Kimberly-Clark announced that it will end the sale of its line of Kleenex-branded tissues in the Canadian market later this month. Todd Fisher, the company’s Canadian vice-president and general manager, characterized the decision as “incredibly difficult” but necessary because of several headwinds the company is facing.
According to the executive, the decision was motivated by a highly constrained supply environment and the “unique complexities” faced by the brand. As such, the move will allow Kimberly-Clark to shift its resources to better focus on other brands that will remain in Canada.
The Kleenex brand is so strong and recognized in the North American market that its name has become synonymous with tissue products. Thus, despite the decision, the company will continue to sell Kleenex professional facial and consumer hand towel products in Canada. Its Cottonelle, Viva, U by Kotex, Poise, Depend, Huggies, Pull-Ups and Goodnites brands remain unaffected.
For analyst Zachary Evershed, from the National Bank, the decision was likely made because profit margins on the product were thin to begin with, and inflation has consumers choosing cheaper options wherever they can.
The company has only one manufacturing facility in Canada, in Huntsville, Ontario, which serves a local customer base that is comparatively small by the standards of a multinational conglomerate. Given this, Evershed indicates that the company may be deciding to continue selling the product in markets where it can reach a greater number of people for the same or lower shipping costs. He adds that the company’s departure creates opportunities for other companies to fill the gap, including some Canadian ones.