An old Sample of my Diaper Industry Email report (free by subscription):

Today 1st of May 2003, is Labor Day in México as it is in many other countries around the globe. After a few E mails from List-Bot members asking me to send an update report about the disposable diaper market in the Unites States, I finally had a chance to take advantage of this holiday to make a short summary report to satisfy your “hunger” for information. Thank you to all of you for helping me be updated about what happens, special thanks to our members in Asia and Eastern Europe who are frequently sending me notes and suggestions.

US diaper market update 2003, what happened?

Last year we saw a dramatic change in the configuration of the diaper-pants market in the United States. In my 18+ years in the business, there have been only very few times when we have seen such important shifts. P&G the biggest winner, changed from a market share of 34% (diaper and pants) in January 2002 to a new record high of 42% at the end of April 2003, while at the same time the biggest hit was taken by the private label sector with a decreased share from 28% to 23% at the end of April 2003, this is a 5.4% net reduction in share (equivalent to a reduction of 18% in sales with respect to previous year). An important correction was also taken by KC that changed from 36% to a lower 33% for the same period, however they were able to keep a strong market share position when looking at baby diapers only.

Last year biggest explanation to this new reconfiguration I associate to the tremendous success of the P&G training pants; they were able to gain as much as 20% of the total pants sales in the States (April 2003) from basically owning nothing at the end of 2001. The biggest drop was for KC pull-up pants, moving them from a very respectable 63% share to a new low of 52% at the end of April 2003. Private label training pants were also affected by P&G success, moving PL sales from a 37% share to a new record low of only 28% at the end of April. Tyco is the largest participant in this sector as we all know, and for sure has been getting the biggest blows from P&G.

Another important factor that contributed to this dramatic market change is the count change the third quarter of last year (September 2002), even when the original intention was to increase the price of the diaper, at the end it resulted in a cost increase to the manufacturers, not the consumers, the count on the package changed but not the price per diaper, and to make things worst this happened at the same time that several raw materials were showing signs of increased costs. This strategy helped P&G gain some inertia as KC had to follow with a corrective action and stay with the original price per diaper. P&G also took a very aggressive position against the private label business by promoting their “Luvs” brand as an alternative to “own” brands, with not only a huge advertising expenditure but also by taking the whole concept as a new forced-reality to the supermarket chains. Many of these Chains took the bite at the expense of their own labels, as they have not been able to completely digest Tyco’s purchase of Paragon. There may be still a few out there not completely satisfied with the shift from Paragon to Tyco, but for sure less than last year. Tyco has been trying to improve their public relations with clients making sure the trend, if not stopped, at least reaches a “holding” position. KC on the other hand, has been executing a very intelligent response. They have identified the need to recover the lose Pull-Up sales, but instead of doing it with more training pant support, they have decided to fight this market with a “convertible” baby diaper that can double as a training pant. As we know, increased training pant sales, have an effect in the larger baby diaper stages. This is easy to see by looking at KC drop in sales at stages 5 and 6 ( …well you need to buy the latest Nielsen report). Even when I believe there are some minor “execution” problems with KC’s new convertible design, once they learn how to solve them, it is going to be very interesting to see the result, specially because the new product is much less expensive to manufacture in comparison to P&G’s pant and their own Pull-Ups. A pant or a diaper? Why invest in a training pant machine when you can make a diaper work like a baby pant?…!! for sure this brings a very interesting issue and a big risk for those people buying training pant machines today.

And taking about companies investing in training pant technology, the new player in the US market will be Mabesa, a Mexican company (the forth largest producer in Nafta) who has now joined forces with Rockline, after separating from a very “complicated” (to say the least) relationship with Paragon almost two years ago. Mabesa has been very active visiting several current and potential new clients and informing them about their new investments in equipment and their new plant expansion, including a state of the art Zuiko machine for pants, and 3 new baby diaper lines to be installed in Tijuana this year. Mabesa will be targeting the private label business, specially the west coast. Absormex, a smaller Mexican company, started a very successful expansion into the Texas private label market, they value their “low profile” and are much more selective regarding their target clients. A.H.P has been reported with a bounce in sales. A.H.P. had many initial problems after they purchased the Drypers factories, it seems they have finished with the painful learning curve and are back cruising in a better track. A.H.P. also took advantage of Tyco’s new role, by addressing niche clients that were not too happy with the fusion. This was specially true for Arquest too, which gained more Walmart sales with their client’s help and special attention after the Tyco’s fusion.

Well, I hope I have at least given you a snack of the US market, keep me updated of what happens in your own local markets.

