The company behind Purell hand sanitizer is making a big bet that America’s fixation on clean hands will outlast the global COVID-19 health crisis.
Gojo Industries Inc. added both a factory and a warehouse—the family-owned company had just one of each before the pandemic—and restructured its supply chain, all with the expectation that demand for hand sanitizer will remain exponentially higher than before the pandemic.
The Akron, Ohio, company’s investment is an unusual move in the consumer-products world, where the majority of players deluged by Covid-fueled demand have stopped short of building new factories or making other major long-term investments that could backfire after the health crisis eases.
Behind Gojo’s confidence that demand for sanitizer will stick: the dearth of flu cases this season amid COVID-19 precautions.
“Before the pandemic, hand sanitizing was viewed as not necessary, or not necessarily value-added in terms of risk reduction when it comes to health,” said Jim Arbogast, Gojo vice president of hygiene science and public-health advancements. “The pandemic is a real wake-up call for everyone globally on the importance of infection protection.”
Hand sanitizer, more than almost any other household product, has been in high demand during the pandemic. The cleaners are a must-have product for hospitals and medical practices as well as for offices, schools, factories and businesses trying to operate safely.
U.S. sales of hand sanitizer jumped almost sevenfold to $1.3 billion for the 52 weeks ended Jan. 2 compared with the same period a year ago, according to Nielsen. That increase, which doesn’t include sales to businesses and institutions, is far higher than the jump in sales for other products in the pandemic. For instance, U.S. sales of toilet paper were up 20% over the past 52 weeks compared with a year ago.
“We hadn’t planned on adding new facilities for a decade,” said Gojo Chief Executive Carey Jaros, who took over in January 2020 as the coronavirus pandemic was sweeping across China.
Finding the right formula to meet pandemic-fueled sales surges is a high-stakes calculation for companies as the health crisis creates new habits for U.S. consumers. Some are likely to be more fleeting than others.