needs,Dutrenitdecidedtoeatthecostofflyinginmore
fromtheU.K.Fora supplychainexecutive,havingtoair-
freighttensoftonsofrawmaterialsacrosscontinentsis
somethingclosetoa worstnightmare.Hisbossesdidn’t
wanttoraisepricesandbeseenastakingadvantageofthe
pandemic.“Wedecidednottodoanycompromiseonthis,”
Dutrenitsays.“Marginhasnotbeena driver.”
AsCovidspread through theU.S.andLysol hoard-
ingbeganinearnest,theassemblylinesstartedrunning
shortofquatsandethanol.Againthesupplyteamfound
answersinEurope,flyinginmorequats.Eventuallythecom-
panylocateda plantinNebraskawithspareethanolfrom
itslower-gradegasolineadditiveandretooledit tomake
purerethanolforLysol.Italsolookedonlinetoseewho
aroundtheworldwassellingalternativestoLysolorClorox
products—thehundredsofsmall,never-heard-of-itbrands
thatsuddenlypopulatedAmazon.comandotherwebsites
thisspring—andbegansigningdealswiththesmallercom-
paniestousetheirproductioncapacity.
Pre-Covid,LysolproductioncapabilitiesinNorthAmerica
toppedoutatabout 10 millioncansa month,accordingto
Reckitt.Withmorethana dozencontractorssignedupto
producemore,themonthlynumbershouldhitthe 35 mil-
lionmarkbytheendoftheyear,thecompanysays,plus
morethan 30 millioncansofwipes,upfromlessthan7 mil-
lioncansa yearago.
Whilethecompanystillhasn’tbeenabletomeetallofthe
demand,itsgainsinmarketsharesuggestthatit’soutpac-
ing competitors. Along with the 70% revenue increase for
Lysol products, Dettol sales are up 50% around the world,
and Reckitt has managed to keep other cleaning supplies
in circulation, too. Because people are staying home more,
they’re using more of the company’s dish detergent. They’re
lonelier, so they’re getting pets and buying more Resolve,
its spray product for carpet messes. More cooking and pets
mean more smells in the house, therefore people need more
air fresheners. Sales of the company’s Durex condoms, how-
ever, have yet to rebound to pre-pandemic levels.
Reckitt expects something like the current level of
demand to last through much of 2021. It says increased
capacity from new contract manufacturers will allow it to
sell as much Lysol as retailers want by the spring and to
resume making products in the scents and sizes it eliminated
this year for the sake of efficiency. “People will want to get
their favorite fragrance back,” says Harold van den Broek,
the president of Reckitt’s hygiene business. “They will want
to get the wipes that they were used to.” Narasimhan says
he’s considering introducing a hand sanitizer in the U.S.
market, where Purell dominates.
Reckitt is also investing in more U.S. manufacturing facil-
ities, so it can reduce its reliance on contractors later this
year and, it says, be self-sufficient by 2023. The added capac-
ity is a bet that the pandemic has permanently changed how
people think about cleaning their houses and themselves.
“Even when this all goes away, demand for our products
willbestructurallyhigherthanwhattheywerepre-Covid,”
Narasimhan says.
While that bet seems pretty safe right now, it remains
tough for the company to gauge exactly where demand
might settle. About three months ago, the Lysol team began
sending 10 times its usual shipments to a group of 30 to
50 U.S. retail stores, depending on the day or week. Some
days, the company says, every last item sells within two
hours. (It’s not a perfect test; the Lysol team has received
reports that customers post online whenever they spot cans
or wipes in the test locations, bringing in more shoppers.)
For now, and likely through the winter, many Americans in
search of Lysol and other household disinfectants won’t be
able to buy as much as they want.
During a typical shift at the New Jersey factory, from
7:30 a.m. to 3:30 p.m., a digital counter on a wall keeps track
of how many finished cases the assembly line has produced.
On that day this fall, with about an hour left in the shift, the
count stood at 6,475 cases of Lysol, or almost 80,000 cans.
In the packing area, the machines were still loud enough
to require earplugs. Cal Swedberg, Reckitt’s regional man-
ufacturing director, looked up as hundreds of finished can-
isters wound down rows of conveyor belts stacked 20 to 30
feet high. Employees call it the Wall of Lysol. As the cylin-
ders rolled off the line to be wrapped into cases, and then
into 2,000-can pallets, Swedberg said: “That lasts at Costco
about 3 minutes.” <BW>63Bloomberg Businessweek November 23, 2020
● RECKITT PLANS TO BRING BACK SOME LESS-COMMON SCENTS IN 2021