Consumer companies to drive away a Kovid child

Huggies brand diaper boxes run with a conveyor belt at the Kimberly-Clark manufacturing facility in Paris, Texas.

Laura Buckman | Bloomberg Getty Images

Call it Kovid Baby Bust.

The Wall Street Journal reported on Monday that experts are forecasting a drop in birth rates as a result of the coronovirus epidemic, putting pressure on consumer giants who make baby formula, baby food and diapers.

Barclays predicts that births in China will fall 8% this year, while the Brookings Institute is predicting that US births may shrink by half a million, citing the impact of an economic downturn. It already falls to its lowest level on record as a birth in the US and China.

The steep decline in the number of births this year means that there will be fewer parents buying their baby formula in Enfamil of Nestle’s Gerber and Reckitt Benckiser. Pampers owner Procter & Gamble and Huggies owner Kimberly-Clark may also see lower sales for their baby segment as a result.

In recent years, as births have slowed in the US and China, consumer giants have focused their attention on selling premium baby items. Procter & Gamble, for example, is making diapers that use tape or mimic the fit of pants. Last year, Huggies introduced Special Delivery, a premium diaper made from plant-based materials and free of parabens, fragrance and elemental chlorine.

Kimberly-Clark CEO Michael Hsu told analysts on the company’s latest earnings call that it would focus on increasing sales of its baby in developing markets where the birth rate is as high as Indonesia.

The low birth rate has not stopped some retailers from trying to gain a foothold in the category. Walmart is betting that its child corridors will still drive traffic. And if parents have fewer children, they may be willing to spend more money on them.

Read more about predictions of falling birth rates here.


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