Clorox Co. is discovering why you should never snub a cat.

After a hack last year halted production at U.S. factories and led to shortages of its popular line of Fresh Step litters, the company is realizing that some cats have moved on.

One of those felines, Otis, wasn't a big fan of the replacement litter his owner bought when Fresh Step was out of stock last year. So 4-year-old Otis started mostly doing his business outdoors, and Chevy Wolf, his dad, hasn’t gone back to the old one. He appreciates not having to scoop litter as often and the money he’s saving not buying as much.

Cat litter will be Clorox’s toughest category, and likely take the longest, to fully recover after last year's disruptions. Sales for Clorox brands such as Fresh Step and Scoop Away shrank by about 4% in the year ended June 30, to roughly $638 million, a disappointment after the business saw strong growth during the pandemic. Competitors like Church & Dwight Co., which makes Arm & Hammer litter, have seen some of their products pick up market share, while Clorox’s shares have lagged the S&P 500 since it disclosed the hack in August last year, up 3% as of Thursday’s close compared with the index’s 25% climb since then.  

“Cats hate change,” said Linda Hall, co-founder of Cat Behavior Alliance, a nonprofit sanctuary for felines. “The secret to cats is slowly convincing them this is what they want.”

That’s what Clorox plans to do as it embarks on a rigorous campaign to win back picky cats and their owners. The company is developing new litter and pet products and stepping up advertisements to entice once-loyal customers to switch back. It’s also offering discounts to regain online shoppers who changed their recurring orders to competitors’ brands. 

“We’re now working hard to get both our in-store shoppers and online subscribers to return, which we know will take some time,” Ana Maria Vazquez-Galliano, Clorox VP and general manager of litter, said in an email.

Fussy felines

Owners’ reluctance to switch lies in how cats often react negatively to sudden differences in their litter. Some may become stressed or use objects other than the litter box to poop.

Clorox CEO Linda Rendle acknowledged the difficulties in changing litters last week during a conference, calling it a “stressful point” for cat owners. “Now we’re asking them to switch back” to Fresh Step, she added. “That’s a little bit different than asking them to use a different bleach or a different cleaner.” 

During the Fresh Step shortages, loyalists of the brand took to Reddit to complain about it being out of stock and their cats’ reactions. One poster said that it was “so frustrating to have to change brands suddenly” because their cats are “very sensitive to that kind of stuff.” Another said that their elderly cat was “protesting” a change to Tidy Cats, made by Nestle SA’s Purina, by using the shower mat while Scoop Away, another Clorox brand, was out of stock.

Hall, the cat behaviorist, managed to navigate the shortage—but it involved a little luck and a little ingenuity. When the shortage began, she happened to have a Fresh Step stash. Hall began scooping in some Tidy Cats with Fresh Step Calm to transition her cats slowly. She also made a video for other cat owners showing how to switch litters by gradually mixing the old variety with a similar new one. “You can’t just like dump the litter and fill the box with something else,” she says. 

Hall has gone back to Fresh Step since it came back in stock and only buys other brands now when in a pinch.

Tough rivalry

Capitalizing on the growing pet economy is important for Clorox. The company shelled out $100 million to open a new litter factory in West Virginia in late 2022 to meet a demand boom that had been fueled by more pet adoptions during COVID. 

Its online business took off during the pandemic when Americans shunned in-person shopping, with litter subscriptions climbing from 2020 to 2022, according to a former Clorox employee who didn’t want to be named discussing private information. Fresh Step has also seen success with new varieties including its longer-lasting Outstretch litter, launched in 2021, the company said.

Just as Clorox was expanding, however, the hack disrupted operations—and dented its litter market share. It’s down to 21.8% this year compared to 22.6% in 2022, according to data from Future Market Insights. The company has to “lure back vital subscribers for its cat litter against tough rivalry,” Bloomberg Intelligence analyst Diana Gomes said.

Clorox’s CEO Rendle said that the company is making progress recovering its business and that it grew share in the last month.

Both Arm & Hammer and Dr. Elsey’s gained on Clorox’s share during that time. Arm & Hammer’s new HardBall clumping litter is selling better than expected. In the lightweight litter category, owner Church & Dwight said its market share jumped to 8.2% last quarter, compared with just 4.5% in the prior period. 

“The competition is not just sitting still and letting them take the shelf space back,” RBC Capital Markets analyst Nik Modi said. “They just have to spend more money” on television ads and discounts to win former Fresh Step shoppers back, he added. 

Fresh Step ramped up national TV ads last year but still spent less than rivals like Arm & Hammer and Tidy Cats, according to data from iSpot.tv. The brand is on track to further increase spending this year compared with 2023.

Clorox is also “laser focused” on getting online subscribers to switch their recurring orders back to its litter brands after they were forced to change during the shortage, Rendle said.  The company is offering discounts like 35% off the first Amazon.com Inc. subscription order for Fresh Step to win back those customers. 

Molly Snyder, 34, was another a loyal buyer of Fresh Step, but now uses Tidy Cats for her two felines Piper and Edith. Snyder said she’ll stick with her routine of buying Tidy Cats to avoid upsetting her cats but that she’d consider going back to Fresh Step if they offer a special deal or an eye-catching new feature. In the meantime, she says Tidy Cats is working fine.

“They’re very similar,” she said of the Tidy Cats and Fresh Step brands. “It’s kind of like, just stick with what you know.”

Wolf, too, said that he’ll consider buying Fresh Step again closer to winter when the cold weather prevents Otis from going outdoors as much. 

“Cats are so used to this kind of routine,” he said. “It’s hard to make that switch.”

—Bloomberg News