When toilet paper supplies ran low in Venezuela several years ago, few could have envisaged that the UK would face a similar issue as coronavirus began to spread nationwide.
At this time, the demand for hygiene products such as toilet paper and soap (alongside tinned foods) soared to new highs as panic-buying took hold, with this trend exacerbated by mass hysteria and advent of fake news.
However, this also highlighted a potential vulnerability in the global supply chain, which is being put under increased pressure as demand remains high. We’ll explore this below, while asking whether suppliers can meet this in the current climate.
Is There Still a Shortage of Hygiene Products?
In terms of toilet paper, it’s fair to say that demand has fallen considerably since Q1 in the western world, when the shelves of stores like Walmart in the US and Asda in the UK were left almost completely bare.
This has helped to ease the pressure on suppliers and left healthy stocks of this product, but the same cannot be said for other hygiene products.
For example, the top two suppliers of the highly specialised swabs used to test patients for coronavirus are currently straining to keep up with global demand, particularly in stricken nations such as the US (and previously Italy and the UK).
The main reason for this is the unique nature of the nasopharyngeal swabs used to test for the virus, which are markedly different from standard Q-tips and less readily available in the current market.
Subsequently, increased demand has created a significant bottleneck in production and international supply chain, creating a scenario where suppliers are struggling to churn out products at the desired rate.
The Impact of Demand on Market Size
There’s another side to a scenario where demand outstrips supply, of course, as this increases the size of specific markets and the value of the brands that participate in this.
Take the paper towel market, which may not sound like the most glamorous entity but has actually grown by 264% as a result of the spike in demand inspired by Covid-19.
The same can also be said for prominent and similarly unglamorous cleaning tools such as cotton buds, along with specialist medical devices that play a pivotal role in keeping patients safe in hospitals and similar establishments.
In particular, medical device stocks have soared in the financial market during Q2, and this trend shows no sign of abating anytime soon.
The only potential blip on the horizon could be in a scenario where the imbalance between supply and demand becomes too great, as this can send consumer prices soaring and actually lower sales volumes and accessibility over time.