Procter & Gamble making diapers for tiniest bottoms

The target market for Procter & Gamble Co.'s newest diaper is small. Very small.

Of the nearly half a million infants born prematurely in the United States each year, roughly one in eight are deemed "very pre- term," and usually weigh between 500 grams and 1,500 grams (one to three pounds). Their skin is tissue-paper-thin, so any sharp edge or sticky surface can damage it, increasing the chance of infection. Their muscles are weak, and unlike full-term newborns, excessive handling can add more stress that in turn could endanger their health.

Tiny as they are, the number of premature infants is increasing -- partly because of improved neonatal care: From 1985 to 2000, infant mortality rates for premature babies fell 45 percent, says the National Center for Health Statistics. Increasingly, such babies are being born to older or more affluent women, often users of fertility drugs, which have stimulated multiple births.

It's a testament to the competitiveness of the $19 billion global diaper market that a behemoth like Procter & Gamble, a $40 billion consumer-products company, now is focusing on a niche that brought in slightly more than $1 million last year; just 1.6 percent of all births are very pre-term. But P&G sees birth as a "change point," at which consumers are more likely to try new brands and products. Introducing the brand in hospitals at an important time for parents could bring more Pampers customers, the company reasons.

P&G's Pampers, which is gaining ground on rival Kimberly-Clark, but still trails its Huggies brand, has made diapers for premature infants for years. (P&G introduced its first diaper for "preemies" in 1973; Kimberly-Clark in 1988), but neither group had come up with anything that worked well for the very smallest of these preemies.

The company that currently dominates the very-premature market is Children's Medical Ventures, Norwell, Mass., which typically sells about four million diapers a year for about 27 cents each. The unit of Respironics Inc., Murrysville, Pa., has been making its "WeePee" product for more than a decade. But the company, which also makes incubator covers, feeding tubes and extra small bathtubs for preemies, hadn't developed certain features common in mass-market diapers, such as softer fabric coverings.

By contrast, P&G's preemie diapers, which it started distributing to hospitals in August, sell for about 36 cents each; about four cents more than P&G's conventional diapers. P&G's "Preemie Swaddler" fits in the palm of an adult's hand and has no adhesives or hard corners. It closes with mild Velcro-like strips and is made of breathable fabric, not plastic. It has an extra layer of fabric close to the infant's skin to avoid irritation.

Children's Medical Ventures is coming out with another size of the WeePee, and plans to introduce Velcro-like closures, a development the company says was in the works before P&G came out with a rival diaper. The new diapers won't cost any more, Children's Medical Ventures says.

P&G says the new diaper is the natural extension of its Baby Stages initiative, which took effect in February 2002 when P&G revamped its Pampers brand in the United States to cater to various stages of a baby's development. Working with very small preemies helps the company better understand infant development and become "more attuned to new products they might need," says Deb Henretta, president of P&G's global baby-care division.

But the marketing director for Children's Medical Ventures believes the increasing affluence of preemie parents is a greater inducement for big companies to enter the market. In the past, the typical mother of a preemie was poorer, often a teenager, but today more preemie "parents tend to be older, well-educated, and have money for things like fertility treatments," says Cathy Bush, marketing director for Children's Medical Ventures.

The competition may raise the bar for the quality of diapers for these smallest of preemies. P&G says the parents of premature babies are demanding better products. "They have much higher expectations than they did years ago," Henretta says.

Neonatal nurses have all sorts of opinions about the relative merits of Preemie Swaddlers and WeePees. Pat Hiniker, a nurse at the Carilion Roanoke Community Hospital in Virginia, says the new Pampers diaper, while absorbent, is too bulky for small infants. Allison Brooks of Alta Bates Hospital in Berkeley, Calif., says P&G's better absorbency made the babies less fidgety when they needed to be changed. "That sounds small, but you don't want them wasting their energy on squirming around," she says. "They need all their energy to grow."

In any case, if health professionals have their way, the very- premature market will shrink, or at least stop growing. The March of Dimes recently launched a $75 million ad campaign aimed at stemming the rise of premature births. P&G is donating 50,000 diapers to the nonprofit organization.

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