The ‘Minneapolis Star Tribune’ tells this story:
With cotton supply short in 1914, a substitute was urgently needed for surgical bandages used in World War I battlefields and in hospitals. The Kimberly-Clark company developed a remarkably absorbent cotton-like wadding called Cellucotton. Cellucotton took the place of cotton bandages and was used in gas-mask air filters.
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After the war, huge surpluses of Cellucotton crowded warehouses, and Kimberly-Clark started looking for a peacetime use for the product.
The first postwar spinoff was a glamour product — a cold-cream tissue. Called the Kleenex Kerchief and advertised as a “Sanitary Cold Cream Remover,” it was used by Hollywood and Broadway stars to remove makeup. With the help of celebrity endorsements, sales steadily rose and the product remained unchanged. But then women began to write to the company complaining that their husbands were blowing their noses in cold cream kerchiefs.
About the same time, a Chicago inventor devised a pop-up tissue box. In the early 1920s, Kimberly-Clark decided to place its kerchiefs in these boxes. Now, the product won even more nose-blowing converts, for it supplied a quick and easily accessible way of containing sudden sneezes.
Consumer demand persuaded the company to change from marketing a cold-cream tissue to selling one for nose-blowing, and Kleenex was born.
– From Charles Panati’s Extraordinary Origins of Ordinary Things