Dive Brief:

• The Clorox Company's supply of wipes and disinfecting spray is not enough to meet elevated demand. But Clorox is expanding manufacturing capacity and has seen improvement in retail inventory, CFO Kevin Jacobsen said on the company's earnings call last week.
• Clorox is adding capacity for a new line of wipes at a manufacturing facility in the Atlanta area, executives said. And it plans to double its wipe production capacity by the end of the year, compared to what it was producing at the beginning of the pandemic, Jacobsen said.
• "The recent investment we made to create a dedicated international supply chain for Clorox disinfecting wipes is starting to pay off, giving us the ability to not only meet ongoing elevated demand in existing markets, but also to expand to new countries," Vice President of Investor Relations Lisah Burhan said.

Dive Insight:

As the pandemic began unfolding across the world last year, Clorox wipes became a hot commodity as people and businesses took precautions against the virus. Clorox couldn't keep up — and it still can't.

"Typically, customers keep about four weeks of inventory," then-CEO Benno Dorer said on an earnings call last May. "So, at some point, hopefully, we’ll be able to also refill inventories, which will also give us an opportunity to keep selling a lot of wipes sometime in the future."

While it is still difficult to fill retail inventories, Clorox has taken steps to overhaul its wipe supply chain to increase supply.

When Linda Rendle became CEO later in 2020, she said her first priority was expanding supply chain capacity and improving in-stock performance for its products.

This meant increasing the number of suppliers and manufacturing capacity. For wipes, Clorox brought on 10 new suppliers in the company's Q4, expanded its Atlanta operation, added contract manufacturers and built dedicated supply chains for its international sales.

"This will allow us to better meet ongoing elevated demand in our existing international markets where we currently offer wipes and to launch this consumer-preferred form into new geographies," Burhan said of the dedicated supply chain for international wipe operations when the company announced the plan in November.

Burhan said the company sells in 100 countries, but has "very little presence in disinfecting wipes." The company expects that having separate supply chains for international wipe business will allow the business more flexibility in how it uses its capacity and sell more in international markets.

"We can shift supply to the opportunities that are most poignant at the moment, as we move forward," Rendle said in November.

Clorox plans to continue to focus on fewer SKUs and target high selling items. This has been a trend across CPG companies as a result of the pandemic.

"Importantly, simplification is our mantra, and we're seeing the benefit of focusing on fewer SKUs," Rendle said last week.

Correction: This story was updated to clarify a quote and that Rendle took the CEO role in 2020.