Kimberly-Clark takes hit on Huggies
Kai Ryssdal: Here’s today’s commodities story: diapers. Setting aside all scatological references, inflation’s probably not the first economic phrase that comes to mind when diapers are mentioned. But today, the consumer goods giant Kimberly-Clark reported a steep drop in quarterly profits. It’s been clobbered by rising costs of commodities like wood pulp and oil.
Marketplace’s Jennifer Collins has more on the diaper index.
Jennifer Collins: Nine out of 10 babies in North America wear disposable diapers.
Luvs commercial: What happens in diapers should stay in diapers.
What happens in diaper prices goes far beyond babies — to commodities.
Andrew Urban is a diaper consultant. He’s been in the business for 30 years, and he’s got the punch lines to prove it.
Andrew Urban: My career reached a new bottom right?
Urban explains:
Urban: The absorbency in a diaper is really due to super absorbent polymer, which is a petroleum-based derivative.
In other words, it comes from oil. Diapers also contain polypropylene and polyethylene — also from oil.
Ian Butler: Every one of those things, the price is going up.
Ian Butler is an oil products expert.
Butler: They’re slamming increases through as best they can.
Kimberly-Clark says the cost of raw materials will more than double this year. So that big box of Huggies will cost a few extra dollars. Butler says Pampers and Luvs are likely to get more expensive too.
Steven Chercover: The fact is, inflation’s back.
Steven Chercover covers wood products for D.A. Davidson & Company. Fluffy wood pulp is also a staple in diaper production. And its price has been spiking as well. But Chercover says consumers will take the hit.
Chercover: Assuming you love your kid, you’re just not going to scrimp on that.
He says even if parents switch to cotton diapers — cotton, too, is at record highs.
I’m Jennifer Collins for Marketplace.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
