Premiumness, sustainability and holistic approach: which is the game changer?
The disposable hygiene market is thriving like never before. The pandemic has spurred a moment of acceleration for the industry, fueled by record-high at-home demand and hygiene concerns. Retail sales grew by 2% in 2020, hitting 104 billion US dollars globally. Nonetheless, growth has been lagging in developing countries, where spending for disposable hygiene products actually decreased, marking a shift towards more low-priced goods.
According to forecasts by Euromonitor, the sector will keep expanding at an accelerated pace, mainly driven by two factors: developing countries catching up and adult incontinence products booming in regions where the population is ageing rapidly.
What segment is the trendsetter of the disposable hygiene market?
In 2015-2020, the adult incontinence segment has grown the most within the hygiene industry due to rising living standards, improved consumer awareness and greater product variety.
Speaking of purchasing power, most of it will come from people aged 40 to 44. This group already represents 10% of the global average gross income and will become the biggest by size over the next ten years.
The baby segment is, to a certain extent, stable. It's not nearly as fast-growing as Adult Inco. Yet, when we take value and volumes into account, it definitely is the strongest one.
A main driver of the baby market is millennials. They differ a great deal from older generations, as they are tech-savvy, green-conscious, information-hungry and in want of premium products that offer mass personalization.
Femcare is on the rise due to lower social stigma and higher living standards, especially in emerging markets like India, Indonesia, Nigeria and Vietnam.
Speaking of age groups, millennials and Gen Z are a force to be reckoned with. It is estimated that 15% of all millennial women use washable underwear while 12% use period cups. Sustainability is a mounting concern for millennials and Gen Z, most of which are willing to pay more for environmentally friendly products.
2021 disposable hygiene trends
The rise of affordable premium and super premium
With millennials and Gen Z entering the market, disposable hygiene has been reshaped into two macro-categories: affordable premium and super premium.
Millennials and Gen Z are different from previous generations. They are willing to spend hours online scouting for the perfect product and once they put in work, there's no talking them into down-trading. Also, they want value for their money. Last but not least, they care more about the environment than baby boomers and generation X.
As a result, many players in the market have modernized their offer to meet these preferences.
Affordable premium has quickly become a magnet for DTC (direct-to-consumer) brands and private labels. This is a new prominent category, defined as intermediate between affordable and what was once described as premium.
The meaning of affordable premium depends on the segment. In baby hygiene, affordable premium brands feature elements such as colorful design, joyful packaging, bundles, home delivery, money back guarantee, plant-based ingredients and cause marketing.
In the adult market, claims like leak-free, superior absorbency, high-performance, skin-safe, 100% breathable materials and eco-conscious are common, together with a stronger focus on wellness and body-positivity.
Much like the adult inco market, femcare values high-quality, but gives a greater importance to sustainability and "making a difference" with fighting social stigma and championing menstrual health and pride.
All these products, be they for the baby, adult or femcare segment, are mainly sold online or through exclusive distributors. In this arena, younger direct-to-consumer brands have a clear advantage over established, heavyweight players. They are social-savvy, online-first and they have the innocence of youth. Over all, they can be laser-focused on a specific niche, without the headache of managing an international brand. Because of this, they can offer products that are almost on par with those of institutional brands but market them at a lower, more affordable price tag, targeting middle-income consumers who look for convenience without compromising on quality.
Super premium identifies with luxury. It is an upper-premium category for wealthier pockets that, being less price-sensitive, are willing to spend more for a top-quality, extra sustainable, wellness-centric product. Super premium is often synonymous with superior raw materials, organic cotton and more value-added features.
Other popular claims include extreme softness, unmatched thinness and flexibility and the presence of "natural" plant-based ingredients. The super premium segment is key for established brands, as it delivers on value sales growth in a context of volume decline.
Sustainability remains top of mind
COVID-19 has heightened the urge for a more wholesome lifestyle. Hygiene and wellbeing are now top priorities. Customers are no longer content with vague corporate claims. They want facts. Natural and organic features are in high demand, especially in the super premium category. Recycling and reusability are taken into high account and so are wearables that promise to reduce carbon pollution.
Corporations are tackling the sustainability issue from various angles, starting with product innovation. Greater and greater attention is being paid to labels such as "chemical-free," "natural" and "toxic-free", as companies modernize their offer in line with the ever-changing market trends. Eco-friendly ingredients have become crucial: featuring plant-based, bio-based polymers is now common practice for private labels. That said, enterprises must always strike a balance with performance, since consumers are not willing to sacrifice quality for sustainability.
High-tech solutions also play a role, especially in adult inco. That is the case of smart sensors that can be printed or attached to the outside of the diaper. These sensors provide real-time measurement of the wetness of the diaper and share the data with caretakers, enabling not just a solution to incontinence but also wellness from a broader point of view.
The emergence of holistic brands
Key to this market evolution is the advent of holistic brands. The game has changed. Consumers want brands with a voice - a personality, so to speak. They want to be protagonists in the brand’s storytelling. They no longer buy the product per se, but what the product means from a broader point of view, which includes how the company operates on a global scale beyond the mere product on sale.
Customers, millennials and Gen Z in particular, expect to have control in all aspects of the product, from selection to the end of life. They look for brands that offer mass personalization, inclusivity and are ready to go the extra mile for corporate responsibility. In line with this, companies are increasingly switching to a product offer that is no longer limited to their bestsellers, but also incorporates a holistic set of goods, even outside of their primary know-how. As an example, many players in baby hygiene now also sell beauty and personal care items.
Omnichannel is the cornerstone of this new way of looking at brands. Consumers demand personalized experiences, customizable bundles and tailored shopping suggestions. They expect a seamless integration between the offline and online world, with lines for pickup in store and shop assistants recognizing them without ever interacting with them. Digital is not just advertising: it's education, discovery, shoppable quizzes, customer stories, recommendations. But now more than ever, it’s an opportunity for brands to capture a new audience that during the pandemic has been exposed to different products and services online.
In this context, inclusivity is an enabler, as it makes personalization possible for more. To engage this new breed of shoppers, companies are focusing on branding that puts the customer at ease, with more discreet looks, BIPOC, transgender and LGBTQ+ testimonials and, last but not least, expanded sizing for a wider range of body shapes. The key here is fighting stigma that is often associated with this market, e.g. period, incontinence, leakage and larger body sizes.
Why choose GDM as a partner
In such an ever-evolving market, GDM is a reliable partner. Keeping in mind our customer needs, we have developed solutions to cover the main market trends: from the Extra Thin Core solution for thin products to In Line Laminated Waistband for better comfort until the Expandable Welding Wheel for a superior welding quality in pant format, without forget sustainability.
Whether you're a first-timer or a long-time player in the field, we can help you find your voice in the disposable hygiene market. Just get in touch and we’ll be by your side.