At the Kimberly-Clark manufacturing facility in Paris, Texas, boxes of Huggies diapers move along a conveyor belt.
Laura Buckman | Bloomberg | Getty Images
Let’s call it the Covid Baby Bust.
Experts predict a decline in birth rates this year due to the Coronavirus pandemicPut pressure on the consumer giants that manufacture infant formula, baby formula and diapers; The Wall Street Journal reported Monday.
Barclays predicts births in China will fall 8% this year, while the Brookings Institute estimates US births could shrink by half a million, citing the effects of an economic recession, the newspaper said. This is due to the fact that the birth rates in the US and China are already at their lowest levels.
This means a sharp decline in the birth rate this year Nestles Gerber and Reckitt BenckiserEnfamil will have fewer parents buying their baby food. Pampered owner Procter & Gamble and Huggies owners Kimberly-Clark This could also lead to lower sales in the baby segment.
In recent years, as births have slowed in the US and China, consumer giants have turned their attention to sales of premium baby products. Procter & Gamble, for example, makes diapers that use tape or mimic the fit of pants. Last year, Huggies launched Special Delivery, a premium diaper made from plant-based materials that is free of parabens, fragrances, and elemental chlorine.
Michael Hsu, CEO of Kimberly-Clark, told analysts on the company’s latest earnings call that it will focus on growing its baby sales in developing markets where birth rates are higher, such as Indonesia.
Lower birth rates haven’t stopped some retailers trying to gain a foothold in the category. Walmart relies on his baby gears still driving traffic. And when parents have fewer children, they may be more willing to spend more money on them.