I read an article recently that described how 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.
The industry can’t just flip a switch. Shifting to retail channels will 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.
Toilet paper is a high volume/low value item. The industry runs on extreme efficiency, with mills built to work at full capacity around the clock even in normal times. That works because demand is typically so steady.
There is a concern in the world of toilet paper manufacture and distribution: If toilet paper manufacturers spend money now to refocus on the retail channel, they’ll face the same problem in reverse once people head back to work again.
“The normal distribution system is like a well-orchestrated ballet,” said Willy Shih, a professor at Harvard Business School. “If you make a delivery to a Walmart distribution center, they give you a half-hour window, and your truck has to show up then.” The changes wrought by the coronavirus, he said, “have thrown the whole thing out of balance, and everything has to readjust.”
That looks like Costco looked when I went there last time except it was paper towel – not TP. We still have plenty of TP (and Spam), so I’m not worried.
How are you doing, LL?
I’m doing OK, Adrienne, have plenty of supplies of all sorts. The Pandemic is already old…
And downstream, a 40% increase in waste management, not including more loads of laundry and dishwasher cycles.
Yes. I’m not an expert on waste management systems, but it would be very interesting from an infrastructure analysis point of view to see if the systems in place are overtaxed by the change in lifestyle.
Old habits. All the years I worked on commission, my finances were to budget a fixed amount for monthly expenses. I usually had three to four months ahead and each month month withdrew money for that month. Then, mid month after the paycheck to paycheck crowd died off, bought a month’s worth of necessities plus those bargains that came up. In short, even now I can go weeks without buying anything (except gasoline), if necessary.
You’re a very self-sufficient guy, WSF. Working on commission must have trained you to beware the feast/famine cycle by trying to keep things on an even keel all of the time.
We used to kid my dad about having covered full of toilet paper ,soap and paper towel, among other items as well as a freezer full of meat.
He just bought when it was on sale.
We do to.
I do the same, as a regular practice. I also buy extra for food banks when I go to Costco. They have bulk canned goods and it doesn’t take much for me to throw that extra food in the trunk and drop it off.
“The normal distribution system is like a well-orchestrated ballet,”
Yes, I’ve seen the New York City Ballet version of Ballanchine’s “Hockey Ticket Divertissements”. It’s a bit slow in parts but pretty funny when they do a pas de trois with a 4 foot long strand of TP streaming out the backside.
Plenty of TP here but no yeast, not that I have to worry about either. Regardless, it was curious to watch the shelves strip bare in the panic buy reflex. A lesson for more than a few.
The only thing that seemed bare in the Flagstaff Safeway was the cleaning supplies. Otherwise, it was up to speed. Full canned food selection, toilet paper, etc.
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