HERSHEY, Pa. — TheHershey Co. disclosed that there will not be a candy shortage this Halloween after a statement by Michele Buck, Hershey chairman and CEO, that led many to believe the company would not be able to produce enough candy for this year's holiday.
“Seasonal consumer engagement is expected to remain high, and we expect high-single-digit sales growth for both our Halloween and holiday seasons,” Buck said during the company's recent earnings call. “Despite this strong growth, we will not be able to fully meet consumer demand due to capacity constraints.”
However, Ashleigh Pollart, manager of content strategy and management at The Hershey Co., provided more context to the situation.
“We do anticipate high-single-digit growth for our Halloween and holiday seasons and will have even more seasonal products available to the consumer this year than last year,” Pollart said in a statement provided to CSP.
In 2021, total chocolate sales were up 9.2% while nonchocolate sales were up 14.5%, according to the National Confectioners Association (NCA). Suppliers had to keep up with this surge in candy sales during the pandemic. The Hershey, Pa.-based company uses the same manufacturing lines for its regular and seasonal products, which leads to capacity constraints.
“We made the decision in the spring (when we start making Halloween products) to focus on everyday products to improve on-shelf availability,” Pollart said. “This strategic decision was made not due to the reasons some outlets are reporting, but rather due to everyday and seasonal production occurring on the same lines and having to balance our everyday and seasonal portfolios. As in years past, our everyday, snack size assortment can be applied to seasonal displays if consumers just can’t get enough of our Halloween and holiday products. Moving forward, with higher inventory levels and more capacity, we believe we’ll be well positioned to deliver for the consumer whether they’re reaching for everyday or seasonal products.”
In addition to capacity constraints, the company is still struggling with disruptions along its supply chain, including higher dairy prices and scarce ingredients. Hershey sources ingredients from suppliers.
“Certainly, the Ukraine-Russia issue created some scarcity and issue with ingredients,” said Buck. “And more recently, there have been additional restrictions from Russia on the EU relative to natural gas. Germany will be impacted. That's an area where we source a lot of equipment, supplies, as do many of our suppliers.”
Supply constraint could put pressure on the stock in the second half of the year, according to Buck. The shortage, however, is expected to be short-lived. Hershey anticipates it will have inventory back up to meet consumer demand into 2023.
The Hershey Co., based in Hershey, Pa., has more than 80 brands around the world that drive $8 billion in annual revenues, including Hershey’s, Reese’s, Kit Kat, Jolly Rancher, Ice Breakers, SkinnyPop and Pirate’s Booty.
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