Best luck and best regards,

Carlos Richer (Dr Diaper)

An old Sample of my Diaper Industry Email report (free by subscription):

Today 1st of May 2003, is Labor Day in México as it is in many other countries around the globe. After a few E mails from List-Bot members asking me to send an update report about the disposable diaper market in the Unites States, I finally had a chance to take advantage of this holiday to make a short summary report to satisfy your “hunger” for information. Thank you to all of you for helping me be updated about what happens, special thanks to our members in Asia and Eastern Europe who are frequently sending me notes and suggestions.

US diaper market update 2003, what happened?

Last year we saw a dramatic change in the configuration of the diaper-pants market in the United States. In my 18+ years in the business, there have been only very few times when we have seen such important shifts. P&G the biggest winner, changed from a market share of 34% (diaper and pants) in January 2002 to a new record high of 42% at the end of April 2003, while at the same time the biggest hit was taken by the private label sector with a decreased share from 28% to 23% at the end of April 2003, this is a 5.4% net reduction in share (equivalent to a reduction of 18% in sales with respect to previous year). An important correction was also taken by KC that changed from 36% to a lower 33% for the same period, however they were able to keep a strong market share position when looking at baby diapers only.

Last year biggest explanation to this new reconfiguration I associate to the tremendous success of the P&G training pants; they were able to gain as much as 20% of the total pants sales in the States (April 2003) from basically owning nothing at the end of 2001. The biggest drop was for KC pull-up pants, moving them from a very respectable 63% share to a new low of 52% at the end of April 2003. Private label training pants were also affected by P&G success, moving PL sales from a 37% share to a new record low of only 28% at the end of April. Tyco is the largest participant in this sector as we all know, and for sure has been getting the biggest blows from P&G.

Another important factor that contributed to this dramatic market change is the count change the third quarter of last year (September 2002), even when the original intention was to increase the price of the diaper, at the end it resulted in a cost increase to the manufacturers, not the consumers, the count on the package changed but not the price per diaper, and to make things worst this happened at the same time that several raw materials were showing signs of increased costs. This strategy helped P&G gain some inertia as KC had to follow with a corrective action and stay with the original price per diaper. P&G also took a very aggressive position against the private label business by promoting their “Luvs” brand as an alternative to “own” brands, with not only a huge advertising expenditure but also by taking the whole concept as a new forced-reality to the supermarket chains. Many of these Chains took the bite at the expense of their own labels, as they have not been able to completely digest Tyco’s purchase of Paragon. There may be still a few out there not completely satisfied with the shift from Paragon to Tyco, but for sure less than last year. Tyco has been trying to improve their public relations with clients making sure the trend, if not stopped, at least reaches a “holding” position. KC on the other hand, has been executing a very intelligent response. They have identified the need to recover the lose Pull-Up sales, but instead of doing it with more training pant support, they have decided to fight this market with a “convertible” baby diaper that can double as a training pant. As we know, increased training pant sales, have an effect in the larger baby diaper stages. This is easy to see by looking at KC drop in sales at stages 5 and 6 ( …well you need to buy the latest Nielsen report). Even when I believe there are some minor “execution” problems with KC’s new convertible design, once they learn how to solve them, it is going to be very interesting to see the result, specially because the new product is much less expensive to manufacture in comparison to P&G’s pant and their own Pull-Ups. A pant or a diaper? Why invest in a training pant machine when you can make a diaper work like a baby pant?…!! for sure this brings a very interesting issue and a big risk for those people buying training pant machines today.

And taking about companies investing in training pant technology, the new player in the US market will be Mabesa, a Mexican company (the forth largest producer in Nafta) who has now joined forces with Rockline, after separating from a very “complicated” (to say the least) relationship with Paragon almost two years ago. Mabesa has been very active visiting several current and potential new clients and informing them about their new investments in equipment and their new plant expansion, including a state of the art Zuiko machine for pants, and 3 new baby diaper lines to be installed in Tijuana this year. Mabesa will be targeting the private label business, specially the west coast. Absormex, a smaller Mexican company, started a very successful expansion into the Texas private label market, they value their “low profile” and are much more selective regarding their target clients. A.H.P has been reported with a bounce in sales. A.H.P. had many initial problems after they purchased the Drypers factories, it seems they have finished with the painful learning curve and are back cruising in a better track. A.H.P. also took advantage of Tyco’s new role, by addressing niche clients that were not too happy with the fusion. This was specially true for Arquest too, which gained more Walmart sales with their client’s help and special attention after the Tyco’s fusion.

Well, I hope I have at least given you a snack of the US market, keep me updated of what happens in your own local markets.

