Patrice Minguez, President, Resolute Tissue
With the onset of the Covid-19 pandemic, 2020 has been a year unlike any other. We have seen a number of opportunities, but many challenges as well. The tissue division at Resolute experienced tremendous growth in sales in 2020 versus 2019, and we further established Resolute Tissue as a key player in the retail private label business. While our biggest opportunities were in the retail market where we experienced unprecedented demand and sales, our greatest challenges were in the AfH market. School and business shutdowns and closures (i.e., offices, restaurants, hotels) considerably reduced the demand for towel and tissue in this segment. As a result, we re-allocated AfH assets to fulfill some of the increased demand in the At-Home market, while other assets dedicated only to manufacturing AfH products were curtailed. We also invested in additional safety equipment to minimise the risk of contracting Covid-19 for our employees while in the workplace. We initially witnessed a “panic buy”, with an increase in the demand for towel and tissue in the At-Home market during the first months of the pandemic, which depleted manufacturers’ inventory. With time, this impulsive buying practice and hoarding came to an end, and retailers’ shelves were slowly re-stocked with tissue and towel, while At-Home orders remained steady due to the uncertainty of schools and businesses reopening. With the approaching winter season and the anticipated increase in the spread of Covid-19, retailers are pro-actively limiting individual purchases of tissue and towel.
Another trend we see with the closure of businesses and the increase in the unemployment rate is a shift in consumer buying behaviour to frequenting discount/dollar stores, where private label brands continue to capture an even stronger share of the bath tissue and paper towel market. Learning from the experiences of 2020, we believe that many future opportunities in our tissue business depend, in large part, on our ability to innovate and adapt. This could include sustainable packaging options, improvements to our supply chain to more proficiently deliver products to our customers, and streamlining our product mix to increase efficiencies in our manufacturing operations.
The pandemic has shown us these changes can be made to everyone’s satisfaction, both by creating manufacturing efficiencies while supplying our customers with products to meet their needs in a timely manner. We believe consumer behaviour will continue to change and follow the trend triggered by the pandemic. We will likely continue to see an increase in purchases through online channels, discount/dollar stores and clubs, with private label products gaining market share over better known name brands. As a result of the shortage of brand name products at the beginning of the pandemic, consumers now realise that lesser known private brands can provide comparable quality at greater savings.
In the first half of 2021, we believe we will continue to see strong demand in the At-Home market, which will slowly stabilise in the second half of the year. However, we don’t foresee marked improvement in the AfH market soon. Many employers now understand that many of their employees can perform their jobs working remotely, and we predict we will see companies “re-inventing” themselves with more employees working from home, incurring less business travel and extensive use of virtual communications, reducing the need to staff large office complexes.
