The global machine keeping hand sanitizer available during Covid-19

The global machine keeping hand sanitizer available during Covid-19
Image: Carlo Cadenas for Quartz
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All around the world, hand sanitizer sales have shot up as the Covid-19 pandemic pushes people’s hygiene precautions into overdrive. Global demand for the product has skyrocketed. Stores rushed to ration supplies by limiting how many bottles a customer could buy; vendors hiked prices; a pair of US-based brothers hoarded 17,000 bottles of the stuff; and thieves ripped sanitizer dispensers off hospital walls.

A bar sign in Hong Kong tried to bring some humor to the frenzy: “Never in my whole life would I imagine my hand would consume more alcohol than my mouth!”

Hand sanitizers exemplify how even a simple bottle of clear, gooey liquid taps into a supply chain that spans the globe. The sanitizer is certainly no iPhone, with its complicated electrical components and as many as 75 different types of minerals sourced from all over the world before being assembled in China. But the production of the viscous disinfectant is still dependent on materials that come from lots of different places.

Take, for example, a bottle of hand sanitizer produced in New Zealand. The country is a net importer of the product, according to World Bank trade data, but domestic manufacturing has been ramped up to meet demand. The main ingredient in most sanitizers, making up 70% of the product, is ethanol, a type of alcohol. New Zealand’s main supplier of ethanol is dairy giant Fonterra, since ethanol is a byproduct of milk processing (lactose in whey is fermented with a special yeast, converting the sugar into ethanol). The thickening agent, which gives the hand sanitizer its goopy consistency—many brands use a substance called carbomer polymer— is probably flown in from the US or China. The plastic bottle is probably manufactured domestically, but the pump top is likely sourced from abroad.

Every step in this process has to go off without a hitch, since a shortage of even just a single ingredient can create a bottleneck. But as air traffic has been heavily disrupted as a result of the pandemic, supplies have been held up, throwing a wrench into the production process. A survey conducted in April by Accord, an Australian trade association for hygiene and cosmetic products, found that three-quarters of companies producing hand sanitizer were reporting shortages of ethanol and bottle pumps.

New Zealand has 22 manufacturers producing about 100,000 liters of hand sanitizer in any given month, according to Garth Wyllie, executive director of Cosmetics New Zealand, a trade association. Production started ramping up in January as demand picked up, and by late April the country was making 1 million liters of sanitizer per month, or 10 times the usual volume, according to Wyllie. It was able to do so largely because it had a stock of some 350,000 liters of ethanol in store in January, which it quickly was able to incorporate into hand sanitizer production. The country also grew its stock of ethanol as manufacturers re-directed ethanol towards sanitizer production instead of fuel.

“We were fortunate. We had, in the country, another 850,000 liters of ethanol, so we were able to start cranking up the production locally,” Wyllie said. Fonterra, for its part, had redirected more than 400,000 liters of ethanol for hand sanitizer production by early April. And once milk production is in full force by late June, ethanol production will go up even more, Wyllie said, perhaps even exceeding demand in the country. “We may end up being a net exporter. Or we may make even more sanitizer, and export that.”

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A sanitized history

Hand sanitizer was not always such a globalized product. In fact, it has only become widely used commercially in the last three decades. The use of alcohol as a disinfectant, however, dates back millennia.

The word alcohol itself derives from the Arabic “al kohl,” which was used by the ancient Egyptians to treat eye infections in babies, and for eye shadow. In the Middle Ages, the physician and philosopher Paracelsus Theophrastus von Hohenheim coined the name “Al-Kool” for the antiseptic properties of wine. A few hundred years later, in 1875, Leonid Bucholtz laid out the antiseptic properties of ethanol in an article titled “Antiseptica und Bakterien.”

In Europe, the use of alcohols to disinfect hands and skin has been standard practice since the early 20th century, according to the book Disinfection, Sterilization, and Preservation. Ethanol was a preferred skin antiseptic in US hospitals in the 1930s, and more than 60% of all hospitals were using it by the mid-20th century. But by the 1990s, according to the book, ethanol’s popularity as a skin disinfectant had waned in US hospitals.

In the late 1980s, a family-owned American company named Gojo invented an alcohol-based hand sanitizer, which it named Purell. The Ohio-based company had already been in the hand-cleaning business for decades by then. Founded in 1946 by husband-and-wife team Goldie and Jerry Lippman, Gojo had started off making a heavy-duty, petroleum-based hand cleaner designed to scrub off stubborn grease and dirt for workers like auto shop mechanics. In the decades that followed, Gojo expanded into other products, branching out from industrial hand cleaners to solutions aimed at food and healthcare workers, as well as everyday users like students and office workers. In 1988, the company unveiled its latest product: the Purell hand sanitizer.

Though Purell is today a leading market player with about 25% of the US market and widespread global brand recognition, consumers weren’t interested at first. “It opened a lot of doors for us, and we sold more soap because of it,” Joe Kanfer, the former CEO of Gojo, told the New Yorker. “But, actually, nobody bought it.”

