THE ART AND SCIENCE OF DIAPER MANUFACTURING

Swara Baby Products Private Limited is the leading contract manufacturer & associated with all the major brands in India. Since their entrance to the Hygiene market in 2002, manufacturing has been their strong suit. One of their strengths is their commitment to strict quality processes and a team that keeps up with evolving technology and industry trends. With a passion to create the most comfortable products of the finest quality, they are third-party manufacturers for India’s leading brands like Pampers, Himalaya, Huggies,Amazon, Mother Care, D-Mart, Flipkart, and Pigeon.

TBD: Could you kindly introduce us to Swara products?

Mr. Alok Birla: Certainly! Swara is a thriving six-year-old company that embarked on its manufacturing journey in 2018. Initially, we focused on crafting baby diapers, starting with a single production line. Today, we've grown to boast 14 lines, expertly producing a diverse range of products, including diapers, adult diapers, napkins, and many more.

TBD: What is your business model - do you have your own brand or focus on contract manufacturing?

Mr. Alok Birla: Our core strength lies in manufacturing, so we've strategically chosen to specialize in contract manufacturing. We've intentionally avoided venturing into branding, recognizing it's not our area of expertise. Instead, we proudly serve as an Original Equipment Manufacturer (OEM) for numerous renowned brands, including Pampers, Huggies, Himalaya, ITC, Flipkart, Amazon, Vishal Megamart, DMart, and Patanjali, among others - currently supporting over 20 esteemed brands.

TBD: How do you collaborate with clients on product specifications - do they provide them, or do you assist in defining them?

Mr. Alok Birla: We enjoy a collaborative relationship with our clients, where some, like Pampers and Huggies, share their precise specifications with us. Meanwhile, others, such as Himalaya, Flipkart, Amazon, and Patanjali, may have a general understanding of their product requirements. In these cases, we leverage our expertise to guide them in defining specifications and designing a product that meets their unique needs. Our comprehensive in-house R&D, design, and testing capabilities enable us to provide tailored support, ensuring the final product exceeds their expectations.

TBD: What are your thoughts on the challenges associated with sourcing different raw materials? Do you encounter difficulties in procuring them?

Mr. Alok Birla: The Indian baby diaper industry, being highly competitive, presents unique challenges. To stay competitive with established brands like Pampers and Huggies, manufacturers often prioritize cost reduction. However, this can lead some to compromise on quality by bypassing essential protocols and standards. At Swara, we steadfastly prioritize quality, recognizing the sensitive nature of baby care products. We meticulously source raw materials from trusted, qualified suppliers, ensuring they undergo rigorous lab testing and certification. Our commitment to quality is unwavering, and we maintain a unified inventory for all clients, guaranteeing consistency and excellence in the products we supply. This, in turn, empowers our partner brands to confidently assure quality in the market.

TBD: What price points do you operate at, and how do you maintain your profit margins?

Mr. Alok Birla: With our extensive capacity of 14 production lines, we benefit from economies of scale, enabling us to achieve higher volumes than manufacturers with fewer lines. This strategic advantage allows us to negotiate more favorable raw material prices, offer competitive pricing for our finished goods, and ultimately enjoy comfortable profit margins. Our efficient operations and bulk production capabilities create a winning formula for sustainable growth and profitability.

TBD: What challenges do you encounter when importing raw materials?

Mr. Alok Birla: Currently, we import only two essential materials - Super Absorbent Polymer and Fluff - while sourcing all other high-quality materials domestically at competitive prices. We've found that alternative materials, like ADL, aren't crucial for our products and are only used when specifically requested by clients. Instead, we utilize innovative mechanical processes to optimize liquid distribution and target area absorption. Similarly, we've replaced Airthrough with our proprietary Feelsoft technology to achieve unparalleled softness in our products. By doing so, we've streamlined our import process and minimized reliance on non-essential materials.

TBD: What's your outlook on the Indian market's trajectory over the next 5-10 years?

Mr. Alok Birla: The Indian market is poised for significant growth, with penetration levels already rising from 3% to 8-10% in just five years. This surge can be attributed to innovative products like Unicharm's Mamy Poco Pants, which disrupted the market and empowered local players. Notably, in this industry, the buyer isn't always the end-user, so brand reputation and reliability play a crucial role in purchasing decisions. Our experience manufacturing for esteemed brands like Huggies has given us a unique edge, allowing us to capitalize on the growing demand for private labels.

