Kimberly-Clark Corp.'s Huggies has lost U.S. diaper market share steadily throughout this decade's slow economic recovery. Now, having concluded that economic improvements aside, value consciousness is here to stay, K-C is fighting back with a new focus on how long its diapers last for the money.
A re-launch of Huggies Snug & Dry, the brand's biggest and least-expensive line, now touts "12 Hour Protection" and improved absorbency. While many parents will change diapers much sooner, the new claim is meant to drive home the value parents get for their money, said Giusy Buonfantino, president of North America Baby & Child Care in an interview.
"We're focusing on what more value-minded moms want from diapers, which is really the best protection at the best value," Ms. Buonfantino said. "So you'll see a lot more clarity on the products, on the packaging, on claims."
She estimates that around two-thirds of moms in North America are "value moms." Hispanic moms, a key constituency, are more likely to fall into this group, though they're also very brand loyal, she said.
Online at Amazon.com or Target.com, the new Snug & Dry sells at just under 21 cents per diaper with a "Subscribe & Save" discount on a 192-count Size 4 pack. That compares to 24 cents for Pampers Baby Dry diapers from rival Procter & Gamble Co., though P&G's Luvs remains cheaper still at 17 cents.
The Snug & Dry relaunch includes an "Ultra" product sold exclusively at Walmart and Walmart.com, with a "unique quilted liner" that promises to lock away moisture better than regular Snug & Dry. Ultra is priced as low as 22 cents per diaper for Size 4 at Walmart.com. A new TV ad for that product line launched on Monday promises "ultra protection at an ultra value." Even at a small premium to Amazon or Target subscription versions, it still costs less than 2 cents an hour, if you push it to the max. Prior Snug & Dry "Baby Yoga" ads focused more on fit and comfort, though even the new value-focused Walmart spot mentions "Ultra Hugs."
The reality is that e-commerce not only is growing fast, but it's also making parents even more aware of what they're paying per diaper, because the price is often listed that way, Ms. Buonfantino said. Because e-commerce sites and the mobile web are where millennial moms often get their diapering information, Huggies is also stepping up digital content and advertising, she said.
Huggies also will improve skincare and comfort for its more premium Little Snugglers and Little Movers diapers, Ms. Buonfantino said, because it recognizes it's dealing with a "bifurcated" market where the middle class has dwindled and more people are trading down or up.
"Even in the same basket, people may have a more premium and more value-priced diaper," she said "They give the value diaper when they send their kids to daycare, because the school will mix and match among parents, and reserve the super-premium for home or special occasions when the relatives come."
Speaking on K-C's earnings conference call Tuesday, where a "mid-single digit" decline in North American diaper and training pants sales were a drag on otherwise strong 5% global organic sales growth, Chairman-CEO Tom Falk said revamped Snug & Dry should be largely in place on store shelves by the end of the month, with new advertising following shortly.
But he's not banking on lower gas prices to free up money for diapering. "A lot of retailers I've talked to have said that a lot of the lower fuel price has either been saved or has been spent inside the gas station buying an extra cup of coffee or something like that," he said. K-C's organic diaper sales rose by "high teens" percentages in developing markets, which he said collectively are more than 1.5 times the size of its business in North America.