NARB Recommends Kimberly-Clark Discontinue Certain Claims Made for Huggies Following P&G Challenge

New York, NY – Feb. 6, 2019 – A panel of the National Advertising Review Board (NARB) has recommended that Kimberly-Clark discontinue its “fastest growing brand in hospitals” claim unless that claim is supported by recent data that includes Kimberly-Clark’s sales data in addition to reliable third-party sales or market share data for the hospital diaper market as a whole. The panel also recommended that any such claim be qualified to exclude smaller competitors that have grown at a faster rate (e.g., the “fastest growing brand” claim could indicate that it is being made against leading brands).

NARB is the appellate unit of the advertising industry’s system of self-regulation. It is administered by the Council of Better Business Bureaus.

The advertising at issue was challenged by The Procter & Gamble Company before the National Advertising Division (NAD), an investigative unit of the advertising industry’s system of self-regulation.

NAD recommended that the advertiser discontinue its claim that “Huggies® diapers is the fastest growing brand in hospitals (‘based on volume share growth.’)”

Kimberly-Clark appealed the NAD’s recommendation to NARB.

Kimberly-Clark’s support for its “fastest growing brand in hospitals” claim relied on a zero-sum analysis of the hospital diaper market between the second quarter of 2016 and the second quarter of 2017; it argued that due to declining birth rates and consistent procurement/use of diapers by hospitals, combined with the fact that Kimberly-Clark and Procter & Gamble accounted for 99.5% of the hospital diaper market, any increase in Kimberly-Clark’s diaper sales to hospitals necessarily resulted in a decrease in Procter & Gamble’s sales and thus an increase in Kimberly-Clark’s market share. Procter & Gamble disagreed with this analysis, arguing that the hospital diaper market was not fixed and Procter & Gamble’s sales in this market increased during the relevant time period.

The panel agreed with the NAD that support for a comparative “fastest growing brand” claim should include reliable sales or market share data for the market as a whole as collected and reported by a reliable third party. The panel further agreed with the NAD that the assumptions made by Kimberly-Clark with respect to the hospital diaper market were not sufficiently reliable to provide a reasonable basis for the claim made – there was insufficient evidence in the record that hospitals and hospital networks uniformly operate in a consistent manner in procuring diapers and/or providing diapers to hospital patients.

The panel noted that during the NAD proceeding Procter & Gamble supplied sales data that, in conjunction with Kimberly-Clark’s sales data, provided virtually complete sales data for the hospital diaper market between the second quarter of 2016 and the second quarter of 2017. When combined, the data from Procter & Gamble and Kimberly-Clark established that

Kimberly-Clark’s diaper sales to hospitals grew faster than Procter & Gamble’s during that time period. However, the panel found this data was too old to support a current “fastest growing brand in hospitals” claim, and that such a claim would need to be substantiated with more recent internal sales data in addition to reliable third-party sales or market share data for the hospital diaper market as a whole.

The panel recommended that Kimberly-Clark discontinue its “fastest growing brand in hospitals” claim unless that claim is supported by recent data that includes Kimberly-Clark’s sales data in addition to reliable third-party sales or market share data for the hospital diaper market as a whole. The panel also recommended that any such claim be qualified to exclude smaller competitors that have grown at a faster rate (e.g., the “fastest growing brand” claim could indicate that it is being made against leading brands).

Kimberly-Clark, in its advertiser’s statement, thanked the Panel and agreed to comply with the Panel’s recommendations in future advertising.  “While NARB found that this [sales] data is too old to support a current “Fastest Growing Brand in Hospitals” claim, K-C is gratified that NARB found that the claim was supported, with possible qualification as to smaller competitors, during the pendency of the NAD challenge,” Kimberly-Clark said.