By Nathalie Voit
The manufacturer of Purell is betting pandemic-era hand sanitizing habits are here to stay. Gojo Industries Inc., the family-owned company that produces Purell hand sanitizer, added both a factory and a warehouse to its inventory this year, in addition to restructuring its supply chain to double its production.
Gojo believes demand for sanitizer will long outlast the public health crisis, citing changing consumer habits and health precautions adopted throughout the pandemic.
“Before the pandemic, hand sanitizing was viewed as not necessary, or not necessarily value-added in terms of risk reduction when it comes to health,” said Gojo Vice President of Hygiene Science and Public-health Advancements Jim Arbogast. “The pandemic is a real wake-up call for everyone globally on the importance of infection protection.”
According to the Wall Street Journal, the Akron, Ohio, company is an outlier in the consumer- products market. Although plenty of household product companies specializing in cleaning solutions and disinfectants have seen demand for their products jump, hand sanitizer, more than any other household product, has been consistently in high demand throughout the pandemic.
In 2020, U.S. hand sanitizer sales skyrocketed 600% to $1.3 billion, an almost seven-fold increase from the year before. Meanwhile, sales for staple household items like toilet paper increased only 20% compared with 2019.
“We hadn’t planned on adding new facilities for a decade,” said President and CEO of Gojo Carey Jaros, who took over in January 2020 just as the Covid-19 pandemic was being spotlighted in the news.
While makers of most other household items like dish soap, multi-purpose cleaners, and aerosol disinfectants are ramping up production to meet demand, they have yet to build new factories or make other “major long-term investments” that could “backfire” after the pandemic abates, the WSJ reported.
Companies are worried spending on “big-ticket items” like new factories could wreak financial havoc if demand abruptly falls off. Most opted to follow the traditional route of simply hiring more personnel or working facilities around the clock to meet demand. Others are employing third-party manufacturers to produce inventory when demand is high. Companies like Clorox, for example, are temporarily leasing out space from nearby factories, a solution that allows the company to discontinue production if demand subsides.
On the other hand, hand hygiene manufacturer Gojo not only added more factories and hired additional workers, but the company also began producing its own bottles and pumps as opposed to buying them from suppliers. The decision was made after the company experienced unexpected production setbacks from a shortage of containers in the spring of 2019. At one point, the company was selling its staple product in repurposed rubbing-alcohol containers and bottles originally meant for Dawn dish soap.
The decision to streamline its supply line has allowed the company to carry on with production in the event of external shocks.
“I truly believe that the combination of visible hygiene, which is, you know, sanitizer dispensers really in sight anywhere that customers can see them, and the power of the Purell brand means that demand absolutely will sustain,” Jaros said.
