DRYPERS IS VYING FOR SPACE, DISTRIBUTION

JAMES TENSER

HOUSTON -- Drypers Corp. here is slugging it out with the big boys in the disposable diaper category this month, as it rolls out a revamped product line it hopes will help the brand win broader distribution.

The battle lines are being drawn at the shelf, said Terry Tognietti, co-chief executive officer and president of Drypers North America. Although it cannot match Kimberly-Clark and Procter & Gamble for sheer firepower in the category, Drypers has been vying for more shelf space and a greater ACV distribution in the grocery channel, as well as for a fair share of space at mass merchandisers and drug chains.

"We are now a national brand," said Tognietti in an interview. "We asked ourselves, what do you bring to the category besides better value? Not to underplay the importance of value, but we'd be stronger if we lead the category with innovations."

The not-so-secret ingredient Drypers hopes will set it apart from its well-heeled competitors down the aisle is baking soda, an ingredient that acts as a safe, natural deodorizer on the baby and in the diaper pail.

This month the company is introducing the ingredient across its entire line of diapers and training pants, backed by the most extensive in-store and consumer marketing activities in its history, Tognietti said.

At retail, the program includes everything from redesigned packaging to an in-pack promotion, point-of-purchase materials, rebate pads, in-ad coupons, trade support and off-shelf displays. It is supported by a series of direct mail and marriage mail offers targeted to new parents and young families. While the new products are just reaching stores now, most of the programs will extend through the end of December.

"We have a freestanding insert that will drop June 30," he said. "Shipments began the week of May 19."

He continued, "We want to get on consumers' short list of acceptable brands. For us it is all about trial and awareness. As the program demonstrates, we're going to get trials."

Drypers' effort comes exactly a year after the company survived perhaps the greatest challenge in its brief history, said Tognietti. After being formed in January 1995 from a consolidation of four regional brand companies, the company found itself vulnerable to a vicious combination: a doubling of pulp prices and a promotion price

war between competitors Kimberly-Clark and Procter & Gamble.

Drypers' market share, which had peaked at about 6% the prior October, bottomed out at about 4.1% in June 1995, he said.

Since that time, Drypers has been battling back, fighting for new distribution both within the grocery channel and without. "Our share is above 6% now. So far, this growth is by and large same-store sales. Now we are beginning to gain new accounts."

Adding distribution is key for the Drypers brand, Tognietti said, because it is distributed only through about 60% of the nation's grocery ACV. Drypers wants to gain not only new distribution in markets where is has historically lagged -- like Los Angeles, Chicago, New York and the Southeast -- but more shelf space at current accounts.

"We're constantly after the other 40%," he said, noting that Drypers just got approval for trial distribution at Omni, in Chicago. Growth with national accounts is also key. "About 45% of all diapers are sold in mass merchandisers. That is up from 20% six to eight years ago," he said, adding a note of regret that this trend has come partly at the expense of some loyal brokers and grocery accounts.

Drypers is now sold in all 80 Super Kmart Centers and is being tested in selected Wal-Mart Supercenters in the Southwest. The brand is sold in the baby departments at Venture Stores and at Baby Superstores.

A year ago, Drypers' sales force was focused around each of the four predecessor companies. Now it has seven regional managers, each handling a six- to eight-state region, he said. "We use food brokers as our primary selling force for grocery. We also have a separate private-label sales division."