Though the shortages may be hard on some retailers, industry analysts say they're good news for the Pampers brand and create strong momentum for P&G's October launch of Pampers Premium.
Thanks largely to Pampers Stretch, Pampers overall unit volume is up 10% over 1994 and has reached its highest level in two years, a spokesman said. In response to unexpectedly strong demand, P&G placed retailers on allocation and expedited the addition of four new manufacturing lines.
The line of stretching, gender-specific diapers contributed to impressive dollar market share figures for Pampers in July, said analyst William Steele of Dean Witter Reynolds, San Francisco. Pampers gained 1.2 points over a year ago to a 27.1% share, the brand's highest level since 1993. Combined with a gain for Luvs, that helped P&G edge Kimberly-Clark Corp. in overall diaper and training pants market share, at 39.2% vs. 37.7%, for the first time this year.
The July figures still don't outstrip gains by Kimberly-Clark's Huggies for the year to date, during which the marketer has wrested overall category leadership from P&G for the first time, with a 39.3% share vs. P&G's 37.3%. But analyst Holly Becker at Smith Barney, New York, said: "You're finally seeing favorable comparisons [for P&G] after several difficult quarters."
P&G ran page ads, via D'Arcy Masius Benton & Bowles, New York, in USA Today and local newspapers in the New York, Washington, Boston, Philadelphia, Detroit, Minneapolis and Cincinnati markets on Aug. 30 asking consumers not to blame retailers for shortages of Pampers Stretch.
"Procter told retailers going in they knew it would be tight, but they thought they had enough safety stock coming to match the rollout," said independent consultant Burt P. Flickinger. P&G should be able to address any shortages within the next few weeks, he said.
The shortage was a gamble that P&G had to take considering the competitive environment where, Mr. Flickinger said, Kimberly-Clark has beaten P&G with the last several new-product initiatives, and even smaller brands and private labels are introducing better products, bolder packaging and diapers featuring licensed characters.
Stretch's success is probably due to February price and package count reductions, an increase in consumer advertising and P&G being "a little more aggressive on the promotional side of the business," Mr. Steele said.
One analyst expressed surprise at the strong showing of Stretch, saying P&G officials privately talk of the product, introduced last fall, as little more than "evolutionary" and tout the Pampers Premium line as the company's major innovation.
Pampers Premium will roll out nationally Oct. 2, P&G told Advertising Age, with a campaign from DMB&B.
The new product should effectively close Pampers' technology gap with Huggies, industry analysts and competitors say.
Pampers Premium, like the Huggies Supreme line, is a unisex diaper with a quilted, clothlike feel. Both diapers stretch, though the Huggies top-line product is more elastic. And where Huggies Supreme has Velcro fasteners, Pampers will have a combination of tape and Velcro-like Thomas hooks