For about a decade, the product was mostly used by a few businesses and internally within Gojo. It wasn’t until 1997 that Purell hand sanitizer hit the consumer market. One of its first major customers was supermarket chain Wegmans, according to the New Yorker. Gojo invested heavily in marketing efforts, and by 2000 it commanded half of the sales in the hand sanitizer market, then-vice president of sales and customer development Dan Mack said in an interview at the time. Eventually, Purell hand sanitizer came to be sold everywhere: pharmacy chains, supermarkets, convenience stores. Donald Trump, during his 2000 presidential campaign, even handed out small bottles of Purell stamped with his campaign website to reporters at a gathering in California.

And now, as the world battles the pandemic, hand sanitizer has become an important tool in our collective disease prevention arsenal. While by no means a complete replacement for washing hands with soap and water, hand sanitizers are useful in everyday settings—at a payment counter, for example, or after pressing an elevator button—as well as for medical professionals when they move between patients or immediately after taking off gloves.

From the original team of two more than half a century ago, Gojo has now grown to 2,500 employees around the world. Among them is a team that is constantly monitoring public health situations around the world, including emerging pathogens, that can prompt a spike in demand. “That team became aware of the developing [Covid-19] situation in December, and we activated our demand surge preparedness team at that time,” said Samantha Williams, senior director of corporate communications at Gojo. By January, it had significantly increased production, and the firm is now operating 24/7 at full capacity. 

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Rethinking the supply chain

Because ethanol is a major ingredient in hand sanitizer, a crucial part of sanitizer production is making sure there’s enough ethanol getting to manufacturers. And companies are getting creative.

Taiwan and Australia, for example, inked a deal in late March to swap fabric and ethanol. Since Taiwan’s mask production kicked into high gear early on in the pandemic (a real-time digital map showing mask supplies at pharmacies was quickly rolled out to assuage people’s fears of shortages), the country managed to avoid the frantic run on masks seen elsewhere. In late March, Taiwan agreed to give Australia three tons of non-woven fabric—enough to produce 3 million masks for frontline medical workers—in exchange for 1 million liters of ethanol, which would make more than 4 million bottles of hand sanitizer. According to Taiwan’s ministry of economic affairs, the extra ethanol will ensure Taiwan has enough of the alcohol to meet customer demand for hand sanitizer in the near future.

Other companies are pivoting from producing their typical goods to make sure the flow of sanitizer doesn’t stop. Breweries, which often have ethanol on hand because it’s produced during the beer brewing process, are sharing the wealth. Within days of the UK’s lockdown going into force in late March, the Scottish Whiskey Association launched its hand sanitizer portal to connect breweries and distilleries, mostly in Scotland, that are making hand sanitizer, or that can provide high-strength ethanol to groups like frontline health services that need them. Worldwide, breweries large and small have taken to producing sanitizer themselves using existing ethanol supplies and bottling machines.

Foam Beer Brewery, in Hong Kong, is doing just that. Just a few months ago it was selling protest-themed bottles of beer; it is now making small batches of hand sanitizer using a recipe from the University of Hong Kong. ”I want to encourage others to take the extra step to make their own materials,” said the brewery’s director, Angus Chan.  

With a coronavirus vaccine still months away at the earliest, demand for hand sanitizers is expected to remain high. Already, businesses are trouble-shooting manufacturing processes and mapping out ways to deal with a global surge in demand alongside widespread supply and transport disruptions.

“I think everybody is looking at their supply chain and thinking, what if we have to face this [disruption] again?” said Wyllie, of New Zealand. Government officials, he said, are looking at ways to better support domestic manufacturers so New Zealand can be less dependent on other countries for supplies. That may mean shortening the supply chain, so that when other countries are closed for business or when transit is disrupted, New Zealand isn’t left in a bind, he said. “We don’t want to be reliant on having to import ethanol when we don’t have much on standby here.” 

But there’s also the danger of countries becoming overly protectionist in their pursuit of self-reliance, said Hanwei Huang, an economics professor at the City University of Hong Kong.

Huang has studied the characteristics of Chinese manufacturers that were the most resilient to supply chain shocks during the 2003 SARS epidemic. He found that those resilient companies had two factors in common: they diversified the suppliers they sourced from; and they kept a several-month buffer in their inventory in case imports were disrupted.

But many companies don’t have those qualities. Because excess supplies are often expensive to store, firms increasingly opt for the just-in-time model in which supplies are brought in as needed, keeping the inventory small and storage costs low. This all works well—until there is suddenly a demand surge and a supply shock, as we’ve seen with this pandemic. The just-in-time tactic, Huang said, is largely used by companies that want to increase their profits by improving their efficiency. But, he added, the crisis has now put another variable into the equation: risk management.

“One lesson that we have to draw from this crisis is that, whereas previously we were thinking about how to improve the efficiency of the supply chain, now is the time to think more about improving the resilience of the supply chain,” he said.