In the past there has been some discussion on this board on volumes in cat litter. This excerpt from ACO CC is illuminating:
but a bigger driver in terms of the volume impact here is the substitution of alternate materials for bentonite. And what drives that is cost if you have a packaging facility, for instance, located out in California and you can bring in 100 percent bentonite and ship it all the way from the western plants that we produce or you can bring in 70 percent bentonite and bring in some locally-sourced filler-type material at a much lower cost and there is no real discernible difference to the consumer in terms of the clump-ability and the performance of the material, then it’s a real cost driver. And I think we are at a point now where most of that displacement has taken place.
Interesting, but what happens once ACO laps the improvement in cost? Sounds like they can't generate additional cash beyond that saved each year, unless they increase sales of cat litter. And I wonder if cats and/or consumers will really not notice the difference? ODC can create lower weight litter without filler, because ODC owns less dense calcium bentonite, which I do not believe ACO owns.
Good to hear from you, biblio. I don't think ACO was happy about what is happening to them in cat litter, just saying it won't get worse as substitution is done. I would think ODC experienced some of the same pressures in their private label, lower cost cat litter, and I wonder why they didn't mention it. One negative from the ACO CC transcript for ODC is that ACO sounds like they are also developing new products for food production industry (but are behind ODC).