George Tchevertakov

About George Tchevertakov

George began his financial career in 2004, obtaining invaluable trading and analyst experience in financial derivatives amidst the most challenging trading conditions in history caused by the Global Financial Crisis (GFC). George has contributed articles and editorial opinion pieces to several print and on-line publications around the world — covering a variety of topics including fundamentals, technical analysis, geopolitics, trading and economics.

Turning brown into green: Adult diapers the next boom market

Approx Reading Time-11Adult diaper sales are set to exceed those of the baby variety by 2020, with ageing populations and slick marketing making all the difference.

 

Adult diapers are expected to become a multi-billion dollar market over the coming five years, overtaking sales of diapers for babies.

In what may seem like an April Fools’ moment, diaper manufacturers are seemingly turning to the adult population for future sales growth. That’s according to a market research report published by Euromonitor, a global research agency of retail consumer markets.

In February of this year, Bloomberg.com reported, “Euromonitor International forecasts a 48 percent increase in sales in the category, to (US)$2.7 billion in 2020 from (US)$1.8 billion last year. That compares with expected growth of 2.6 percent, to (US)$6.3 billion, during that period for baby diapers”.

But that’s not all. “Growth in the adult-diaper market is outpacing that of every other paper-based household staple in the US.”

Adult diapers are shaping up to become the catalyst for the next wave of US consumer spending prowess.

diaper

Image: Bloomberg.com

Looking deeper, it would seem there are two factors responsible for the surge in adult diaper consumption.

 

Age before beauty

First, there is the demographic factor.

The world’s population is ageing, with some countries seeing grey faster than others. Merely three years ago, Euromonitor predicted that sales of adult diapers were set to overtake sales of baby nappies in Japan by 2014. According to Euromonitor’s projections, from 2012 to 2017, sales of adult diapers were to rise 25 percent in Japan, home to our fastest-ageing society. Japanese citizens aged 65 or older accounted at the time of these projections for 25 percent of the population. This is a notable increase from the 17.4 percent the demographic accounted for in 2000, and “is more than double that of South Korea and China whose elderly populations currently stand at 12.2 and 11.1 percent of the population, respectively.”

“They’re driving home the point that attractive people in their 40s and 50s or even younger, not just nursing-home residents, can be wearing this under their clothing.”

As birth rates slow down and longevity continues to increase, adult diaper manufacturers are eyeing up a market with strong expansion potential. One of the best aspects is that while babies eventually become old enough to not need diapers, incontinent elderly consumers tend to need them indefinitely.

Maybe that could explain the second factor behind the surge in adult diaper consumption.

 

Marketing smells

If ageing demographics raise diaper demand for health reasons, the second factor behind the boost in adult diapers seems to be rather psychological in nature.

Expensive marketing campaigns by multinational powerhouse brands such as Kimberly-Clark and Procter & Gamble have succeeded in making adult diapers hip and cool amongst adults.

Instead of being seen as a way of preventing incontinence, marketing campaigns are promoting adult diapers as a lifestyle choice aimed at comfort and convenience.

President of Adult and Feminine Care Sector at Kimberly-Clark, Jay Gottlieb, says the company’s goal is “to make the product more normal, and even fun, with real people in our ads saying, ‘Hey, I have bladder leakage, and it’s no big deal’.”

The dominant diaper manufacturer globally – accounting for 56 percent of global sales last year (Procter & Gamble and Sweden’s Svenska Cellulosa Aktiebolaget at nine and seven percent, respectively) – Kimberly-Clark produced a sales conjuring rap video as part of the marketing campaign for their “Depend” brand, with its employees promoting adult diapers less for health reasons but more so for style and fashion.

According to Marlene Morris Towns, a teaching professor of marketing at Georgetown University, “They’re driving home the point that attractive people in their 40s and 50s or even younger, not just nursing-home residents, can be wearing this under their clothing.”

So there you have it. If you were wondering which retail sector has the most commercial blue-sky potential over the coming few years, adult diapers may just be it.

 

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