pick up some of these sales, increasing their share from 9.6% to 10. 1 %. Mass merchandisers also gained a bit of ground at the expense of supermarkets, jumping from a share of 13.8% last year to 14.4%.

* Sales of generic disposable diapers are declining rapidly as the market continues to shift towards the premium varieties. Several chains have already dropped generic diapers altogether and many others surveyed by PL indicated they would be doing so during 1989.

Baby Wipes: Going Low Profile

It was a 'flat' market in terms of packaging but a healthy one for sales of private label baby wipes The 'flat' packaging concept for private label baby wipes, preferred by consumers and retailers because they are easier to handle, made 1989 a 'low profile' year in the North American market. Canadian retailers have led the way in the move to the low profile tubs, which were introduced by brand marketers Johnson & Johnson and Scott in the U.S.

Unfortunately, Private Label pointed out in the Private Label Wipes report in its January/February issue, private label suppliers were slow to recognize the benefits and consumer acceptance of this packaging concept.

The introduction of flat packs has also resulted in a change in the standard counts from 40, 80 and 120 to 42, 84 and 126 counts. There is also more count flexibility now being offered by suppliers to private label retailers. The trend is definitely towards the larger 126 and even 260 counts.

Total retail sales of baby wipes, according to the PL survey, jumped 12.9% in the past year to about $360 million. Store brands continue to account for approximately 20% of this total.

Tubs represent 62% of the baby wipe market currently, with Baby Fresh," private labels, "Sofkins' J&J and Natural Touch' leading the way, m that order Meanwhile, canisters account for the remaining 38%, with private labels, 'Wash-A-Bye,' 'Chubs,' 'Diaperene' and Wet Ones- the major players.

The low profile environmental baby wipe packs have been adopted first by private label programs at a number of major Canadian chains. PL suggests that they will not catch on as quickly in the U.S.
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Title Annotation:includes related article
Publication:Nonwovens Industry
Date:Mar 1, 1990
Previous Article:Disposability update: the decade of the diaper rash.
Next Article:INDEX '90: the largest nonwovens show ever.

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