You've Come a Long Way Baby

December 9, 2005

From all natural ingredients to age-specific products, the baby care market continues to evolve.

Although the baby care market wasn't exactly booming in the past year, it did see a slight increase of 1.5% to $374.9 for the year ended June 12, 2005, according to Chicago-based Information Resources, Inc. (IRI). These sales exclude Wal-Mart. Baby lotions experienced the biggest gain, reaching $49.2 million, a 6.6% rise compared to the year earlier. Johnson & Johnson held onto the No. 1 spot with sales reaching $18.9 million. Aveeno baby lotions came in second, with Playtex Baby Magic Baby Lotions taking third place. Gerber's newly introduced Grins and Giggles Baby Lotions came in fourth. In the baby oil sector, sales declined 5.5% to $35.6 million.

According to Euromonitor International, value salesgrowth continued to slow in 2004, mostly due to the struggles of baby hair care products. Other areas such as baby sun care enjoyed accelerated gains due to favorable weather and new product introductions. Child births remained high during 2003, but a slowed economy and competition between manufacturers helped depress sales.

The Natural Approach

According to Euromonitor, parents found increasing confidence in products that were made with natural ingredients in 2003 and 2004. Highlighting natural ingredients helped many new product introductions define their qualitative superiority and justify higher prices. Aromatherapy offerings were logical extensions of the natural products trend. Many of the aromatherapy offerings included lavender, believed to relax and soothe babies. Avon, BeBe Michele and Johnson & Johnson all launched baby care products with lavender in 2003, followed by Vi-Jon Laboratories, which introduced a private label line of baby products featuring lavender for Wal-Mart in 2004. This past year, Playtex launched a Baby Magic Extension with milk moisture complex, chamomile and lavender.

"Consumers are demanding more natural baby care products," commented Virginia Lee, senior research analyst for Euromonitor. "Strong consumer demand for organic and natural products in packaged foods as well as adult personal care is translating into increased demand for natural and organic baby care products as well."

Adena Michelle, creator of Nature's Baby, started her line because she couldn't find any products on the market that were gentle enough for her daughter, who suffered from allergic reactions to dyes, perfumes and chemicals commonly found in baby products. Nature's Baby products is a line of 100% natural skin care products for babies and kids rich in organic ingredients, essential oils and moisturizers like shea butter and kukui nut oil. The line includes a shampoo/body wash, conditioner, lotion, diaper creme and diaper pail deodorizers. The line debuted in high-end children's boutiques last year.

The Big Picture
Below are total sales for the year ended June 12,2005 (excluding Wal-Mart) in a few of baby care’s categories. Sales and units are in millions.
Category $ Sales % Change Unit Sales % Change
Baby Lotions 49.2 6.6 16.0 5.0
Baby Oils 35.6 -5.5 14.1 -3.8
Ointments/Creams 77.8 4.2 16.1 3.5
Baby Powder 56.0 -0.1 22.9 0.8
Baby Shampoo 32.0 -1.8 11.9 -0.1
Baby Soaps 82.1 4.0 26.4 5.5
Petroleum Jelly 42.3 -2.7 19.7 0.9
Total Baby Care 375.0 1.5 127.2 2.0
Source: Information Resources Inc., Chicago.

Going Organic

In March, Jason Natural Products, Culver City, CA, partnered with Earth's Organic Best, an organic baby food manufacturer, to launch Earth's Best Organic Baby Care by Jason, a 70% organic baby care line that combines the purest, gentlest ingredients to cleanse and care for babies' delicate, sensitive skin and scalp. All products are free of mineral oils, petroleum, drying alcohols, PABA, isopropyl palmitate, laurel/laureth sulfate, aluminum chlorohydrates and other irritants, according to Jason executives.

The line contains six products: Lavender Tear-Free 2-in-7 shampoo and body wash, Lavender Everyday Calming lotion, Calendula Extra Rich Therapy creme, Diaper Relief ointment, Chemical-Free sun block, Multipurpose Baby oil and Organic Baby Body Care travel kit. The products are sold in natural/health food stores and nutrition centers. "Our typical baby body care consumer is a mother, aged 30 and up, who purchases her baby organic baby food because she knows the benefits of organic food, as well as wants the best for her baby's skin and knows that a natural and organic product can provide this," commented Angella Green, associate brand manager, Jason Natural Cosmetics.

