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Clorox plans more flat wipes packs after best year since ‘98

  • ASSOCIATED PRESS / DEC. 1
                                Containers of Lysol and Clorox wipes are on sale at a grocery store in Long Beach, Calif.

    ASSOCIATED PRESS / DEC. 1

    Containers of Lysol and Clorox wipes are on sale at a grocery store in Long Beach, Calif.

Clorox Co. is planning an additional way to keep shelves stocked in the new year: rolling out more pocket-sized packs of disinfecting wipes.

The bleach maker — whose plastic tubs of 35 to 75 wet wipes have become a coveted item during the Covid-19 pandemic — will be adding more flat packets of disinfecting wipes to its line-up. That could include “new packaging, new product counts and more,” the company said in an email, noting that the smaller packs in development are “intended for out-of-home use to meet consumers where they’ll be post-Covid.”

With staple-hoarding Americans still snatching up canisters of disinfecting wipes as fast as Clorox can make them, making more low-count packs could help keep product on the shelves after a year when soaring demand put the company’s shares on track for their best return since 1998.

To contend with demand, Clorox already cut its range of wipes products to 14 from more than 100 earlier this year, jettisoning lower-priority items like compostable wipes. The company has added more than 10 new third-party manufacturers and is building a new wipes line that will help it ramp up in-house capacity in early 2021 and double it by mid-year.

“We have a comprehensive effort underway to get as much product out to consumers as possible. Production of small flat packs is just one of the levers we’re pulling to do that,” the company said.

BULKY CANISTERS

The expanded production of flat packs will work better for on-the-go customers who’ve resorted to bringing bulky cans of wipes with them outside their homes, according to Chief Financial Officer Kevin Jacobsen. Most existing products — think large, hard-sided tubs made for household use — weren’t designed to be carried in a purse or pocket, leaving consumers “looking for solutions,” he told investors earlier this month.

“You’ll see us bring this year to market new products that help consumers when they leave their homes,” he said of the smaller pack innovation. “Obviously that was not something we are working on prior to the pandemic.”

The company has already announced the production of a new single wrapped wipe that’ll be in every U.S. Enterprise Holdings rental car next year. The single-wipe packet will be expanded to additional partners early in 2021, the company said.

ELEVATED DEMAND

Sales of disinfecting wipes, which have been elevated since March, have surged in the U.S. as virus cases rise again, according to data from market research firm Nielsen. Brands that the U.S. States Environmental Protection Agency say are effective against the coronavirus, including Clorox disinfecting wipes, have done particularly well.

But until Clorox’s wipes supply catches up in mid-2021, shoppers often are still finding shelves bare. There are whole web pages dedicated to alerting customers when wipes are back in stock at major retailers, with some shoppers inquiring about restocking dates and timing their store visits to grab the first pallet off the truck.

“We know that consumers are very frustrated with us,” Clorox’s chief operating officer, Eric Reynolds, said in an NBC Nightly News interview earlier this month. Often the cloth is the limiting factor in keeping up with supply, he said, but sometimes it’s the canister.

‘NATURAL’ STEP

Although Clorox says the push for smaller packages is primarily intended to address away-from-home demand, the roll-out will also help keep shelves stocked longer. One reason is human psychology: Without realizing it, a shopper used to buying five packs of wipes at a time may be content with five flat packs, instead of five tubes, even if the wipe count is lower.

The smaller packs also appear to carry better margins. Wipes in a nine-count pack at Walmart Inc. cost almost 11 cents apiece, while they’re less than 8 cents each in a 35-wipe canister. The company declined to comment on margins.

Clorox’s pivot to add more on-the-go wipes is “a natural next step” in addressing changes in consumer behavior, said Credit Suisse analyst Kaumil Gajrawala. In addition to improving Americans’ chances of getting their hands on the coveted product, more flexible packaging will address new hygiene priorities as they leave their homes more.

“If you can shrink those pack sizes, maybe not everybody gets what they want,” said Gajrawala. “But at least everybody gets some.”

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