By Jill Rivkin

Once again, financial pressure is affecting consumer purchasing decisions, though in the baby care segment there still is a willingness to spend as parents focus expenses on their children. According to London-based Mintel, the $3.4-billion market for disposable baby products grew by only 3 percent from 2003 to 2008.

But, Mintel reports: “Consumers looking to stretch household budgets may decrease luxury or optional purchases such as multiple baby lotions, but the convenience of disposable products precludes discontinuing use completely.”

According to Chicago’s Euromonitor, “In previous years, Americans had been very willing to spend on higher-priced, value-added baby care products.” The market research firm cites a number of contributors to this trend, though largely credits the older demographics of today’s parents. There has been an increased incidence of first-time parents being in their 30s and 40s, rather than trends of decades past where most couples started families in their 20s. Older parents often have more disposable income and have shown a strong commitment to putting their children’s needs and desires ahead of their own, Euromonitor reports. This has been tremendous opportunity for manufacturers and brand owners.

The baby care segment is home to a large cross-section of products ranging from disposable diapers, training pants and wipes to a plethora of bath and body care products, as well as extensive toddler line-ups for potty training and childhood hygiene. Each category within the segment reflects how parents are making individual decisions as the economy continues to inflict financial pressure.

The Mainstays: Diapers and Wipes

The diapers and training pants segment has fluctuated during the past six years, Mintel reports. Simply based on the number of users, this segment in particular is affected by birth rates. Birth rate is a “key driver,” according to Mintel, reporting that the number of children age 3 and under grew by 5.8 percent from 2003 to 2008 and is estimated to increase by another 3 percent from 2008 to 2013.

And of course as the Hispanic population in the United States continues to grow, its influence is that much stronger. Mintel reports that the fertility rate among Hispanics in the U.S. is much higher than among other races and ethnicities as nearly 25 percent of births in 2006 were to Hispanic mothers.

Undoubtedly, performance in disposable diapers is imperative to satisfy consumers. But as sustainability and environmental issues continue to be top-of-mind, performance needs to be enhanced even further to entail fewer diapers needed per day and ultimately less waste. Also, consumer education needs to be more thorough so there is a complete understanding of the composition – and ultimate decomposition – of disposable diapers. Renewed interest in cloth diapers in recent years has impacted the segment, though most parents still will not sacrifice the convenience of disposable diapers.

Similarly, the convenience of disposable wipes has spurred the category and created many usage occasions beyond diaper changes. “Continued expansion of the use of wipes and moist towelettes away from the changing table has helped to grow the segment steadily,” Mintel reports. Overall, sales of baby wipes and moist towelettes were 20 percent higher in 2008 than 2003, Mintel reports.

Similar to the disposable diaper segment, in the wipes segment consumers have made it clear that they want products that address specific attributes. Trends show “more and more options in every product attribute imaginable,” says Tom G. Hill, senior vice president/general sales manager at Ontario, Calif.-based Diamond Wipes International Inc. “Flushability,” and the biodegradability of substrate are more important than ever with the focus on sustainability.

Skin Care and Such

Baby-soft skin doesn’t always come naturally. From skin care to sun care and all of the pampering products in between featuring value-added ingredients and calming scents, even in a tightened economy, parents have shown they will support these segments.

“New and upscale cleansing and care products, such as calming nighttime products and luxury lotions for mom and baby, helped to grow the segment from 2003 to 2008,” Mintel reports.

Sun care for babies has been an interesting segment in recent years as a heightened concern over sun exposure combined with new recommendations supporting the use of sunscreen on babies and toddlers catalyzed the market for baby sun care products. Euromonitor reports growth of 7 percent in 2008 for baby sun care products and expects it to be the fastest-growing subsegment over the next few years, reaching $176 million by 2013.

Parents are reading labels more than ever and have indicated a strong interest – not yet a preference – for natural and organic products for themselves and their children. Yet while some would argue natural and organic is mainstream in baby care, others are more cautious and see an opportunity not yet embraced.

Randy Osmun, sales and marketing director at Ada, Mich.-based Access Business Group, says, “It seems the young generation – of parenting age – is more concerned about sustainability than other groups, but this has not yet turned into a competitive advantage for anyone in the baby care industry.”