The diaper industry in the next 25 years

The Diaper Industry inThe Diaper Industry in
the Next 25 yearsthe Next 25 years
The Nurses and attendants staff we provide for your healthy recovery for
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Index of TopicsIndex of Topics
 How can you anticipate the future?How can you anticipate the future?
 A quick review of the past and the history of the diaperA quick review of the past and the history of the diaper
 Why so many companies are loosing money with diapers today?Why so many companies are loosing money with diapers today?
 What is the size of the diaper market today? How is it divided?What is the size of the diaper market today? How is it divided?
 Where is the future growth for baby and adult diapers?Where is the future growth for baby and adult diapers?
 What will be the new features of the future diaper?What will be the new features of the future diaper?
 What to expect in the next 20 years, who will survive?What to expect in the next 20 years, who will survive?
 Conclusions and time for questions.Conclusions and time for questions.

Risks predicting the futureRisks predicting the future
 No one knows the future… but we can have an educatedNo one knows the future… but we can have an educated
guess.guess.
 Sales people need to anticipate the future. (Due to everSales people need to anticipate the future. (Due to ever
increasing SKU’s it is starting to be impossible to operateincreasing SKU’s it is starting to be impossible to operate
without a good sales forecast)without a good sales forecast)
 Industry leaders need a future vision to steer the companyIndustry leaders need a future vision to steer the company
in the right direction.in the right direction.
 Regarding sales forecasts…. The use of electronic dataRegarding sales forecasts…. The use of electronic data
transfers with clients and suppliers will be mandatory intransfers with clients and suppliers will be mandatory in
order to reduce manufacturing and working capital costs.order to reduce manufacturing and working capital costs.
 Predicting the short term is not hard, predicting the longPredicting the short term is not hard, predicting the long
term future requires similar tools and maybe a bit more ofterm future requires similar tools and maybe a bit more of
intuition.intuition.

A quick review to diaper History before 1960A quick review to diaper History before 1960
Maria Allen
Marion Donovan 1946
1870 First
Mass Production
Of cloth diapers
George Shroder 1949
1949 First pin free diaper

A quick review at modern diaper historyA quick review at modern diaper history
Billy Gene Harper
Carlyle Harmon
1966
Vic Mills 1961
Fluff replaced Tissue
1972
Leg Cuffs 1986
Modern Diaper 20051978 “Hourglass Shape”
Inventors of SAP

Summary of events in modernSummary of events in modern
diaper historydiaper history
 Launch of modern disposable diaper by P&G, 1961Launch of modern disposable diaper by P&G, 1961
 Invention of Superabsorbent Polymer, 1966Invention of Superabsorbent Polymer, 1966
 First use of tapes integrated to a diaper, 1971First use of tapes integrated to a diaper, 1971
 Introduction of fluff instead of creped tissue, 1972Introduction of fluff instead of creped tissue, 1972
 First use of Superabsorbent in diapers, 1987First use of Superabsorbent in diapers, 1987
 Frontal Tape and Hook and Loop systems, 1987Frontal Tape and Hook and Loop systems, 1987
 Use of leg cuffs for leak prevention, 1989Use of leg cuffs for leak prevention, 1989
 Introduction of training pant diapers, 1994Introduction of training pant diapers, 1994
 Use of cloth like back sheets and breathables, 1994Use of cloth like back sheets and breathables, 1994

Diaper wars 101:Diaper wars 101:
 What is happening today with the diaper industry?What is happening today with the diaper industry?
 What is a “purging cycle”? A globalized price war!What is a “purging cycle”? A globalized price war!
 Who starts a new purging cycle?Who starts a new purging cycle?
 We may like to think purging cycles start as a resultWe may like to think purging cycles start as a result
of coordinated collaboration…. No! I believe theyof coordinated collaboration…. No! I believe they
are truly random events.are truly random events.
 How do they get started? …. They start when thereHow do they get started? …. They start when there
is a weak link in the supply chain!is a weak link in the supply chain!

