Toilet-paper demand spiked 845% during pandemic
The US typically makes and sells over 7 billion pounds of toilet paper a year. However, when the coronavirus pandemic started, sales increased by 845% that is around $1.45 billion in sales in just one month.
From March 2 to May 2 this year, toilet paper was the most purchased item at grocery stores across the country, and sales might have kept rising if it weren’t for empty shelves, both in real life and on Amazon.
On March 12, 2020, Business Insider said that Walmart, Amazon and Target were close to selling toilet paper online, while panic buyers decimated supplies.
In an interview, consumer behavior experts commented that people are afraid of seeing empty shelves
“People started to be really scared that, look, I’m not going to get the paper that I need. Fear is a strong motivator, so whenever they had the opportunity, they would clear out the shelf as soon as it restocked” says Sahil Tak, owner &vice president ST Paper &Tissue.
“It is whatever makes you comfortable. It’s something that will last, and it won’t spoil”, comments Priya Raghubir, NYU Professor Marketing and Consumer Behavior.
The empty shelves happen not only because of these fearful consumers, there is also a divided supply chain. The toilet paper industry consists of two worlds: the consumer market, with small rolls for the bathroom at home; and the commercial market, the large rolls used in schools, office buildings, restaurants, other food services, and hotels. Businesses that stays closed during the pandemic.
Although people are not necessarily going to the bathroom more often, they are going home more. The Georgia-Pacific toilet paper company estimated that people were using 40% more household paper, the small rolls. And companies that manufacture large rolls cannot always start to manufacture small rolls.
Household paper requires input paper, packaging and different machine configurations. Which means that companies in the domestic sector were virtually on their own to meet an unprecedented demand, and they could barely keep the shelves stocked.
The production of toilet paper usually looks like this: a company produces what is called a parent roll. In the machines, a mixture of paper and water called pulp is made. The water is squeezed and the remaining pulp is stretched into thin sheets. It is heated and wrapped in huge 9-foot rolls. There are about 46 miles of paper in just one. These parent rolls are sent to what is called a converter, a company that divides them into individual rolls. There they unwind the roles, ply them together, put the emboss on them, put the perforations in, roll them up, and then cut them up into stuff that you and I would use.
Cardinal Tissue is a converter in North Carolina and like most companies in the industry, the manufacturing line was already almost at capacity. They are producing a low-cost product, so to make money, they were already producing a lot quickly.
“Most tissue manufacturers didn’t have idle equipment. We run our plants 24/7” says Vince Reese, owner of Cardinal Tissue
The company Tissue Plus launched as a startup in Jake Cooper´s (Innovation and Operation manager) dorm room in 2019. By January 2020 he hadn’t even turned on his machines yet, but now machines are running nonstop.
To match demand, Cardinal Tissue and Tissue Plus had to adapt. So both had warehouses filled with stock.
Cardinal Tissue narrowed down its product portfolio. They went from producing over a dozen products to just three or four. That cut down on the time it took to change over machines to make the different products.
“Across the board, manufacturers told their customer base ‘Hey, look, we’re gonna give you fewer options for this period of time because we can’t meet demand’”, says Reese.
Tissue Plus made a more radical change. Instead of going through a distribution center to deliver rolls, they had to adapt our little family-owned business to become a direct to consumer. They also started an e-commerce site and started delivering toilet paper through FedEx straight to customers’ doors
“Not planned for, but it has become the largest segment of the business”, commented Cooper.
Now, Tissue Plus is making over 25,000 rolls a day, and it is getting orders from all over the world and expects to automate packaging to get up to 50,000 rolls a day.
Over at Cardinal Paper, they managed to increase shipments upwards of 70%. That comes out to a quarter million rolls per day. Because of all these industry pivots, producers are starting to catch up with demand. In March, 73% of grocery stores were out of toilet paper, but by May, the number dropped to 48%.
In order to close the gap, Raghubi says, “I would say estimate how much you need. Just buy that much, at the interval at which you need it”.
Meaning it is not necessary to load up on 50 rolls in one cart.
“It’s not very glamorous to be making toilet paper. It’s not like making Ferraris. It’s definitely a product that people need, and they have to have it, and they rely on it. You kind of have a little bit of a noble purpose, and I think people took that to heart”, finishes Reese.
