Supplier insights: three ways Kimberly-Clark plans to drive growth in 2021

Date : 26 January 2021

Stewart Samuel

Program Director - Canada

As one of the key CPG suppliers impacted by the pandemic, Kimberly-Clark has outlined its outlook for the year ahead and the three key levers which will underpin growth as it cycles strong comparable sales from 2020.

Net sales growth of 4-6% in 2021

Fourth quarter sales increased 5.5% to $4.8bn, contributing to a solid year for the company, with full year sales up 3.7% to $19.1bn. During the quarter it continued to see strong demand in the consumer tissue segment, with sales up 14%, led by North America. Personal care sales were up 5%, while sales in its professional segment fell by 9%, reflecting lower away from home demand and challenging business conditions following the outbreak of COVID-19. Given the work it has undertaken as part of its K-C Strategy 2022 plan and initiatives to strengthen its global supply chain, it is forecasting net sales growth of 4-6%, including organic sales growth of 1-2%, for 2021.

Source: Kimberly-Clark

Growth initiatives

Growth will be powered by three initiatives:

  • Optimising and scaling brand building capabilities and investments. This includes digital marketing and ecommerce programmes, building on digital sales growth of more than 30% last year
  • Launching its near-term innovation pipeline, with a focus on premiumisation
  • Undertaking selective pricing actions, to reflect rising pulp costs, and revenue management initiatives, including being more efficient with trade funding. The company is aiming to take a more disciplined approach to the reintroduction of promotions, aiming to avoid category commoditisation effects

Challenging environment

Despite the optimism for the year ahead, the business is expecting a challenging trading environment. Key factors driving this include:

  • The reversal of some of the COVID-19 driven consumer demand, although demand is likely to remain elevated, reflecting more people working from home, while sales will improve in its professional segment
  • Rising commodity costs
  • Uncertain economic conditions
  • Birth rate trends; the business is forecasting a mid-single digit decline in the birth rate in the US

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