Individual ElementsIndividual Elements Pine Trees, Oil, propylene gas…Pine Trees, Oil, propylene gas…
Basic MaterialsBasic Materials Acrylic acid, Hydrocarbon resins,Acrylic acid, Hydrocarbon resins,
PP pellets, tackifiers, etcPP pellets, tackifiers, etc
Finished Raw MaterialsFinished Raw Materials SAP, Hot melts, Cellulose Pulp,SAP, Hot melts, Cellulose Pulp,
Nonwovens, Spandex, BOPP, etc.Nonwovens, Spandex, BOPP, etc.
Diaper ManufacturingDiaper Manufacturing Diapers, sanitary napkins, adultDiapers, sanitary napkins, adult
incontinence, etcincontinence, etc
Distribution ChannelsDistribution Channels Wal-Mart, Carrefour, Walgreen, etcWal-Mart, Carrefour, Walgreen, etc
ConsumerConsumer Parents buy product for their baby.Parents buy product for their baby.
The supply Chain

Diaper Wars 101 (Continued)Diaper Wars 101 (Continued)
 An important disruption in the supply chainAn important disruption in the supply chain
starts a new price war cycle!starts a new price war cycle!
 An extended “fixed price” supply contractAn extended “fixed price” supply contract
 What past experience do we have regardingWhat past experience do we have regarding
these cycles? (1994-1996 was the last one whenthese cycles? (1994-1996 was the last one when
pulp peaked close to $1,000 USD/Ton)pulp peaked close to $1,000 USD/Ton)
 Purging cycles will continue every 7 to 11 years.Purging cycles will continue every 7 to 11 years.
 How can you get ready for the next purgingHow can you get ready for the next purging
cycle? You need to be very well informed.cycle? You need to be very well informed.

The name of the game is InformationThe name of the game is Information
 Who can provide us with the right information?Who can provide us with the right information?
 The enemy of my enemy is my friendThe enemy of my enemy is my friend ……information can beinformation can be
free! Look for partners! Unfortunately this seldom happens.free! Look for partners! Unfortunately this seldom happens.
 Industry References: Nonwovens World, Nonwovens Industry,Industry References: Nonwovens World, Nonwovens Industry,
Nonwovens Markets, web page subscriptions, etc.Nonwovens Markets, web page subscriptions, etc.
 Prediction: One magazine will evolve toPrediction: One magazine will evolve to AbsorbentsAbsorbents World,World,
AbsorbentsAbsorbents Industry orIndustry or AbsorbentsAbsorbents Markets.Markets.

Size of the baby diaper marketSize of the baby diaper market
today and year 2025today and year 2025
 If you count all of the babies of the world from the age ofIf you count all of the babies of the world from the age of
newborn to 30 months old, there arenewborn to 30 months old, there are 321321 million babies.million babies.
 If every baby in the world used a disposable diaper we wouldIf every baby in the world used a disposable diaper we would
need 15,600 diapers/sec (490 billion per year).need 15,600 diapers/sec (490 billion per year).
 Today, only one in every 5 babies uses a disposable diaper.Today, only one in every 5 babies uses a disposable diaper.
 In year 2025 the world will haveIn year 2025 the world will have 328328 million babiesmillion babies
 If diapers changes are reduced 5% due to better design…If diapers changes are reduced 5% due to better design…
 Total diaper requirement in 2025 will be reducedTotal diaper requirement in 2025 will be reduced 2.9%2.9%
 For year 2025 I expect that more than one third of theFor year 2025 I expect that more than one third of the
babies in the world will use a disposable diaper, almostbabies in the world will use a disposable diaper, almost
doubling current volume sales of 2005.doubling current volume sales of 2005.

Babies 0 to 30 months
(Millions)
0
10
20
30
40
50
60
70
India
ChinaIndonesiaPakistan
United
States
Brazil
M
exicoPhilippines
EgyptVietnam
2005
2025

What can we learn fromWhat can we learn from
the Table:the Table:
 There are twice as many babies in India today as all ofThere are twice as many babies in India today as all of
the babies in the America’s (from Alaska to Argentina).the babies in the America’s (from Alaska to Argentina).
 India has 45% more babies and 3 times more density ofIndia has 45% more babies and 3 times more density of
babies per unit area than China.babies per unit area than China.
 USA is the only country that shows significant babyUSA is the only country that shows significant baby
growth in the next 20 years (due to immigration).growth in the next 20 years (due to immigration).
 There are 4 African countries in the list of the 10 largestThere are 4 African countries in the list of the 10 largest
in regards to population of babies; with PPP belowin regards to population of babies; with PPP below
$600 they were not considered in previous table.$600 they were not considered in previous table.

