The Hershey Company has issued a warning that they will experience a shortage of Halloween candy this year, which will likely affect candy for the Christmas holiday season as well.
The fifth-largest candy company in the world is sounding the alarm, revealing that it will not be able to supply enough candy for the upcoming holiday which essentially centers around candy, Halloween, and also for the Christmas holiday season. In announcing the coming shortage, Hershey blamed a scarcity of raw ingredients.
According to a report from Reuters, “Pandemic-induced global supply chain disruptions and the Russia-Ukraine war have crunched supplies of cocoa, edible oil, and other food ingredients, pinching production lines of packaged food companies around the world.”
On Thursday, Hershey Chief Executive Officer Michele Buck announced that the company “will not be able to fully meet consumer demand due to capacity constraints.”
Buck also noted that Hershey sources a significant amount of its equipment and supplies from Europe, which is a problem considering the fact that the area is currently facing an economic downturn due to its reliance on energy sourced from Russia.
The Hershey CEO went on to say that, despite the looming candy shortage, the company expects sales to top last year’s numbers.
“Historically, Hershey’s sales growth has been driven by higher prices and not necessarily volume… The company is entering this period from a position of strength with that expertise,” CFRA Research analyst Arun Sundaram explained.
Net sales for the Hershey Company rose more than 19% in the second quarter, earning $2.37 billion compared to previous estimates of $2.22 billion.
As most people would expect, the Halloween season is Hershey’s best-selling time of the year, with the candy-themed holiday comprising approximately 10% of the company’s annual sales.
The 128-year-old company produces some of the most popular Halloween candy — including Hershey’s Chocolate Bars, Hershey’s Kisses, Reese’s Peanut Butter Cups, Kit Kats, Mounds, Good & Plenty, Bubble Yum, Twizzlers, Jolly Ranchers, Whatchamacallits, and Milk Duds.
Consumers are also going to be seeing a price increase for their holiday candy this year, at least from Hershey’s competitor Nestlé, though it is likely that the price increase has affected the entire industry.
On Thursday, Nestlé — the largest food company in the world — announced that it had raised its prices by 6.5% in the first half of 2022 in response to an “unprecedented” rise in costs. The company increased its prices in North America by 9.8%.
“We limited the impact of unprecedented inflationary pressures and supply chain constraints on our margin development through disciplined cost control and operational efficiencies,” said Nestlé CEO Mark Schneider.