Low Birthrates Have Huge Impact on Manufacturing Companies

 

According to a report from the National Center for Health Statistics, the fertility rate in the U.S. fell by 11 percent from 2007 to 2016. The reason for this is simple - women under 30 are having fewer kids. As a result, fewer people are in the market for products like wipes and diapers, that parents typically buy in bulk.

According to a report from the Associated Press (AP), as Americans opt for smaller families that start later in life, companies like Kimberly-Clark are suffering the consequences. Kimberly-Clark manufactures some of the world's most popular brands, such as Huggies, Cottonelle, and Kleenex. As a result of the shift in demand, the company announced that it would shed about 13% of its workforce or about 5,500 jobs. After all, as company CEO Tom Falk says, "you can't encourage moms to use more diapers ... when the babies aren't being born."

The company is now looking to sell or shutter ten manufacturing plants but does have plans to increase production in other areas.

According to the AP, consumer product manufacturers are also feeling the pressure from higher commodity prices and an increasingly competitive retail market.

According to a report from CNBC, the $12.6 billion diaper market dropped 0.3 percent from 2012 to 2017, which has also impacted other companies, like Procter & Gamble which is behind the Pampers brand.

The decline in birthrate has even spread to Johnson & Johnson, impacting its baby oil and nursing pad business, and Edgewell Personal Care, which manufactures Playtex baby bottles.

As the market continues to change, companies will need to innovate and find new ways to remain competitive in the industry.

Ford Makes Acquisitions Focused on Autonomous DrivingNext Story »

Related