Making Financial Headlines · Page 1
Fewer Babies, More Expensive Diapers
· New York time
Americans are having fewer babies, while some parents are spending more on each child, including premium diapers. Procter & Gamble's chief financial officer summarized the business logic: “Fewer babies in each household means parents spend more per baby.” The nursery has apparently acquired a premium membership tier. For consumer companies, this creates a different growth problem from simply selling more units to more families. Higher spending per child can help support sales even when the number of potential customers is under demographic pressure. That is an opportunity for premium products, not proof that every household has extra money or wants a luxury version of every necessity. The distinction matters for assessing the business. A company can pursue higher prices and richer product mixes while still facing limits on how many diapers a smaller generation will need. Premium positioning cannot persuade an infant to become two infants, however ambitious the marketing department. For parents, the trend turns an ordinary recurring expense into another arena of product comparison. Absorbency still has a practical job to perform, even when the packaging appears ready for a fragrance counter. Demography may be shrinking the customer base; branding is working diligently on the basket size.
Read this story in the full newspaper →Satire. Not factual reporting. Read the original reporting from the linked publishers.