Birthrates in the US and China have been falling for years. But COVID-19 has decelerated baby-making even more.
Citing research from the Brookings Institution, the Wall Street Journal reports there will be 300-500k fewer US births in 2021 than if the pandemic never happened.
Throw in China’s projected 8% birthrate drop this year, and things are looking a little poopy-in-the-diaper for one sector in particular:
Baby product makers are pivoting
The US and China account for more than half of the world’s baby formula consumption. To compensate for the coming baby bust, top baby-focused companies are launching pricier products and expanding to other markets:
- Nestle launched an upscale milk powder brand (Belsol), a new formula for babies allergic to cow’s milk, and a line of products for a baby’s “first 1k days.”
- Reckitt is using its formula expertise to launch supplements for adults, noting that it sees “real tailwind in seniors” (now, THAT is dystopian sounding).
- Pampers (owned by P&G) is making up for lower volumes by luxxing up its diapers with shea butter and premium materials.
Holding out for the baby boom
In the US, the birthrate is tied to the labor market, and has been on a slow decline since the 2007-09 financial crisis.
Some companies are looking for relief abroad: The baby goods producer Kimberly-Clark spent $1.2B to acquire a diaper maker in Indonesia, where people are still getting busy like old times.
But for most folks in the baby biz, a vaccine can’t come fast enough.