Size of the adult diaper todaySize of the adult diaper today
and year 2025and year 2025
 There are 316 million adults over 70 years old inThere are 316 million adults over 70 years old in
the world today (1 in every 3 requires protection).the world today (1 in every 3 requires protection).
 By the tear 2025 there will be 563 million, this is aBy the tear 2025 there will be 563 million, this is a
78% increase78% increase (compare this against the 2.1%(compare this against the 2.1%
increase for babies)increase for babies)
 For year 2025 I expect adult incontinenceFor year 2025 I expect adult incontinence
sales will grow at least 3 times the currentsales will grow at least 3 times the current
volume sales of today.volume sales of today.

Grow of people >70 between 2005 and 2025
-
20
40
60
80
100
120
140
China
India
United
States
JapanRussia
G
erm
any
ItalyFrance
Indonesia
Brazil
Older>70 Y2005
Older>70 Y2025

What can we learn from the table:What can we learn from the table:
 China has the largest population of senior citizens andChina has the largest population of senior citizens and
also the biggest growth in the next 20 years.also the biggest growth in the next 20 years.
 India and the USA will also have significant growth.India and the USA will also have significant growth.
 European countries have marginal growth, Europe isEuropean countries have marginal growth, Europe is
not the “old continent” only because of its buildings…not the “old continent” only because of its buildings…
today it is also old because of its people.today it is also old because of its people.
 Indonesia and Brazil will move from positions 9 andIndonesia and Brazil will move from positions 9 and
1010thth
to position 5to position 5thth
and 6and 6thth
in year 2025.in year 2025.

Diapers required by countryDiapers required by country
(market share)(market share)
 Market share data per country is not available (not free).Market share data per country is not available (not free).
 I believe it is possible to estimate market share usingI believe it is possible to estimate market share using
only macroeconomic indicators from each country.only macroeconomic indicators from each country.
 With a mathematical model that uses “pre-segmented”With a mathematical model that uses “pre-segmented”
Purchasing Power Parity (PPP), Unemployment dataPurchasing Power Parity (PPP), Unemployment data
and a minimal threshold PPP that triggers diaper sales.and a minimal threshold PPP that triggers diaper sales.
 The only information we do not have are the culturalThe only information we do not have are the cultural
barriers that generate market resistance…but we canbarriers that generate market resistance…but we can
have an educated guess.have an educated guess.

Market Share for Baby Diapers from my model:Market Share for Baby Diapers from my model:
Only countries with PPP > $2,000Only countries with PPP > $2,000
(*(*Nigeria, Bangladesh, EthiopiaNigeria, Bangladesh, Ethiopia
and Congo excluded*and Congo excluded*))
CountryCountry Market Share 2005Market Share 2005
IndiaIndia 2.0%2.0%
ChinaChina 5.5%5.5%
IndonesiaIndonesia 9.0%9.0%
PakistanPakistan 4.0%4.0%
United StatesUnited States 95.5%95.5%
BrazilBrazil 29.5%29.5%
MexicoMexico 58.6%58.6%
PhilippinesPhilippines 21.5%21.5%
EgyptEgypt 22.2%22.2%

What kind of cultural and social barriers?What kind of cultural and social barriers?

