Makers of Diapers and Baby Formula Brace for Lower Sales as Pandemic Leads to Decline in Births

Laura Buckman | Bloomberg | Getty Images
  • Procter & Gamble, Nestle and Reckitt Benckiser are among the companies that could be negatively impacted by shrinking birth rates this year.
  • Experts predict that the birth rate will fall this year because of the coronavirus pandemic.
  • In recent years, as the birth rate has lagged, consumer giants have turned to making premium products to appeal to wealthier parents.

Call it the Covid baby bust.

Experts are forecasting declining birth rates this year as a result of the coronavirus pandemic, putting pressure on the consumer giants that manufacture infant formula, baby food and diapers, The Wall Street Journal reported Monday.

Barclays is predicting that births in China will fall 8% this year, while the Brookings Institute is estimating that U.S. births could shrink by half a million, citing the impact of an economic recession, according to the newspaper. This comes as birthrates in the U.S. and China are already at their lowest levels on record.

A sharp decline in the number of births this year means that Nestle's Gerber and Reckitt Benckiser's Enfamil will have fewer parents buying their baby formula. Pampers owner Procter & Gamble and Huggies owner Kimberly-Clark could also see lower sales for their baby segment as a result.

In recent years, as births in the U.S. and China have slowed, consumer giants have turned their attention to selling premium baby items. Procter & Gamble, for example, is making diapers that use tape or mimic the fit of pants. Last year, Huggies introduced Special Delivery, a premium diaper that is made from plant-based materials and is free of parabens, fragrance and elemental chlorine.

Read more about the predictions for falling birth rates here.

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