Checking off items from a weekly shopping list is a tricky task these days. The coronavirus pandemic brought something most of us have never seen before in the United States – rows of empty shelves in grocery stores. The shortages aren’t just food items. There are some shortages in cleaning supplies, too.
No one wants to be without cleaning supplies when we are in the throes of a plague. Antiseptic cleaning wipes are a common item in most American homes but that’s not the case now. If you’re the designated shopper in your family, you know that you can’t find a Clorox antiseptic cleaning wipe. The wipes quickly flew off the shelves at the very beginning of the pandemic outbreak and we haven’t seen them since.
Get used to it, fellow shoppers. Clorox CEO Benno Dorer says that the product won’t be back on store shelves in an adequate supply until sometime in 2021. Until then we’ll have to continue cleaning countertops and other surfaces the old-fashioned way – cleaning solution and water mixed together in a bucket or some other container and applied with a cloth. It usually works out to be a more economical way of disinfecting surfaces but the wipes are just so darn quick and convenient.
As mitigation recommendations became clear in the early days of the plague, shoppers began hoarding cleaning supplies, just as they did other items like toilet paper. Clorox and other companies like Lysol were caught unprepared to meet the increased demands of consumers. Clorox is the world’s biggest cleaning products maker. The company sites a six-fold increase in demand for its disinfectants.
The company is currently understocked across much of its portfolio, which includes Glad trash bags and Burt’s Bees lip balm. Supply for most products, like liquid bleach, will improve dramatically over the next four to six months – but not wipes, Dorer said on Monday.
Clorox products are used in Uber vehicles and United Airlines planes, and are sold by major retailers like Walmart, Amazon and Kroger.
“Disinfecting wipes, which are the hottest commodity in the business right now, will probably take longer because it’s a very complex supply chain to make them,” Dorer said.
It turns out that the supply chain is stressed because the cleaning wipes are made with polyester spunlace, a material currently in short supply. It is also used to make personal protective equipment like masks, medical gowns, and medical wipes. “That entire supply chain is stressed. … We feel like it’s probably going to take until 2021 before we’re able to meet all the demand that we have,” Dorer said. Though in May Dorer predicted that store shelves would be restocked by the summer, that has not materialized.
Clorox has since made “major” capital investments to ramp up production and profits are up.
Since then, Clorox has made “major” capital investments so it can ramp up output each quarter, including simplifying its disinfectant product line-up at factories that run 24/7 every day of the year. Clorox began outsourcing some manufacturing this year to 10 third-party supplies, and plans to keep looking for more.
On Monday, Clorox reported fourth-quarter sales and earnings that widely topped analysts’ expectations, driven by a 33% increase in revenue from its health and wellness business, which makes cleaning products and accounts for more than 40% of total sales.
Clorox shares were up 2.5% on Tuesday.
I checked out Amazon this morning to see how the supply is there and the wipes are still sold out, except for one item I found. There is a canister of Clorox wipes – Orange Fusion scented – for the outlandish price of $22.95. The canister holds 75 wipes. For reference, a regular price for a canister of 75 wipes goes for $4.99.
Toilet paper returned at a quicker pace because manufacturers didn’t face a raw material shortage. Proctor & Gamble, for example, had to make adjustments to bring supplies back to meet the demands of consumers.
Though shoppers were emptying shelves of toilet paper in the early days of the pandemic, increasing supply was a relatively straightforward process. By April, Procter & Gamble’s Mehoopany, Pennsylvania paper division plant was “making record amounts of Charmin and Bounty, more than we’ve ever made in the history of P&G,” said Jose de los Rios, the site’s environmental leader. The Mehoopany plant, which covers nearly 2 million square feet, is P&G’s largest facility in the U.S. and serves approximately half of the U.S. population, focusing mostly in the Northeast.
The Mehoopany plant did not face raw material constraints because the company gets most of its pulp from North America and Latin America. Furthermore, the rise in demand for tissue was balanced out by the drop in demand for other pulp-derived products, such as office paper, due to widespread work-from-home policies.
While P&G was able to increase its paper production, doing so wasn’t as easy as simply adding more paper machines. Although the existing machines already ran at close to 100% production rate, according to de los Rios, buying new machines was not a viable solution. These are extremely expensive investments of $250 million or more, and the process from ordering to getting the correct environmental permits to finally starting up production can take two years.
Instead, P&G has optimized its existing machines by reducing planned downtime events and changeovers. It has also been “streamlining” its lineup to focus on the products that customers most want, according to Rick McLeod, vice president of product supply for P&G Family Care. McLeod also said he believes the industry will get more efficient in the long term because of these changes.
The makers of other brands of disinfectants are scrambling to meet demands for wipes, too.
Lysol’s revenue was up over 50% in the first quarter of 2020, but its parent company Reckitt Benckiser continued to ramp up production to meet the high demand.
The gap exists for smaller players in the industry too. Seventh Generation, a leading manufacturer in green cleaning and hygiene products, has already delivered 63% more product in the first half of 2020 than in 2019, but demand spiked 300-400%, according to senior director of the supply chain Jim Barch.
“The biggest snags in the supply chain have really been in disinfectant wipes,” said Barch.
Since no one thinks the coronavirus is going away any time soon, it surely has changed many aspects of our day-to-day lives, including shopping for supplies other than food. Just as shoppers learned lessons about preparedness early on with food products when shutdowns happen and people panic hoarded food, we are learning the same lessons about other necessities like cleaning products. And, flu season will be here before we know it.