Toilet Paper, Diapers Are Going To Cost You More: Here’s Why

Consumers will soon be paying more for products such as toilet paper, facial tissues, and diapers as the cost of these items is going up, according to Kimberly-Clark (KMB) and other makers.

Kimberly-Clark said Wednesday that it was raising prices dues due to rising commodity costs in the U.S. and Canada. The company produces Scott toilet paper, along with Cottonelle toilet tissue, Kleenex facial tissue, Huggies diapers, Kotex feminine hygiene products, among other pulp-based product brands.

Kimberly-Clark said consumers will start to see the price increase in late June in its baby and child care, adult care, and Scott bathroom tissue lines, with a mid-to-high single-digit boost hitting the products’ price tags.

The decision by Kimberly-Clark to raise its prices is in reaction to the swelling costs of raw materials such as pulp, recycled fiber, and resins used to make its products despite the high demand for paper products amid the pandemic, Reuters reported.

Pulp producers have also increased the price for hardwood pulp and forecast rising global demand for tissues and toilet paper.

The price increase comes despite the surge seem amid the coronavirus crisis as consumers flocked to retailers to purchase waves of toilet paper, paper towels, cleaning supplies, and other household essentials as they feared shortages ahead of state lockdowns.

Even as COVID restrictions ease in many states, the demand for these products has not slowed, and many have warned of another shortage as some retailers continue to limit purchases of these essential items.

Kimberly-Clark saw a surge in sales during the pandemic, reporting a sales growth of nearly $20 billion last year, but had higher manufacturing costs due to the pandemic impact, its 2020 earnings report indicated.

However, the company is not alone in raising its prices as J.M. Smucker hiked the price of its Jif peanut butter in August as peanut yields decreased, causing its rivals to follow suit, CNBC reported.

General Mills CFO Kofi Bruce also said in a March earnings call that the company plans to raise prices in the coming months. General Mills produces brands such as Cheerios, Chex, Pillsbury, and Betty Crocker.

CNBC also cited Procter & Gamble, which has not announced higher prices on its products to date, but said if the company does increase its prices, it would affect the Pamper diaper and Charmin toilet paper brands.

Shares of Kimberly-Clark were trading at $139.39 as of 1:35 p.m. ET, up $1.08, or 0.78%.