Diaper-wearing baby boomers are coming to the rescue of the beleaguered paper industry.
As the world population ages, sales are climbing for absorbent hygiene products that have gotten more comfortable and discreet. Demand is projected to grow four per cent in 2017, according to ERA Forest Products Research, boosting prospects for companies including International Paper Co. and Domtar Corp. They’re expanding production of the moisture-capturing fibre known as fluff pulp used in diapers and tampons.
The shift is providing welcome relief for an industry hurt by the emergence of the digital era and paperless communication. As North American producers expand output of fluff grades, the market for traditional pulp is tightening. Prices have been rising in recent months with more gains expected, according to Bloomberg Intelligence.
U.S. retail sales for products targeting adult incontinence reached almost US$2 billion in 2016 and are projected to rise another nine per cent in 2017 and eight per cent in 2018, said Svetlana Uduslivaia, the head of industry research at Euromonitor International.
In 2012, there were 562 million people globally ages 65 and older, and that increased almost 10 per cent by 2015, according to the U.S. Census Bureau. As the baby boomers — those born from 1946 to 1964 — join those ranks, the growth will accelerate. The population of older people is projected to reach 1.6 billion by 2050. In turn, demand for fluff pulp will grow at about three per cent a year, Domtar estimates.
Demand for traditional paper has been eroded by increased digitization, as people turn to e-readers and emails instead of books, letters and memos. North American printing and writing paper demand has been shrinking since 2001 and dropped 3.9 per cent in 2016, according to Bloomberg Intelligence.
"The majority of the business is in secular decline, at least on the paper side," Nicholas Estrela, a spokesman for Domtar, said. "We don’t consider ourselves anymore as papermakers. We’re fiber innovators."
As incontinence products improve, the market could continue to grow.
A quarter to a third of men and women in the U.S. suffer from urinary incontinence, according to the Urology Care Foundation. Today’s adult diapers are more sophisticated than the bulky, more "clinical-looking" products of the past, Euromonitor’s Uduslivaia said.
"People don’t necessarily feel like they’re old," Uduslivaia said. "They want something that not just helps them to get that level of protection, but is really sort of discreet and dignified."
— Bloomberg News