Our speaker on July 16 was Rob Talafous. Rob is a sales executive with Georgia-Pacific.
While Georgia-Pacific has many customers and sales people, Rob’s only customer is Costco. Rob reviewed the impact the pandemic had on toilet paper sales at Costco and offered his insights into this product that we use so often and know so little about.
Costco is Georgia-Pacific’s largest worldwide customer with $2 billion in sales of Kirkland Signature Bath Tissue, Paper Towels and Napkins as well as other Georgia-Pacific brands like Dixie disposable table top items, Vanity Fair premium napkins and Marathon “away from home products.”
Before joining Georgia-Pacific, Rob was already a consumer packaged goods professional (Coca-Cola and Kraft-Hines). He also spent five years in a startup business that he co-founded.
A former member of the ice hockey team at St. Cloud University in Minnesota, Rob and his wife moved to the Seattle area in 2014 to be closer to his big customer.
By the end of February 2020, Rob, Costco, and Georgia-Pacific were seeing a hurricane in the purchase of home tissue products. sales were up 75 percent. Initially, this was a regional phenomenon, but it quickly spread globally.
Why did it happen? Rob offered several lines of reasoning:
Because to the nature of the industry, manufacture of these products is constant. There manufacturing capacity runs 24/7 with little safety stock. Hence, when demand surged, there was little capacity to increase stock and existing inventories were wiped out quickly.
Because of the shelter-in-place orders, more residential products were needed–and less workplace product. Retail outlets sold out of toilet paper and home tissue products; office product demand declined significantly. These are different markets with different qualities and brands.
Even when customers didn’t need it, they began to be concerned about having enough and adequacy to purchase–so they bought more than they needed.
Because people were at home more, they began to use more of all home tissue products for cleaning and increased hand washing.
Home products are still in heavy demand: 25-35% of Costco outlets are sold out every day.
Rob was great and provoked a lot of questions.
