Makers of infant formula and diapers are girding for another possible Covid-19 challenge: fewer babies.
Birthrates have been declining for years in the U.S. and China, and new projections suggest that the coronavirus pandemic could lead to hundreds of thousands of fewer births in the coming months. A drop in new arrivals could spell trouble for makers of infant products, who have been developing new lines and shifting their focus to other products, analysts and executives say.
“What we have seen in the pandemic, particularly in the U.S., is a decline in birthrate,” Laxman Narasimhan, chief executive of Enfamil maker Reckitt Benckiser Group PLC, said on an investor call last month. To buoy sales, Mr. Narasimhan said Reckitt has been expanding its nutrition category to include a focus on elderly people’s health.
The company, which also makes milk supplement Sustagen, last month warned that fewer births in China—about half the global baby-formula market—as well as the U.S. could hit its baby-feeding business next year.
U.S. government data for 2020 birthrates won’t be available until next summer. Mr. Narasimhan in an interview said Reckitt has its own birthrate projections and has also noted figures from the Brookings Institution.