Why toilet-paper demand spiked 845%, and how companies kept up with it

• A run on toilet paper left shelves empty across the US.
• A consumer behavior expert unpacks why the coronavirus drove people to panic buy.
• But it wasn't just hoarders who were to blame for the shortage — an industry divided into manufacturing consumer and commercial toilet paper, with little opportunity for crossover, added to the problem.
• Business Insider goes inside two toilet-paper manufacturers to see how they got creative to keep up with demand.

Following is a transcription of the video:

Narrator: The US is used to making and selling more than 7 billion pounds of toilet paper a year. So how did shelves end up looking like this?

When the coronavirus pandemic hit, toilet-paper sales in the US jumped by 845%. We're talking $1.45 billion in sales in just one month. Look familiar?

Priya Raghubir: If I don't wear perfume one day, I will survive. But if I do not manage to go to the loo in a way that is satisfying to me, I'm gonna have a headache.

Narrator: But the run on toilet paper wasn't the only problem. We spoke with a consumer behavior expert to figure out why this phenomenon is happening. Then we got a peek inside two toilet-paper factories to see what all this means for the companies making the product.

From March 2 to May 2, toilet-paper sales were up 71% year over year in the US, making it the most purchased item at grocery stores across the country. And sales might have kept rising if it weren't for empty shelves, both in real life and on Amazon.

Along with the US, a run on toilet paper happened in Norway, Hong Kong, Singapore, and Australia. But in other countries, toilet paper wasn't the hot commodity. In India, people bought up wheat flour. In China, it was a run on rice.

Raghubir: It is whatever makes you comfortable. It's something that will last, and it won't spoil.

Narrator: Then there's the fear you feel when you're staring at an empty aisle.

Sahil Tak: People started to be really scared that, look, I'm not gonna get the paper that I need. Fear is a strong motivator, so whenever they had the opportunity, they would clear out the shelf as soon as it restocked.

Raghubir: Toilet paper allows them to exert some kind of control over a universe that is completely out of control.

Narrator: It's not just the scared hoarders who are emptying shelves. There's also a divided supply chain. The toilet-paper industry consists of two worlds: the consumer market, the small rolls in your bathroom at home; and the commercial market, the big rolls you use when you're away from home.

Tak: So, it's schools, it's office buildings, it's restaurants, it's other food service, hotels. A lot of that business obviously has been shuttered due to the pandemic.

Narrator: Though people aren't necessarily going to the bathroom more, they are going more at home. Toilet-paper company Georgia-Pacific estimated people were using 40% more at-home paper, so we're using more small rolls. But can't companies that make the big stuff just start making the small stuff? Well, it's not that easy.

Tak: There's not a machine that'll take commercial bath tissue to then retail bath tissue.

Narrator: At-home paper requires different input paper, packaging, and different machine configurations. Which means companies in the at-home sector were pretty much on their own to meet an unprecedented demand. And they could barely keep shelves stocked.

Toilet-paper production normally looks like this: One company makes what are called parent rolls. Here, a mixture of paper and water called pulp is made. Water is squeezed out, and the remaining pulp is stretched out into thin sheets. It's heated and rolled into massive, 9-foot rolls. There are about 46 miles of paper in just one of these.

Step two? Those parent rolls are sent to what's called a converter, a company that cuts them down into individual rolls.

Vince Reese: We unwind the roles, ply them together, put the emboss on them, put the perforations in, roll them up, and then cut them up into stuff that you and I would use.

Narrator: Vince's company, Cardinal Tissue, is a converter in North Carolina. Like most in the industry, Vince's manufacturing line was already pretty much at capacity. He's producing a low-cost product, so to make money, he was already producing a lot quickly.

Reese: Most tissue manufacturers didn't have idle equipment. We run our plants 24/7. Narrator: Over in Maine, Tissue Plus looked a little different before the pandemic.

Jake Cooper: Within those three weeks, I have learned more than in my entire life.

Narrator: This guy launched the startup from his dorm room in 2019. By January 2020, he hadn't even turned on his machines yet. But now machines are running nonstop. To match demand, these two companies had a few tricks up their sleeves. Both had warehouses filled with stock.

Reese: We emptied the warehouse and then ended in a situation where we're really just loading it straight onto a truck and getting it out as it's made.

Narrator: Vince narrowed down his product portfolio. He went from producing over a dozen products to just three or four. That cut down on the time it took to change over machines to make the different products.

Reese: Across the board, manufacturers told their customer base, "Hey, look, we're gonna give you fewer options for this period of time because we can't meet demand."

Narrator: The company also stopped throwing away any defective rolls and sold those, too.

Reese: A lot of places said, "Look, it's better to have a roll of toilet paper with a tail that isn't tacked down than to have nothing."

Narrator: Tissue Plus made a more radical change. Instead of going through a distribution center to deliver rolls...

Cooper: We literally had to adapt our little family-owned business to become a direct to consumer.

Narrator: In March 2019, Jake started an e-commerce site and started delivering toilet paper through FedEx straight to customers' doors. Cooper: Not planned for, but it has become the largest segment of the business.

Narrator: Now, Tissue Plus is making over 25,000 rolls a day, and it's getting orders from all over the world.

Cooper: A contact from Iceland who reached out and asked if we could spare a container of toilet paper for them. And I said, "I wish I could spare a container for you. I wish I could spare a truck. But we can barely fill a truck right now with the demand that's going out the door."

Narrator: Jake's hoping to automate packaging to get up to 50,000 rolls a day.

Cooper: You can innovate an IT chip in a processor in a computer as much as you can innovate a roll of toilet paper.

Narrator: Over at Cardinal Paper, Vince has managed to increase shipments upwards of 70%. That comes out to a quarter million rolls per day. Because of all these industry pivots, producers are starting to catch up with demand. In March, 73% of grocery stores were out of toilet paper, but by May, the number dropped to 48%.

So how can we keep closing the gap?

Raghubir: I would say estimate how much you need. Just buy that much, at the interval at which you need it.

Narrator: Meaning no loading up on 50 rolls in one cart.

Reese: It's not very glamorous to be making toilet paper. It's not like making Ferraris. It's definitely a product that people need, and they have to have it, and they rely on it. You kind of have a little bit of a noble purpose, and I think people took that to heart.