At the Kimberly-Clark manufacturing facility in Paris, Texas, boxes of Huggies diapers move along a conveyor belt.
Laura Buckman | Bloomberg | Getty Images
Let's call it the Covid Baby Bust.
Experts predict a decline in birth rates this year as a result of the coronavirus pandemic, putting pressure on consumer giants that manufacture infant formula, baby food and diapers, the Wall Street Journal reported on Monday.
Barclays predicts that births in China will fall 8% this year, while the Brookings Institute estimates that births in the United States could shrink by as much as half a million, citing the effects of an economic recession, the newspaper said . This is due to the fact that the birth rates in the US and China are already at their lowest levels.
And the births must not just be delayed. The Brookings Report predicts that the permanent loss of income from the pandemic will keep some people from having children even after the crisis ends.
A sharp fall in the birth rate this year means Nestle's Gerber and Reckitt Benckisers Enfamil will have fewer parents buying their baby formula. Pampers owner Procter & Gamble and Huggies owner Kimberly-Clark also saw lower sales for their baby segment as a result.
In recent years, as births have slowed in the US and China, consumer giants have turned their attention to sales of premium baby products. Procter & Gamble, for example, makes diapers that use tape or mimic the fit of pants. Last year, Huggies launched Special Delivery, a premium diaper made from plant-based materials that is free of parabens, fragrances, and elemental chlorine.
Michael Hsu, CEO of Kimberly-Clark, told analysts on the company's latest earnings call that it will focus on growing its baby sales in developing markets where birth rates are higher, like Indonesia.
Lower birth rates haven't stopped some retailers from entering this category. Walmart is betting that its baby walks will continue to drive traffic. And when parents have fewer children, they may be more willing to spend more money on them.
Read more about the predictions for falling birth rates here.