After Tissue Sales Doubled in a Panic-buying March, K-C, GP Still Seeing Solid Demand

PPI Pulp & Paper Week editor Greg Rudder reports that US tissue products sales doubled in March from a panic-buying surge caused by the coronavirus Covid-19 outbreak. This surge in consumer/retail at-home stocking saw North American tissue paper mills and converting plants running full-bore, and contacts this week claimed they remained fast running to try to catch up with demand.

Two of North America's largest "Big Three" brand producers, Georgia-Pacific (GP) and Kimberly-Clark (K-C), reported ongoing strong demand.

"We continue to see stronger than normal demand, with increases as high as two times normal," a GP official told Fastmarkets RISI's PPI Pulp & Paper Week on April 21. "It's not really a matter of producers catching up. We have been able to increase output in some facilities. It's really more a matter of consumers out-buying supply. We continue to look for options and work collaboratively with our customers to get product on the shelves as quickly as possible, including direct shipments to customer stores where possible."

K-C CEO Michael Hsu acknowledged to analysts on April 22 that America's shelter-in-place rule in effect in almost every US state drives tissue product consumption to be "higher" and he noted that some stores continue to rebuild inventory this month. He also said that K-C was considering potentially switching some of its Away-from-Home (AfH) tissue papermaking capacity to consumer/retail tissue paper products.

March paper tissue product sales were $2.476 billion, a dramatic 92 percent rise from $1.28 billion in March 2019, according to IRi figures collected from US grocers, drug, mass market, club, dollar, and other stores. The US government announced a national emergency because of the coronavirus on Mar. 13.

When comparing the March 2020 sales with March 2019 sales during the same four-week period, bathroom tissue sales last month were up by a whopping 101.1 percent, paper towel sales up 80.9 percent, facial tissue up 99.3 percent, and paper napkins up by 66.2 percent.

This panic-buying run was not just for at-home consumer tissue products last month. Cloth all-purpose cleaner was up by 220 percent, moist towelettes were up 115.9 percent, baby wipes were up 85%, and disposable diapers were up 42.3 percent.

While the Big Three led in overall sales, private label did grow at a faster rate in bathroom tissue than the big ones in March.

Further, on a last 52-week sales basis through March 22, private label sales were up nearly 20 percent in bathroom tissue and 11.7 percent in towels.

Private label has continued to be a growing counterpart to the "Big Three" brands since the Great Recession. However, the Big Three still generate about 70-75 percent of the tissue product revenue in the USA.

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