According to Ms. Green, Chemical Free sunblock SPF 30+ is currently the company's best seller. "As the weather warms up, parents want to protect their baby's delicate skin from the sun without chemicals. This fragrance- and paraben-free mineral sunblock is enriched with beta glucan. oat oil and lavender extract, so it not only protects but also soothes."

Hair Care for Babies

Recognizing the potential growth in the hair care market, Santa Monica, CA-based Circle of Friends recently launched a new line of shampoos, conditioners and styling products for children, created exclusively for professional hair salons. Designed for boys and girls ages 2-8, the line includes products that are made with botanicals and fruit extracts, vitamins and antioxidants. They are specially formulated for children's sensitive skin and are tearless and free of sodium lauryl/laureth sulfate. The products come in fun fragrances such as Bonita's Banana and Chehn's Mandarin Orange, and are bottled in playful, kid-friendly packages featuring multicultural characters from around the world. Circle of Friends teaches lessons about tolerance and diversity.

The Past, Present and Future
  1999 2004 2009
Baby bath products 135.2 197.5 228.3
Baby hair care 123.9 149.0 150.2
Baby skin care 175.5 206.6 221.2
Baby sun care 87.5 114.9 133.7
Source: Euromonitor International (in millions)

Line Extensions

Although Playtex didn't launch any new baby care products in 2004, it did extend its already existing Baby Magic line with the introduction of Baby Magic Botanicals lotion and Baby Magic Botanicals Hair & Body wash. Both products contain mild and gentle ingredients derived from nature. The formulas are enriched with a unique blend of natural botanicals in purified water to help replenish skin's natural moisture.

Johnson & Johnson extended its popular Bedtime line with two new products to help moms take care of baby's skin and help baby settle down for the night. Johnson's Bedtime Cream wash creates a nourishing, moisture-rich lather to gently cleanse, while chamomile and lavender soothe and relax. Johnson's Bedtime cream also contains the calming ingredients while moisturizing skin all night.

In January, Johnson & Johnson also introduced Johnson's Buddies Bathtime products for toddlers, a complete line of easy-lather, easy-rinse, easy-comb hair and body products specifically designed for toddlers. The seven products come in packages specially designed for little hands, sport whimsical, fun cartoon designs and are toddler- friendly.

"Our customers have told us that Johnson's Buddies products fill a real need for them," said brand representative Yann Pigeaire, Johnson & Johnson Consumer Products Company. "Our research shows, for example, that when babies become toddlers, parents put away baby shampoos and use shampoos that are formulated for adults, which can be inappropriate for young children. Johnson's Buddies products give toddlers a line of bath and grooming products that are just right for them-and that's just right for parents."

Packaging for Age

Innovative, child-friendly packaging and age-specific products are two of the trends that are emerging in the baby care sector, according to industry experts.

"Just as baby food manufacturers have introduced the concept of different baby foods for different stages to keep selling baby food beyond the baby's first year, baby care manufacturers have introduced new products for toddlers in an effort to have parents purchase baby care products after the baby turns one," explained Ms. Lee. "Baby care manufacturers also want parents with children of varying ages to buy a different product for each child."

Earlier this year, Huggies introduced Huggies Bath Mitt, which is soft and thick like a wash cloth and infused with built-in Watermelon Splash body wash. It is sized for toddler hands and do-it-yourself washing, and it is disposable. Parents simply throw out the mitt after each use and use a fresh one. The company also introduced Huggies Disposable Washcloths with Lavender & Chamomile baby wash, which makes it easier to wash baby with one hand.

Pampers new Kandoo line is designed to make it easy for children to develop a bathroom routine of their own. Foaming handwash is designed for little hands and features a large, easy-to-use dispenser pump. Flushable toilet wipes come in a tub that opens easily with the push of a little finger, dispensing a moist wipe, one at a time so no rolling or ripping is required.

The Future of the Baby Care Market

According to Ms. Lee of Euromonitor, premium quality and stylish packaging will become more important in the future.

"2004 ushered in 'yummy mommies'-mothers with sex appeal," commented Ms. Lee. "Last year, we saw extensive coverage of hip Hollywood moms such as Gwyneth Paltrow, Julia Roberts and Debra Messing who liked to show off their 'bump' in a $175 pair of maternity jeans. Mothers who can afford designer maternity jeans will also want beautifully packaged baby care products that are pleasing to the eye as well as pampering to baby. In general, both todays' parents and children are more style conscious than previous generations."