Kleenex Exit Shakes Canadian Consumer Market A Surprising Development

10 Sep, 2023

Kleenex Exit Shakes Canadian Consumer Market A Surprising Development

Kimberly-Clark, the manufacturer behind the well-known consumer facial tissue brand Kleenex, has announced a surprising exit from the Canadian market, marking the end of an era for the iconic product. While the company will continue to produce its other popular paper product brands such as Cottonelle, Huggies, Poise, and Depend, the production of consumer-focused Kleenex facial tissues in Canada will cease.

Todd Fisher, Kimberly-Clark's Canadian vice-president and general manager, cited challenges stemming from a highly constrained supply environment and unique complexities within the Kleenex business as the driving factors behind this decision. Fisher expressed that this strategic move would enable the company to reallocate resources towards strengthening other brands in Canada, emphasizing their commitment to ongoing innovation and providing value to consumers.

Although Kimberly-Clark's decision has sparked confusion among consumers, industry analyst Zachary Evershed from National Bank revealed that this exit had been anticipated within the industry for some time. Evershed noted that customers had already begun seeking alternative supply sources, indicating a degree of readiness for the change.

One key factor contributing to this decision is the thin profit margins associated with Kleenex products, compounded by recent inflationary pressures. In response to rising prices, consumers have increasingly turned to more budget-friendly alternatives, including private label store brands. Shipping tissue products also presents logistical challenges, as they are lightweight and fill up shipping trucks quickly, making long-distance transportation cost-inefficient.

In conclusion, Kimberly-Clark's withdrawal from the Canadian consumer market with Kleenex signifies a strategic shift in response to complex market dynamics, ultimately aiming to better serve the evolving needs of consumers in Canada.