Toilet paper is an interesting industry.
Basically, toilet paper is something that is well known. Each individual person uses roughly the same amount each year, so demand can be easily tracked. It’s also very bulky, so producers don’t particularly want to store a ton of it, nor does the grocery industry. But that’s usually fine, because everyone roughly knows what the demand is going to be and how many cases they are going to need to meet it. After all, demand doesn’t change much from year to year.
Normally, the supply chain is pretty efficient. Factories make pretty much exactly what they’re going to need, stores order pretty much exactly what they’re going to need, and people buy pretty much exactly what they’re going to need. In normal times, this is going to be a pretty well sorted industry.
That is, of course, until you get to abnormal times.
The result is, right now, people are buying more toilet paper than they need. It’s panic buying, as people hear word of a pandemic they’re trying to stock up, and thus you get people buying a cart full of toilet roll. And, in reality, they don’t need it. Even if everyone in their household gets the COVID-19 virus, they’re going to use roughly the same amount of toilet paper. Buying extra doesn’t have much in the way of benefits. Extra rolls are just going to sit in a closet somewhere until you need it, and since this is largely a respiratory illness, toilet paper itself isn’t going to be used in excess even if a large number of people contract it.
So, even though people are buying a ton of toilet paper, this is going to be very bad for the toilet paper industry.
That doesn’t seem logical, but remember that this is an industry built on steady, predictable demand. This isn’t an industry that can easily deal with variability in demand. It is, normally, the most predictable industry in the world – it’s a product that everyone needs at the same rate no matter what is happening in the world. As a result, it’s not built to increase demand, nor is it built for a large decrease in demand either.
And there will be a massive decrease in demand, because of that steady need. Even if we have an entire spare room full of toilet paper, you’re not actually using more of it. Thus, at a certain point, stores aren’t going to be moving more product. Plus, because it’s bulky, it’s going to be hard to store. The toilet paper crash is going to lead to some real headaches for the industry, and it is going to happen.
This spike in demand is unusual for this industry, which is built on predictability, the idea that every person uses their product once or twice a day. That’s going to cause some havoc. It’s a rare business where everyone buying all of their product is an extremely bad thing, because they know very well that’s going to mean that there will be a crash in demand. If anything, they want people to keep their toilet paper habits as regular as their usage.
