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October 25, 2018

The “Changing” Landscape of Diapers

MHT Partners  | Consumer Investment Bank

Over 3.8 million babies were born in the United States in 2017, according to the National Center for Health Statistics, and with most babies using four to twelve diapers per day, depending on age and other factors, diapers are big business. Parents change thousands of diapers a year, and at an average cost of $0.20 – $0.50+ per disposable diaper, costs can really add up, reaching thousands of dollars before a child reaches potty-training age. Beyond costs, however, the environmental impact of the significant volume of diapers generated each year and the safety of the materials used to manufacture disposable diapers are increasingly on the minds of new parents and influencing purchasing decisions in this massive market.

The market for diapers continues to evolve as caregivers balance diaper costs with the desire to be more “green.” Diapers are one of the most significant contributors to landfills nationwide, with approximately 49 million diapers thrown away every day in the United States, according to the Clean Air Council. Cloth diapers have long been the favored environmentally conscious diaper option (although they do require energy, water, and detergent to wash). However, increasingly, consumer products’ companies are offering biodegradable and eco-friendly diaper options. Brands including Honest Company, Earth’s Best Organic, and Seventh Generation market diapers that include naturally derived and/or sustainably sourced materials and are also often touted as better for baby – hypoallergenic and free from harsh chemicals, fragrances, and dyes.

Some of the larger players in the traditional diapers’ space have also recently focused on developing more eco-friendly and natural diapers, such as Proctor & Gamble’s Pure line, which debuted in 2018 and offers disposable diapers free of chlorine bleaching, fragrance, parabens, and latex. Amazon also recently made a push back into the market for diapers in 2017 (which it had previously exited in 2015), offering the Mama Bear line of disposable diapers, and just recently introduced the “Amazon Exclusive” Earth + Eden brand, made with sustainable-sourced fluff and non-toxic inks to compete with Honest and other natural, eco-friendly brands.

It remains to be seen how the introduction of numerous eco-friendly diaper brands and Amazon’s recent re-entrance into the disposable diaper market will impact competition in the space, which for many years was dominated by Pampers (Proctor & Gamble) and Huggies (Kimberly Clark). Regardless, it is clear that the increase in the number of diapering options available bodes well for new parents focused on the health and well-being of their children and for the planet too.

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