HERSHEY, Pa. (WHTM) – Trick-or-treating is still months away, but the Hershey Company said on a call with analysts on Thursday that it already expects a shortage when it comes to seasonal candy this Halloween.
Why? In part, Hershey said supply chain disruptions caused by the pandemic and the war in Ukraine have cut short supplies of cocoa, edible oils, and other ingredients.
Hershey said the problem, and trying to meet demand during the non-holiday period, is likely to lead to seasonal candy shortages for the dreaded season, potentially extending into December. A spokesperson for Hershey’s told Nexstar that consumers shouldn’t expect empty shelves, and Hershey’s everyday treats will be available, although holiday items in particular are out of stock.
“Seasonal consumer engagement is expected to remain high, and we expect high single-digit sales growth for the Halloween and Halloween season. Despite this strong growth, we will not be able to fully meet consumer demand due to capacity constraints,” said Michele Buck, president and CEO of the Hershey Company.
The decision earlier this year to dedicate a production line to stocking shelves in non-holiday periods, knowing that could mean a shortage of specialty candy come Halloween, was difficult, Buck said.
“It’s a choice we have to make. We had the opportunity to deliver more Halloween, but we couldn’t deliver it. We actually produce – we start producing Halloween again in the spring, and that’s really when we have to make a decision this key is about what we’re going to achieve,” Buck said during the Q&A portion of the call.
Hershey’s also cited a “tremendous increase in consumer demand in recent years” for the seasonal candy crisis, adding that despite anticipated supply issues, there will be more seasonal candy this Halloween than last year.
Along with persistent supply chain problems, our country is also facing soaring inflation. In June, Hershey raised the prices of some of its products in an apparent move to protect profits.
According to a Yahoo News report, the price for a standard Hershey’s chocolate bar up 17%.
At that time, a report from an analyst at Goldman Sachs blamed the price hikes on the inflation-driven spike in raw materials and transportation costs.
In Thursday’s phone call, the company also released its financial results for the second quarter of 2022. The company has consolidated net sales of $2,372.6 million, an increase of 19.3%.