Why is Kleenex leaving Canada? Retail analyst weighs in

CTV National News: Kleenex tissues leaving Canada Kleenex tissues are preparing to exit the Canadian market. Kevin Gallagher explains what's behind the move.

As Kleenex exits the Canadian market, the memory of the brand that has become synonymous with tissue products will live on among consumers, a retail expert says.

Bruce Winder, a Toronto-based college business instructor and retail analyst, said Canadians will still have access to other facial tissue products once Kleenex facial tissues are discontinued in the country, but the nostalgia associated with the iconic Kleenex brand will be hard to dismiss.

“It's going to make a bigger impact from a social standpoint, a discussion standpoint, than from an actual product standpoint,” Winder said in an interview with CTV News Channel.

“I think it's gonna take a bigger toll on sort of the nostalgic side of Canada.”

Kimberly-Clark confirmed to CTVNews.ca on Thursday that Kleenex consumer facial tissues would be removed from the Canadian market this month.

“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,” the company said in a written statement.

Other products, however, such as Kleenex professional facial products, which are specifically targeted for the business market, Kleenex consumer hand towel products, along with other Kimberly-Clark brands including Cottonelle, U by Kotex and Huggies will still be sold in Canada.

POSSIBLE REASONS KLEENEX, OTHER BRANDS PULLED FROM CANADIAN MARKET

CTVNews.ca reached out to Kimberly-Clark for clarification on its decision to stop selling Kleenex consumer facial tissues in Canada, but did not receive a response prior to publication.

Winder said he believes the company is discontinuing its Kleenex facial tissues in Canada because private label products, which are products that a retailer gets produced by a third-party but sells under its own brand name, have taken a bigger share of the market in recent years.

“Over the last several decades, retailers have done a great job of creating private label tissues,” he said.

“Maybe the volume of Kleenex has dropped off … due to private label sales eating their lunch a bit. And maybe it's not economical now to do the production runs of Kleenex.”

The retail analyst also pointed out some of the difficulties companies face in conducting business in Canada, such as needing to have unique packaging to reflect both official languages in the country, the country’s population being very spread out geographically, as well as fierce competition with “very strong retailers” that take up a big share of the market.

“Canada is a tricky market to do business in,” he said.

“We've talked about, many times, the big grocers occupying an enormous percentage of the market. Well, if you're Kleenex, Kimberly-Clark, you've got to deal with these huge grocers who can really kind of dictate prices to you, (whereas) in the U.S., it's a much larger market with more competitors, more grocers, so Kleenex may have more pricing power in the U.S.”

KLEENEX TISSUES WILL LIVE ON WITH NOSTALGIA, ANALYST SAYS

Regardless of the fact that Kleenex facial tissues will no longer be sold in Canada, Winder said he believes Canadians will call tissues Kleenex for many years to come.

“We're gonna continue calling them Kleenex, but it's just going to be more of a sort of a shock value,” he said.

“It's the same thing (as) when Skippy peanut butter left, or Bugles left, or Delissio frozen pizza, although not nearly to the same scale. But we're just going to continue to call it Kleenex like we always have. Even when I buy private label facial tissue now, I still call it Kleenex.”