What Everyone’s Getting Wrong About the Toilet Paper Shortage

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An example of how things are often more interestingly complex than they seem.

What Everyone’s Getting Wrong About the Toilet Paper Shortage
It isn’t really about hoarding. And there isn’t an easy fix.
2 Apr 2020


Excerpts:

No doubt there’s been some panic-buying, particularly once photos of empty store shelves began circulating on social media. There have also been a handful of documented cases of true hoarding. But you don’t need to assume that most consumers are greedy or irrational to understand how coronavirus would spur a surge in demand. And you can stop wondering where in the world people are storing all that Quilted Northern.

There’s another, entirely logical explanation for why stores have run out of toilet paper — one that has gone oddly overlooked in the vast majority of media coverage. It has nothing to do with psychology and everything to do with supply chains. It helps to explain why stores are still having trouble keeping it in stock, weeks after they started limiting how many a customer could purchase.

In short, the toilet paper industry is split into two, largely separate markets: commercial and consumer. The pandemic has shifted the lion’s share of demand to the latter. People actually do need to buy significantly more toilet paper during the pandemic — not because they’re making more trips to the bathroom, but because they’re making more of them at home. With some 75% of the U.S. population under stay-at-home orders, Americans are no longer using the restrooms at their workplace, in schools, at restaurants, at hotels, or in airports.

Georgia-Pacific, a leading toilet paper manufacturer based in Atlanta, estimates that the average household will use 40% more toilet paper than usual if all of its members are staying home around the clock. That’s a huge leap in demand for a product whose supply chain is predicated on the assumption that demand is essentially constant. It’s one that won’t fully subside even when people stop hoarding or panic-buying.

Talk to anyone in the industry, and they’ll tell you the toilet paper made for the commercial market is a fundamentally different product from the toilet paper you buy in the store. It comes in huge rolls, too big to fit on most home dispensers. The paper itself is thinner and more utilitarian. It comes individually wrapped and is shipped on huge pallets, rather than in brightly branded packs of six or 12.

“Not only is it not the same product, but it often doesn’t come from the same mills,” added Jim Luke, a professor of economics at Lansing Community College, who once worked as head of planning for a wholesale paper distributor. “So for instance, Procter & Gamble [which owns Charmin] is huge in the retail consumer market. But it doesn’t play in the institutional market at all.”

Georgia-Pacific, which sells to both markets, told me its commercial products also use more recycled fiber, while the retail sheets for its consumer brands Angel Soft and Quilted Northern are typically 100% virgin fiber. Eric Abercrombie, a spokesman for the company, said it has seen demand rise on the retail side, while it expects a decline in the “away-from-home activity” that drives its business-to-business sales.

In theory, some of the mills that make commercial toilet paper could try to redirect some of that supply to the consumer market. People desperate for toilet paper probably wouldn’t turn up their noses at it. But the industry can’t just flip a switch. Shifting to retail channels would require new relationships and contracts between suppliers, distributors, and stores; different formats for packaging and shipping; new trucking routes — all for a bulky product with lean profit margins.

Because toilet paper is high volume but low value, the industry runs on extreme efficiency, with mills built to work at full capacity around the clock even in normal times. That works only because demand is typically so steady. If toilet paper manufacturers spend a bunch of money now to refocus on the retail channel, they’ll face the same problem in reverse once people head back to work again.


A less interesting cause for this:

When household cleaning products will be back in stock
April 24, 2020


Weeks have passed since Americans first started panic buying and stockpiling key household staples, but store shelves across the country are largely still bare of items like toilet paper, hand sanitizer, and Lysol and Clorox wipes.

Now as some states ease up on stay-at-home orders, and leaders contemplate how to reopen the economy, customers are wondering why stores and online retailers are still out of stock and when they can expect more.

Supply-chain experts told Business Insider that these products would return, fully stocked, to store shelves — but it would likely take until the summertime.

Toilet paper, 90% of which is manufactured domestically, is already reappearing in many stores in small quantities, and most customers can access what they need, according to Patrick Penfield, a supply-chain-management professor at Syracuse University.

But Lysol and Clorox wipes, many Americans' favored cleaning products, pose a bigger challenge and will take until July or August to come back in stock, he said.

The manufacturers have to ship the chemicals used in the products from China, a process that typically takes four weeks, Penfield said.

On top of that, many factories in China were shuttered for much of the early part of the year because of the double whammy of the Lunar New Year and the coronavirus outbreak, creating supply-chain disruptions that took time to resolve.
 
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