As prices continue to decline, market penetration is accelerating, with daily demand increasing by 30 lakhs diapers. This growth can be attributed to factors like population growth, decreasing price points, rising aspirational values, and increased purchasing power. The baby care market is expanding, with the target age group broadening from newborns and 1-2-year-olds to 5-6-year-olds. We're excited about the vast opportunities this growth presents.

TBD: Does the reduction in price point lead to any compromise in quality?

Mr. Alok Birla: While we've made some adjustments to localize our products and accommodate the lower price point, the quality remains remarkably consistent as comparable to our international counterparts. We've struck a balance between affordability and excellence, ensuring our products meet the high standards our customers expect.

TBD: What emerging trends do you foresee in sustainability and biodegradability?

Mr. Alok Birla: In the next 5-10 years, I envision a gradual shift towards sustainability, although biodegradability may not be the primary focus. While we aspire for eco-friendly solutions, the current pace of innovation is hindered by the lack of regulatory pressures and market demand. As biodegradable products come with a higher price tag, manufacturers are cautious in investing in this space, awaiting stronger market drivers and consumer pull.

TBD: What key factors have driven the reduction in price points in India?

Mr. Alok Birla: A combination of factors has contributed to the decline in price points, including the growth of local production, the emergence of new domestic brands, and an increase in demand and supply. Additionally, the streamlined supply chain for raw materials, coupled with the local production of high-quality raw materials, has further reduced costs. While global issues like forex fluctuations and regional disturbances may cause short-term supply chain disruptions, their impact on raw material prices is minimal and temporary. These collective factors have culminated in a more competitive and affordable market for consumers.

TBD: What's your vision for the Indian market's trajectory over the next 5-10 years?

Mr. Alok Birla: The Indian baby diaper market, currently valued at ?10,000-12,000 crores, is poised for remarkable growth, expected to triple to ?30,000 crores in the coming 5-10 years. This expansion is driven by the proliferation of local products and brands, which have created new categories and attracted fresh buyers. The rise of e-commerce has further catalyzed this growth, enabling products to reach semi-urban and rural areas, previously untapped markets. With vast opportunities still untapped, the market invites new entrants to join the journey, innovate, and contribute to its evolution.

TBD: Can you share the production ratio between baby diapers and adult diapers?

Mr. Alok Birla: We embarked on our adult diaper journey two years ago, building on our six-year foundation in baby diapers. Both categories are experiencing growth, prompting us to expand our capacities. Currently, out of our 14 production lines, two are dedicated to adult diapers, with the remaining lines focused on baby diapers. Notably, adult diaper growth is outpacing baby diaper growth.

The Indian personal hygiene market is poised for rapid expansion across all segments. Within the diaper market, adult diapers are still in the early stages but are gaining traction at a faster rate than baby diapers. This trend has caught the attention of multinational corporations, which are now entering the adult diaper market, further validating its potential.

TBD: Do you have a presence in the Feminine Hygiene market, and what are your plans for expansion?

Mr. Alok Birla: While we do have a foothold in the Feminine Hygiene market, our current focus is on consolidating our position in the baby and adult diaper segments, where we've established a strong presence. Our product development is customer-centric, and we're attuned to market demands. As we continue to evolve, we'll explore opportunities in the Feminine Hygiene space, guided by customer needs and market trends.

TBD: Do you offer wipes as part of your product portfolio?

Mr. Alok Birla: Yes, we have expanded our product range to include baby wipes, which come in convenient pull-up pouches. While baby wipes have become a staple in the market, we differentiate ourselves by using high-quality spun lace fabric for our product. This attention to detail ensures our baby wipes meet the high standards our customers expect from us.

TBD: You mentioned partnering with D'Mart, Flipkart, and Amazon. Do these companies have their own in-house brands?

Mr. Alok Birla: Yes, each of these companies has its own branded offerings. For instance, Flipkart's in-house brand, Cuddle, is managed through a leasing arrangement with two partners: one for online sales and another, D'Mart, for modern trade channels. Similarly, we produce Mother Care for Reliance, Baby Hug for First Cry, Supple for Amazon for which we serve as contract manufacturers. This collaborative approach enables us to support the growth of these esteemed brands.

TBD: What technology do you utilize, and are your machines sourced internationally?

Mr. Alok Birla: We're proud to have developed our own proprietary technology, tailored to our specific needs. Our innovative approach extends to our machinery, which we've designed and developed in-house. While our machines are manufactured in China, this is a common practice even among European brands, highlighting the global nature of manufacturing excellence.