Social and economic Barriers:Social and economic Barriers:
 In many countries the cost of diapers are veryIn many countries the cost of diapers are very
high in relation to the cost of labor. In India, ithigh in relation to the cost of labor. In India, it
is still possible to hire a maid with $100 dollarsis still possible to hire a maid with $100 dollars
per month (but not for long).per month (but not for long).
 It takes a lot of money to reeducate peopleIt takes a lot of money to reeducate people
regarding what are acceptable social practicesregarding what are acceptable social practices
(such as babies “peeing” on the street).(such as babies “peeing” on the street).
 Note: The playboy maid photo was to make sure you were not sleepyNote: The playboy maid photo was to make sure you were not sleepy 

Baby diaper market predictionsBaby diaper market predictions
 China will have the largest baby market grow in the next 5China will have the largest baby market grow in the next 5
years or so. Explain… Compare with Japan…years or so. Explain… Compare with Japan…
 India will be the largest consumer of diapers within the nextIndia will be the largest consumer of diapers within the next
15 years, explodes in about 3 to 5 more years when PPP15 years, explodes in about 3 to 5 more years when PPP
reaches required Threshold (get ready!)reaches required Threshold (get ready!)
 Brazil (waiting for higher PPP), 10% of the people in BrazilBrazil (waiting for higher PPP), 10% of the people in Brazil
have 50% of the wealth. Indonesia…have 50% of the wealth. Indonesia…
 North African Countries (exceptional growth!)North African Countries (exceptional growth!)
 Latin America (Colombia, Argentina, Chile) OK. Mexico andLatin America (Colombia, Argentina, Chile) OK. Mexico and
Caribbean countries limited because of current poverty levelsCaribbean countries limited because of current poverty levels
(Mexico’s poverty is 40% and market share is close to 60%,(Mexico’s poverty is 40% and market share is close to 60%,
only growth in this region are exports)only growth in this region are exports)

Let us talk about theLet us talk about the
new diaper features.new diaper features.

How do you imagine the diaper of the future?How do you imagine the diaper of the future?
 People like to fantasize about the use of electronic gadgets.People like to fantasize about the use of electronic gadgets.
 The need moves the market and not only the technologyThe need moves the market and not only the technology
I do not believe these gadgets will be mass produced

The diaper of the future:The diaper of the future:
 Landfill volume reduction, use microcapsules.Landfill volume reduction, use microcapsules.
 Skin protection, microcapsules to control pH !!Skin protection, microcapsules to control pH !!
Grows when wetAfter salt is released

Diaper of the future:Diaper of the future:
 Special nonwoven fabrics (breathable when dry)Special nonwoven fabrics (breathable when dry)
 New nonwovens (breathable only when its hot)New nonwovens (breathable only when its hot)
 Backsheet without the need of laminated film will bring aBacksheet without the need of laminated film will bring a
new generation of extra soft diapers.new generation of extra soft diapers.
 High compression packaging will continue.High compression packaging will continue.
 Air laid or pulp? What about synthetics? When?Air laid or pulp? What about synthetics? When?
 Better elastic components to improve diaper fit.Better elastic components to improve diaper fit.
 Much better pad integrity with new generation hot melts.Much better pad integrity with new generation hot melts.
 How much more performance in a diaper?How much more performance in a diaper?

Predictions regarding industry diversificationPredictions regarding industry diversification
 Successful paper companies have a good chance ofSuccessful paper companies have a good chance of
becoming successful diaper producers.becoming successful diaper producers.
 Successful diaper producers have a slim chance ofSuccessful diaper producers have a slim chance of
also becoming successful tissue producers,also becoming successful tissue producers,
examples are everywhere.examples are everywhere.
 Be careful when you diversify!!Be careful when you diversify!!

This platform has been started by Parveen Kumar ChadhaThis platform has been started by Parveen Kumar Chadha
with the vision that nobody should suffer the way he haswith the vision that nobody should suffer the way he has
suffered because of lack and improper healthcare facilitiessuffered because of lack and improper healthcare facilities
in India. We need lots of funds manpower etc. to make thisin India. We need lots of funds manpower etc. to make this
vision a reality please contact us. Join us as a member for avision a reality please contact us. Join us as a member for a
noble cause.noble cause.

Our views have increased theOur views have increased the
mark of the 1,07,000mark of the 1,07,000
 Thank you viewersThank you viewers
 Looking forward for franchise, collaboration,Looking forward for franchise, collaboration,
partners.partners.

Contact us:- 011-25464531, 9818569476
E-mail:- nursingnursing@yahoo.in
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The diaper industry in the next 25 years

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