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Diapers are not just babies, but also an expanding market. There is a demand from the failed elders above. Companies such as Kimberly Clark, which announced plans to spin-off the international tissue division this week, will benefit from the growth of this marginal revenue stream.
Kimberly Clark is best known for his Huggies Nappy, the Cleannex Organization and Andrex Rull. The $45 billion US group is also the top provider of bladder leak products, holding more than 50% of the US market through brands such as Depend and Prenitud.
This week we announced plans to clean up our portfolio and focus on faster growth and more profitable businesses. There is one adult care. Tissue and lou are sold rolled overseas. Therefore, Kimberly Clark will spin off a majority stake in the international tissue business to Brazilian pulp maker Suzano. The division is relatively small, half as profitable as large units in North America.
This allows you to focus on the advantageous business of drying the bottom. Baby diapers remain Kimberly Clark’s biggest revenue generator. The company sold over $7 billion in disposable diapers, wipes and training pants last year, reaching more than a third of its sales.
Demographically speaking, it is not the young end users who make up the biggest opportunity. Birth peaked in the US at 4.3 million in 2007, and has since declined steadily, with data seen from the Centers for Disease Control and Prevention data. The frugal family is trading with supermarket brands and switched to reusable options and potty training. Baby care products sold at Kimberly Clark last year were lower than in 2022.
One perk of selling absorbent products to adults is that unlike babies, they don’t age from the market. In fact, demographics are a tailwind. Currently, approximately 62 million adults over the age of 65 live in the United States, accounting for 18% of the population. By 2054, one in four Americans will be over 65, according to the Pew Research Center.
According to Euromonitor International, faster than other paper-based household items explains why this part of the market grew globally by 4% last year. By 2029, adult diaper and pad sales are expected to reach around $200 billion, showing a combined annual growth rate of almost 9% over the next five years. If Kimberly Clark is looking for a new look, and it should start with an old customer, as the stock didn’t go anywhere in five years.
pan.yuk@ft.com
