Industria Del Pañal

“The Diaper Industry in the next 25 years”









By Carlos Richer








Richer Investment S.A. CV
-Diaper Consulting Services-







Insight 2005
10 Oct Minneapolis
To talk about the future of an industry is always a challenge for anyone. During my 21 years in the diaper industry I had thechance to attend many seminars; something I noted is that the common denominator whenever somebody talked about forecasting the future was that the average Speaker spent 90% of the time talking about the past (as you know present becomes immediately part of past after the first nanosecond). They spent all this time to present information with great detail, with many tables and beautiful graphs;but when it was time to talk about the future, less than 10% of the session was dedicated to this topic. The reason is quite obvious, no one knows the future! Every time you try to make a prediction about the future you take the risk of being dead wrong. Sales people are very much aware of this fact, especially now! A combination of variables such as extremely limited working capital, evergrowing number of SKU’s and small margins, are forcing diaper companies not only to have good forecasts but excellent ones. As diapers markets are maturing, I predict the need to differentiate will create even more pressure on the small diaper companies. They will have to keep adding more SKU’s in the future in order to serve niche markets.

I expect most diaper factories in the futurewill have to be connected with their clients to exchange electronic information regarding SKU sales and inventory volumes, just the same way the big companies are already doing it. This will happen within the next 3 to 5 years in all of the developed markets; those that fail to be connected with their clients and suppliers will probably perish due to higher inventory costs, production planningconflicts and lack of service to their clients. Sales people will always need a “magic ball” or at least a reliable fortune teller; the size of the ball will be in direct relation to the efficiency of the data exchange system, a data exchange system that may also need to be connected in real time.


Predicting the short term future does not need to be so difficult, as we have seen,being able to look years into the future is a bit more complicated. Well, I am planning to break the tradition. I will spend less time talking about the past, and a larger amount of time talking about the future of the diaper industry. As a personal reminder of this challenge, I changed the color of the ink every time I talk about the future. Because this is a written document, for sure youwill know how ignorant I was (a fair chance), or if at least if I could have a good career at selling fortune cookies.

Let us start with a quick review of the past:


The need for diapers has always existed. In America there were many old civilizations that used them; the Incas, the Aztecs, Native Americans and even the Innuits in Alaska used some primitive version of a diaper. Thereare also a few references about the use of diaper predecessors in Europe and Asia. Mass production of cloth diapers started by mid 19th century; mass production of disposable diapers officially started until 1961 that is only 44 years ago when P&G started the disposable diaper business. Of course we have all heard about the great contribution of Vic Mills, however even when it is much less known,it is important to also mention PauliStróm (the company from Sweden), Marion Donovan (the housewife inventor), Stanly Mason (another inventor), Billy Gene Harper and Carlyle Harmon (from the Dow and the J&J companies), and many others, all of which have contributed to the development of the modern disposable diaper. A lot has happened since 1961; however I believe the most important events in...