What does toilet paper have to do with a global pandemic? Nothing.
Yet millions of people have been panicking about their household supply. Stores shelves have been emptied. Amazon is often out of stock. And social media is bursting with jokes and pleas for a roll or two.
The good news: Things are calming down, at least in the U.S., after a buying spree in mid-March. But it's not yet clear when if ever buying habits will get back to normal.
One reason is because people are hoarding. Some were stockpiling last month in advance of city and state lockdown orders.
It's a common reaction in times of a crisis, when consumers feel a need for control and security, says David Garfield, global leader of the consumer products practice at AlixPartners, a consulting firm.
NCSolutions, a data and consulting firm, said online and in-store U.S. toilet paper sales rose 51 per cent between Feb 24 and March 10, as buyers started getting uneasy about the growing number of virus cases.
But sales rocketed a whopping 845 per cent on March 11 and 12 as states announced lockdowns.
Toilet paper flows from paper mills to retail stores through a tight, efficient supply chain. Toilet paper is bulky and not very profitable, so retailers don't keep a lot of inventory on hand; they just get frequent shipments and restock their shelves.
You never noticed because it's so well-managed, said Jim Luke, an economics professor at Lansing Community College in Michigan, who used to be a strategist for a toilet paper distribution company.
The amount of toilet paper the average American uses hasn't changed; it's still around 141 rolls per year (compared to 134 rolls in Germany and just 49 rolls in China, AlixParters says). But even small changes in buying habits can throw everything into disarray.
With a regional disruption like a hurricane, stores can redirect some inventory to the affected area. But a global pandemic doesn't leave a lot of wiggle room.
The big three U.S. toilet paper companies Georgia-Pacific LLC, Proctor & Gamble Co. and Kimberly-Clark Corp. were already running their toilet paper plants 24 hours a day before the new coronavirus hit. That's the only way they can make a profit on such a low-margin product.
The companies are trying to increase output by making fewer varieties of toilet paper. They're also trying to get the product to stores more quickly. Atlanta-based Georgia-Pacific is working with packaging suppliers to get more materials and maximizing the number of deliveries it can ship from its facilities.
Disclaimer: No Business Standard Journalist was involved in creation of this content
