Canadians soon won’t find Kleenex tissues on store shelves.
The Kleenex consumer facial tissue business is leaving Canada this month, U.S. manufacturer Kimberly-Clark said in a statement Friday.
Todd Fisher, the company’s Canadian vice-president and general manager, characterized the decision as “incredibly difficult” but necessary because of several headwinds Kimberly-Clark is facing.
To better understand the issues preventing business growth and economic stability, the most critical piece of the puzzle is often people.
“We have been operating in a highly constrained supply environment, and despite our best efforts we have been faced with some unique complexities on the Kleenex business,” he said.
“This decision is one that will allow us to shift our resources to better focus on other brands in Canada and meet the needs of our consumers with continued innovation and value.”
The Kleenex brand is so strong that its name has become synonymous with tissue products.
“We don’t call it facial tissue, we call it Kleenex,” said Joanne McNeish, an associate professor of marketing at Toronto Metropolitan University.
Yet she doesn’t find the discontinuation a complete surprise.
“They’ve been in trouble for quite a while and COVID was sort of a bit of a redemption in terms of revenue,” she said, referencing the onset of the crisis, when people were stockpiling toilet paper.
“But truly, they’ve been on their way to do this for a while.”
McNeish pointed to cuts the company made in 2018 that resulted in more than 5,000 workers, or roughly 12 per cent of staff, leaving the company and 10 factories closing.
At the time, facial tissue margins were reported to be low and only accounted for one per cent of the company’s net sales, she said.
More recently, stubbornly high inflation has only exacerbated matters.
“The lowest price seems to be winning right now,” said Lisa Hutcheson, managing partner at consulting firm J.C. Williams Group.
That’s particularly troublesome for companies in the paper products market, where consumers tend to have little brand loyalty because items seem so similar and promotions are frequent, McNeish and Hutcheson said.
Competition within the market is fierce. Kimberly-Clark rival and Scotties owner Kruger has invested $1 billion on manufacturing facilities that service Canada since 2018 and has eight factories supplying facial tissue, spokesman Francois Paroyan said in an email to The Canadian Press.
In Sherbrooke, Que., a light dry crepe tissue machine will enter operation next December and a new facial tissue converting line will start up in February 2024, he added.
Kimberly-Clark’s move away from selling Kleenex tissues to Canadian consumers will let the company focus on its slew of other brands, including several that remain unscathed for now.
Kimberly-Clark will continue to sell Kleenex professional facial and consumer hand towel products in Canada.
The Cottonelle, Viva, U by Kotex, Poise, Depend, Huggies, Pull-Ups and Goodnites brands also remain unaffected.
The discontinuation of Kleenex consumer tissues in Canada comes on the heels of several other high-profile product departures.
Nestle Canada announced in February that frozen pizzas and meals from its Delissio, Stouffer’s, Lean Cuisine and Life Cuisine brands would disappear from stores this year.
Skippy peanut butter left the country in 2017, while Bugles’ cone-shaped corn snacks and Little Debbie dessert cakes were gone last year.
Hutcheson didn’t see the confluence of departures as a sign of Canada being a less-desirable market.
“Brands are always looking about at consumer preferences,” she said.
But one thing she noticed all of the departed brands have in common is that they have faced pricing pressure from house brands operated by grocers and other big retailers, which often charge less for essentials than their name brand rivals.
She said, “I think in times of inflation and when sales are struggling, everything gets scrutinized and that may include pulling out of certain markets.”