• Economic uncertainty is projected to exacerbate already falling birth rates in the U.S. and China, with some predictions showing 500,000 less birth in the U.S. compared to 40,000 less last year
  • Companies that rely on a steady stream of newborns for income are being forced to look elsewhere for new customers
  • Some are pivoting to upscale products, betting that families with fewer children will spend more on them. Others are looking to new demographics, such as the expanding population of the elderly

The COVID-19 pandemic is bad news for more than just the service industry. A projected fall in birth rates has many producers of infant products looking to find new markets.

Birth rates in the U.S. and China have been falling for years, but the economic chaos of the pandemic could drive much steeper falls this year. According to Macrotrends, the U.S. birth rate in 2018 declined 0.95% from 2017, and the 2017 birth rate declined 0.94% from 2016.

It’s not all bad news though. Foreign countries with high birth rates present opportunities for these companies, and many infant product manufacturers can easily shift to serving a booming population of seniors, the Wall Street Journal reports.

Father and baby
Father and baby PublicDomainPictures/Pixabay

Official birth rates won’t be out until the summer, but predictions from think tanks and in-house numbers from the baby industry both look grim.

The Brookings Institution projects a fall of 300,000 to 500,000 births.“We expect that many of these births will not just be delayed, but will never happen," the think tank said.

It’s not the pandemic itself causing the fall. Birth rates are strongly tied to economic prospects which have been savaged by COVID-19’s economic damage. Some predicted at the start of the pandemic that birth rates would rise due to simple proximity between romantic partners during lockdowns, but Brookings notes that this is based on stories of birth spikes following blackouts and blizzards which have proven consistently false.

Companies that rely on infants for income are looking for opportunities to shift toward new markets. Kimberly-Clark is looking to foreign populations, acquiring an Indonesian diaper manufacturer for $1.2 billion in September. Reckitt Benckiser is revamping its nutritional products to sell to adults and seniors.

Other businesses are trying to find new ways to extract income from the customers they have. Nestle has launched an upscale infant formula in China, betting on information that families with fewer children spend more on them.

Pampers and Huggies are both looking to sell upscale diapers, charging several times the base rate for products that are plant-based, modeled like pants or use tape.