How Toilet Paper Companies Dealt With The 845% Demand Spike During Covid -19

 

The US is used to making and selling more than 7 billion pounds of toilet paper a year. So how did shelves end up looking empty? When the coronavirus pandemic hit, toilet-paper sales in the US jumped by 845%. We're talking $1.45 billion in sales in just one month.

 

But the run on toilet paper wasn't the only problem. A consumer behaviour expert explains this phenomenon to Business Insider.

 From March 2 to May 2, toilet-paper sales were up 71% year over year in the US, making it 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. Along with the US, a run on toilet paper happened in Norway, Hong Kong, Singapore, and Australia. But in other countries, toilet paper wasn't the hot commodity. In India, people bought up wheat flour. In China, it was a run on rice.

 

 Raghubir, a consumer behaviour expert told business Insider that the whole phenomenon was the need to for the people to feel comfortable. It's something that will last, and it won't spoil. The fear you feel when you're staring at an empty aisle is what making people hoard.

 

People started to get really scared that they would not get the paper that they need. Fear is a strong motivator, so whenever they had the opportunity, they would clear out the shelf as soon as it restocked. Toilet paper allowed them to exert some kind of control or a feeling of secureness that people craved for in the times of uncertainty.

 

 It's wasn’t just the scared hoarders who were emptying the shelves. There was also a divided supply chain.

The toilet-paper industry consists of two worlds: the consumer market, the small rolls that people used in bathroom of their homes; and the commercial market, the big rolls that was used when they were away from home. i.e., schools, office buildings, restaurants, other food service, hotels that was shut because of the pandemic. Though people weren’t necessarily going to the bathroom more, they were going more at home.

 

 Toilet-paper company Georgia-Pacific estimated people were using 40% more at-home paper, so they were using more small rolls. But can't companies that make the big stuff just start making the small stuff?  Well, it's not that easy.

 

 There's not a machine that'll take commercial bath tissue to then retail bath tissue. At-home paper requires different input paper, packaging, and different machine configurations. Which means companies in the at-home sector were pretty much on their own to meet an unprecedented demand. And they could barely keep shelves stocked.

 

 Toilet-paper production normally looks like this: One company makes what are called parent rolls. Here, a mixture of paper and water called pulp is made. Water is squeezed out, and the remaining pulp is stretched out into thin sheets. It's heated and rolled into massive, 9-foot rolls. There are about 46 miles of paper in just one of these.

 

Step two? Those parent rolls are sent to what's called a converter, and that is cut down into individual rolls in the converter.

Typically this is another company that 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 people would use.

 

 Most tissue manufacturers didn't have idle equipment and had to run the plants 24/7. To match demand, these companies had a few tricks up their sleeves. The companies that had had warehouses filled with stock emptied the warehouse and then ended in a situation where they were really just loading it straight onto a truck and getting it out as it's made.

 

By narrowing down their 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 convinced their customer base, saying they were gonna give fewer options for that period of time because they couldn't meet the demand. The companies also stopped throwing away any defective rolls and sold those, too.

 

 Companies made more radical changes. Instead of going through a distribution center to deliver rolls... they started an e-commerce site and started delivering toilet paper through FedEx straight to customers' doors. It soon became the largest segment of the business.

 

Soon they were able to automate packaging to get up to 25,000 rolls a day. Over that they were able to manage to increase shipments upwards of 70%. That comes out to a quarter million rolls per day. Because of all these industry pivots, producers were 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%.