This Grocery Brand Is Slowing Down Production
At the height of the COVID-19 pandemic, shoppers were often faced with bare shelves when out looking for Clorox cleaning products.
Now, big changes are on the horizon for the brand that saw a boom in production throughout the pandemic.
One of the most notable changes is the company's exiting of partnerships with backup manufacturers that helped the brand surge through the demand for cleaning supplies throughout 2020 until now.
CEO Linda Rendle said that the brand is heading into an "endemic phase," signaling that the pandemic is on its way out and that purchasing habits are going to once again change.
Last fall, Clorox used contract manufacturers for roughly half of its shipments. Despite being costly, it allowed the company to avoid impacts of some raw material shortages, CFO Kevin Jacobsen said at the time.
Despite the lessened demand for Clorox products themselves, raw material constraints and labor shortages are still affecting the entire supply chain, Rendle said. According to the company, Clorox can still only fill a portion of its orders.
Although there are some gaps in the supply chain, material availability is going up. Due to this, Clorox is also shedding its relationship with contract suppliers.
"As that supply chain starts to level out, and we're able to step out of some of those relationships with material suppliers, that also should reduce our cost," Jacobsen said.
Clorox isn't the only company that boosted its manufacturing capacity to meet the demand during the pandemic. Proctor & Gamble also took a similar move during the pandemic to support the increased need of products like hand sanitizer, soaps, and cleaning supplies.
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