HERSHEY, Pa. (WHTM) – Trick-or-treating is still months away, but the Hershey Company said in a call with analysts on Thursday that it’s already expecting a shortfall when it comes to seasonal candy this Halloween.
Why? In part, Hershey says pandemic-induced supply-chain disruptions and the war in Ukraine have crunched supplies of cocoa, edible oil, and other ingredients.
Hershey says those issues, and trying to meet demand during non-holiday periods, will likely lead to a scarcity of seasonal candy for the spooky season, potentially extending through December. A spokesperson for Hershey’s told Nexstar that consumers should not expect empty shelves, however, and everyday Hershey’s treats will be widely available, even if the specialty, holiday items are out of stock.
“Seasonal consumer engagement is expected to remain high, and we expect high single-digit sales growth for both our Halloween and Holiday seasons. Despite this strong growth, we will not be able to fully meet consumer demand due to capacity constraints,” said Michele Buck, the president and CEO of the Hershey Company.
The decision earlier this year to devote the production lines to keeping shelves stocked in non-holiday periods, knowing that it could mean a specialty candy shortage come Halloween, was a difficult one, Buck said.
“That was a choice that we needed to make. We had opportunity to deliver more Halloween, but we weren’t able to supply that. We were really producing — we begin producing Halloween back in the Spring, and that’s really when we needed to make these key decisions on what we were going to produce,” Buck said during the Q&A portion of the phone call.
Hershey’s also cites a “tremendous increase in consumer demand over the past few years” for the seasonal candy crunch, adding that despite the anticipated supply issues, there will be more seasonal candy this Halloween than there was last year.
Along with persistent supply chain issues, the country’s also facing soaring inflation. In June, Hershey raised the prices of some of its products in an apparent move to protect its profits.
According to a Yahoo News report, the price for a standard Hershey chocolate bar went up 17%.
At the time, the report from an analyst at Goldman Sachs blamed the price hikes on the inflation-driven spike in raw material and transportation costs.
In Thursday’s phone call, the company also released its second-quarter 2022 financial results. The company had consolidated net sales of $2,372.6 million, an increase of 19.3%.