Clorox (NYSE:CLX) says demand for its branded disinfecting wipes is running so high that despite operating around the clock, reducing choice, and using third-party manufacturers to add additional capacity, it still won't be able to catch up until the summer.
Cleaning up from wiping down
The Wall Street Journal reports that despite Clorox increasing production of disinfecting products by 40% during the coronavirus pandemic, demand for those items has surged five-fold. CFO Kevin Jacobsen told the Journal: "We're shipping canisters of wipes every day to our customers, and within 30-45 minutes they're gone from shelves. Demand has outstripped what anybody could have imagined."
Clorox isn't alone. Reckitt Benckiser (OTC:RBGL.Y), the maker of Lysol disinfecting spray, has also been unable to match the pace of demand, but it doesn't know when it will be able to catch up. In a public statement, it apologized for not being able to deliver as much product as consumers wanted, but said it was "experiencing unprecedented and accelerated demand."
Clorox anticipates that even after the worst of the COVID-19 pandemic passes, consumers will be looking to maintain a cleaner environment and will continue wiping down surfaces more frequently.
It will be adding a new production line for disinfecting products at an Atlanta factory that has excess space and has converted other production lines to focus on it primary wipes, instead of other products.
Clorox reported first-quarter results earlier this month showing an 18% increase in organic sales volumes, and that was only for a period that captured a few weeks of the pandemic. Analysts are expecting it to see significant more growth in the second quarter.