Nappy giants strain to fill their pockets

Faced with decline, the nappy market is becoming a very uncomfortable place for manufacturers. Packaged goods giants Procter & Gamble (P&G) and Kimberly-Clark (K-C) are fighting for parents’ custom, with a huge array of products including separate nappies for boys and girls, a range of sizes from newborn to toddler and even dayand night-time variants.

P&G-owned Pampers and K-C’s Huggies – the two biggest brands in the nappy market – are trying to drive sales at a time when the UK’s birth rate is declining, with Mintel reporting that the number of children aged four and under fell by 5.1 per cent between 1997 and 2001.

Hence consumers are being bombarded by a raft of product innovation and revamps, while both the Pampers and Huggies brands are being extended beyond nappies into all aspects of baby care.

Observers are not convinced these brands’ appeal can be extended to older infants, or that nappies can be presented as a lifestyle choice – but that is not stopping the manufacturers. P&G recently announced a relaunch, scheduled for this month, of its Pampers Baby Dry range. The relaunch will be backed by a &£5m advertising and marketing push in an effort to put pressure on Huggies’ Freedoms nappy range (MW last week). The initiative was announced just a month after the &£6.8m relaunch of Huggies’ parent and baby club (MW May 23).

In August, P&G is to launch a Pampers baby wipes range, called Kandoo. This will be marketed as a transitional tool for threeto-five year olds as they progress from nappies to the toilet. The Pampers brand has also been extended into disposable bibs called Bibsters (MW June 7, 2001); packaged face-and-hand wipes called Wipesters and Sunnies, a sunscreen lotion on a wipe. Recently, P&G struck a licensing deal to make Pampers Clean ‘n’ Play, a cleaning fluid that can be sprayed onto toys (MW January 10). The brand has also been licensed to a clothing company to make baby pyjamas and blankets.

Anna Eggleton, a senior consultant at branding consultancy Value Engineers, says: “The concern for nappy manufacturers is how to create ‘news’, and consequently get noticed by consumers. But what surprises me is that manufacturers have been either fairly inactive or unsuccessful in nappy brand extension.”

Eggleton says that brand innovation can turn out to be more of a product enhancement than a brand extension. In the US, Huggies’ latest “innovation” includes the launch of Huggies Supreme, a nappy with “comfort stretch sides”, which claims to provide a more secure and comfortable fit than ordinary nappies.

One baby product buyer dismisses the Pampers Baby Dry relaunch, questioning how adding “new” in front of the brand name will drive sales. He says: “With increasing competition, manufacturers are tweaking their existing products to create some sort of interest, in a market that is falling in both value and volume. Such revamps mean little to shoppers and only end up confusing them.”

Leo Beaumont, client services director at brand and new product development specialist agency Butcher & Gundersen, also questions the significance of the Pampers relaunch. He feels that the brand may expose itself to ridicule if it is over-extended: “The fear is that Pampers and Huggies could soon become commoditised and hence devalued. Consumers today can see when manufacturers are trying to milk brands, and they could lose their credibility.”

A P&G spokeswoman defends the Baby Dry relaunch, saying: “Continuous product innovation to meet the needs of our consumers is Pampers’ lifeblood. Irrespective of birth rates – which are obviously outside our control – this continuous product innovation has helped us remain market leader since we launched 20 years ago.”

According to Mintel, Pampers and Huggies together accounted for 90 per cent of the UK market by value last year, and their combined ad spend of &£12.6m represented 97 per cent of the total ad spend in the disposable nappies sector. Saatchi & Saatchi handles advertising for Pampers, and Huggies is handled by Ogilvy & Mather.

Another industry observer says that, despite efforts to create a blockbuster product – such as Huggies’ range of nappies for different stages of a baby’s development, introduced last year – the relative market share of the top two brands has not changed dramatically. Disposable nappy sales fell by 19 per cent, from &£457m to &£370m, between 1997 and 2001.

One insider says: “There is only so much that you can do with a nappy brand – you can improve on the absorbency, breathability, feel and fit. I cannot see any nappy brand being extended into baby food. Even extending it into clothing may not work, because clothes are all about aspirations.”

He criticises “clumsy ventures such as the launch of Pampers Care Mats”, which damage brand value. The Care Mats – disposable mats on which infants could be placed while changing their nappies or to protect toddlers against bed-wetting – were launched three years ago. Less than six months later, P&G was forced to label the mats with a safety warning after fears were raised that they could suffocate young babies (MW January 27, 2000).

Sceptics feel that new product and variant launches in the nappy sector are often simply a means for companies to gain a temporary edge over rivals. Whether all the new product development and brand relaunching will help to expand the sector in the long term is open to question.