FILE PHOTO: Clorox wipes available for members of the House Committee on Education and Labor, their staff and witnesses, are pictured during a hearing about the federal government’s role in protecting workers during the coronavirus disease (COVID-19) outbreak on Capitol Hill in Washington, U.S., May 28, 2020. Chip Somodevilla/File Photo
August 4, 2020
By Richa Naidu
CHICAGO (Reuters) – Grocery shelves won’t be fully stocked with Clorox’s disinfecting wipes until next year, CEO Benno Dorer told Reuters, as the world’s biggest cleaning products maker struggles with overwhelming pandemic-led demand for its top product.
Since the start of global lockdowns, makers of hygiene goods have seen a sustained boom in sales. While California-based Clorox typically holds aside excess supply for flu seasons, it says it has been unable to keep up with a six-fold increase in demand for many of 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.
Many companies in the industry make wipes with polyester spunlace, a material currently in short supply as 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.
Dorer had said in May that Clorox expected to see shelves stocked with wipes by this summer.
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.
(Reporting by Richa Naidu; Edited by Peter Henderson and Leslie Adler)