Clorox won't have enough disinfecting wipes until 2021, its CEO says

[August 04, 2020]  By Richa Naidu

CHICAGO (Reuters) - Grocery shelves won't be fully stocked with Clorox's disinfecting wipes until next year, CEO Benno Dorer told Reuters on Monday, as the world's biggest cleaning products maker struggles with overwhelming pandemic-led demand for its top product.

Since the start of global lockdowns, makers of hygiene goods have seen a sustained boom in sales. While California-based Clorox typically holds aside excess supply for flu seasons, it says it has been unable to keep up with a six-fold increase in demand for many of its disinfectants.

The company is currently understocked across much of its portfolio, which includes Glad trash bags and Burt's Bees lip balm. Supply for most products, like liquid bleach, will improve dramatically over the next four to six months - but not wipes, Dorer said.

Clorox products are used in Uber vehicles and United Airlines planes, and are sold by major retailers like Walmart, Amazon and Kroger.

"Disinfecting wipes, which are the hottest commodity in the business right now, will probably take longer because it's a very complex supply chain to make them," Dorer said. Many wipes are made from polyester spunlace, a material currently in short supply as it is also used to make personal protective equipment like masks, medical gowns and medical wipes.

"That entire supply chain is stressed. ... We feel like it's probably going to take until 2021 before we're able to meet all the demand that we have," Dorer said.

Dorer had said in May that Clorox expected to see shelves stocked with wipes by this summer.

Since then, Clorox has made "major" capital investments so it can ramp up output each quarter, including simplifying its disinfectant product line-up at factories that run 24/7 every day of the year. Clorox began outsourcing some manufacturing this year to 10 third-party supplies, and plans to keep looking for more.

On Monday, Clorox reported fourth-quarter sales and earnings that widely topped analysts' expectations, driven by a 33% increase in revenue from its health and wellness business, which makes cleaning products and accounts for more than 40% of total sales.

(Reporting by Richa Naidu; Edited by Peter Henderson and Leslie Adler)

[© 2020 Thomson Reuters. All rights reserved.]

Copyright 2020 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.  Thompson Reuters is solely responsible for this content.