The rich are doing great these days. The rest of us, not so much. And yet, the rest of us still have to buy toilet paper even if our jobs are precarious and money is tight:
For them, Kimberly-Clark Corp. and other tissue makers have a special strategy:
“Desheeting.”
A word that top executives of personal-care conglomerates are proudly bandying about because it speaks of their corporate spirit of relentless innovation. And it cropped up during Kimberly-Clark’s second-quarter earnings call….Sales, at $5.267 billion, were down fractionally year over year….Yet Kimberly-Clark continues to eke
out “adjusted earnings” growth — 8% per share in the second quarter. What gives? All manner of cost cutting, product-mix changes, and that word.
“Well, we took some desheeting in the quarter,” explained Mr. Buthman. The company was reducing the sheets on each roll of toilet paper and in each box of Kleenex. He called it an “innovation” that would lead to a “more positive” price. At the same time, volume, which the company counted in thousands of sheets, would decline. “Which net net, for us, works out to be a positive,” he said.
….Part of the innovation is to fluff up the tissue without adding more materials — 15% “bulkier,” it said on a box of Kleenex that had 13% fewer sheets in it, the Wall Street Journal discovered. In the Cottonelle line, sheet counts dropped by 5.7% to 9.6%. Fewer but fluffed up sheets, lower input costs for the company, and consumers who “don’t care about” that. A perfect solution — and a variation on an ancient theme — for hiding hefty price increases.
A regular reader passed this along today via email. “The American zeitgeist in one word,” he said. Quite so.