Best luck and best regards,

Carlos Richer (Dr Diaper)

An old Sample of my Diaper Industry Email report (free by subscription):

Today 1st of May 2003, is Labor Day in México as it is in many other countries around the globe. After a few E mails from List-Bot members asking me to send an update report about the disposable diaper market in the Unites States, I finally had a chance to take advantage of this holiday to make a short summary report to satisfy your “hunger” for information. Thank you to all of you for helping me be updated about what happens, special thanks to our members in Asia and Eastern Europe who are frequently sending me notes and suggestions.

US diaper market update 2003, what happened?

Last year we saw a dramatic change in the configuration of the diaper-pants market in the United States. In my 18+ years in the business, there have been only very few times when we have seen such important shifts. P&G the biggest winner, changed from a market share of 34% (diaper and pants) in January 2002 to a new record high of 42% at the end of April 2003, while at the same time the biggest hit was taken by the private label sector with a decreased share from 28% to 23% at the end of April 2003, this is a 5.4% net reduction in share (equivalent to a reduction of 18% in sales with respect to previous year). An important correction was also taken by KC that changed from 36% to a lower 33% for the same period, however they were able to keep a strong market share position when looking at baby diapers only.

Last year biggest explanation to this new reconfiguration I associate to the tremendous success of the P&G training pants; they were able to gain as much as 20% of the total pants sales in the States (April 2003) from basically owning nothing at the end of 2001. The biggest drop was for KC pull-up pants, moving them from a very respectable 63% share to a new low of 52% at the end of April 2003. Private label training pants were also affected by P&G success, moving PL sales from a 37% share to a new record low of only 28% at the end of April. Tyco is the largest participant in this sector as we all know, and for sure has been getting the biggest blows from P&G.

Another important factor that contributed to this dramatic market change is the count change the third quarter of last year (September 2002), even when the original intention was to increase the price of the diaper, at the end it resulted in a cost increase to the manufacturers, not the consumers, the count on the package changed but not the price per diaper, and to make things worst this happened at the same time that several raw materials were showing signs of increased costs. This strategy helped P&G gain some inertia as KC had to follow with a corrective action and stay with the original price per diaper. P&G also took a very aggressive position against the private label business by promoting their “Luvs” brand as an alternative to “own” brands, with not only a huge advertising expenditure but also by taking the whole concept as a new forced-reality to the supermarket chains. Many of these Chains took the bite at the expense of their own labels, as they have not been able to completely digest Tyco’s purchase of Paragon. There may be still a few out there not completely satisfied with the shift from Paragon to Tyco, but for sure less than last year. Tyco has been trying to improve their public relations with clients making sure the trend, if not stopped, at least reaches a “holding” position. KC on the other hand, has been executing a very intelligent response. They have identified the need to recover the lose Pull-Up sales, but instead of doing it with more training pant support, they have decided to fight this market with a “convertible” baby diaper that can double as a training pant. As we know, increased training pant sales, have an effect in the larger baby diaper stages. This is easy to see by looking at KC drop in sales at stages 5 and 6 ( …well you need to buy the latest Nielsen report). Even when I believe there are some minor “execution” problems with KC’s new convertible design, once they learn how to solve them, it is going to be very interesting to see the result, specially because the new product is much less expensive to manufacture in comparison to P&G’s pant and their own Pull-Ups. A pant or a diaper? Why invest in a training pant machine when you can make a diaper work like a baby pant?…!! for sure this brings a very interesting issue and a big risk for those people buying training pant machines today.

And taking about companies investing in training pant technology, the new player in the US market will be Mabesa, a Mexican company (the forth largest producer in Nafta) who has now joined forces with Rockline, after separating from a very “complicated” (to say the least) relationship with Paragon almost two years ago. Mabesa has been very active visiting several current and potential new clients and informing them about their new investments in equipment and their new plant expansion, including a state of the art Zuiko machine for pants, and 3 new baby diaper lines to be installed in Tijuana this year. Mabesa will be targeting the private label business, specially the west coast. Absormex, a smaller Mexican company, started a very successful expansion into the Texas private label market, they value their “low profile” and are much more selective regarding their target clients. A.H.P has been reported with a bounce in sales. A.H.P. had many initial problems after they purchased the Drypers factories, it seems they have finished with the painful learning curve and are back cruising in a better track. A.H.P. also took advantage of Tyco’s new role, by addressing niche clients that were not too happy with the fusion. This was specially true for Arquest too, which gained more Walmart sales with their client’s help and special attention after the Tyco’s fusion.

Well, I hope I have at least given you a snack of the US market, keep me updated of what happens in your own local markets.

Best luck and best regards,

Carlos Richer (Dr Diaper)