Mainstream brands are betting that working from home is here to stay

As a result, many food and consumer companies are investing in factories, equipment and brands to supply more of these items for years to come, seeking to accommodate consumers who make more coffee, shop for more casual clothing. and stretch the beard with trimmers and balm rather than shaving them.

Conagra brands Inc.

and Kraft Heinz Co.

purchase and upgrade equipment to prepare more meals at home. General Mills Inc.

added a Cinnamon Toast Crunch cereal manufacturing line at a plant in Georgia, which the company says is one of its costliest capital projects to date. Kimberly-Clark Corp.

converts a factory to make toilet paper for homes rather than offices, and Procter & Gamble Co.

adds beard care products in addition to Gillette razors.

The decisions follow a period of unprecedented growth for grocers, whose sales have jumped with the onset of the pandemic. These companies initially added changes and reduced the variety of products to increase capacity, but many resisted more sustainable investments that could backfire if demand declined.

The pandemic has lasted so long that people have developed new habits and purchased equipment to help them work from home for years, said Bob Nolan, head of consumer information and data at Conagra. “It gives us confidence that it’s not just lightning in the pan,” he said.

Conagra said it was adding a manufacturing line at a factory in Iowa, which would significantly increase its ability to make Healthy Choice, Marie Callender and other frozen meals. The food maker has also invested to speed up Orville Redenbacher and Act II popcorn machines at a plant in Indiana, expecting people to continue to watch movies at home for a while.

Global Workplace Analytics, a teleworking research and consulting company, estimates that about a quarter of American workers will be at home at least several days a week by the end of 2021, up from around 4% before the pandemic. For example, Google parent Alphabet Inc.

expects employees to return to offices starting next fall instead of summer, but the tech giant will test the ability for staff to continue working from home for part of each work week.

Kate Lister, president of GWA, said the more people who make homework a permanent part of their routine during the pandemic, “the greater the adoption when the dust settles.”

Campbell Soup Co.

said this month he expected remote workers to also want more of his food after the health crisis. Campbell is expanding its capacity to manufacture Pepperidge Farm Goldfish crackers and Kettle and Cape Cod chips.

There is a risk. Campbell and General Mills both said sales growth was already slowing since the start of the pandemic. There is no guarantee that demand will remain high enough to require additional production capacity.

General Mills said earlier this month that it was hedging its bets primarily using short-term third-party manufacturers. “This allows us to cut back as demand comes out of its peak,” said CFO Kofi Bruce. “We have allowed ourselves to be nimble so as not to integrate many of these costs into our structure.”

Others are also moving forward. Kraft Heinz Co.

increased production of its most in-demand products such as Kraft Mac & Cheese mugs, Oscar Mayer deli, and Philadelphia cream cheese by about 20% during the pandemic. The company is now spending more than $ 100 million to increase its production capacity next year.

“It’s a company that has been relatively stable for a while at best,” said Adam Butler, president of Kraft’s Easy Meals Made Better division. “Now we want to double down.”

Gear shifting is particularly expensive and complicated for manufacturers of paper towels and toilet paper. Consumer grade products are typically made on different equipment, using different materials from the thinner, more utilitarian versions used in public buildings and businesses. This meant consumers couldn’t find enough toilet paper during much of the pandemic.

Kimberly-Clark, maker of Cottonelle toilet tissue and Scott paper towels, will transfer some of the consumer-grade production to a plant in Mobile, Ala., Which manufactures facial tissues and paper for offices, said the CEO Mike Hsu.

Amy’s Kitchen is opening a factory in San Jose, Calif., And another on the East Coast in 2022 to make more organic soups and frozen meals that have grown in popularity during the pandemic, chief executive Xavier Unkovic said.

Other companies expect to benefit from the return of workers to their offices. Clorox Co.

, which has spent most of this year making efforts to meet demand for cleaning products, from bleach to its disinfectant wipes, wants to expand its sales to businesses.

“As people reenter public life, they seek reassurance that the spaces they enter are clean and sanitized,” said Linda Rendle, CEO of Clorox.

Other manufacturers expect demand for home and office products to stabilize. Procter & Gamble, which makes Charmin toilet paper and Bounty paper towels, and Georgia Pacific LLC, maker of Brawny paper towels and Quilted Northern toilet paper, said they had no plans to add substantial capacity. consumer products.

But P&G has invested this year in products aimed at bearded men alongside its Gillette razors and shaving cream. Estee Lauder Cos. And Coty Inc.

have expanded their skincare lines as makeup sales plummeted.

Jm smucker Co.

restarted idle machines and upgraded others to make sizes and varieties of Folgers and Dunkin ‘coffee, such as single-serve pods, which are expected to be popular with people working from home.

Smucker’s COO John Brase said, “We’d be crazy not to be opportunistic.”

Write to Annie Gasparro at [email protected] and Sharon Terep at [email protected]