In Biden’s America variety of supply-chain issues and labor shortages have been plaguing various industries. And your favorite chocolate brand wasn’t able to dodge it.
We’ve got bad news for anyone dreaming of collecting unlimited Halloween candy this year. Apparently, the limit does exist.
On Thursday, Hershey announced in the company’s second-quarter earnings call that it expects to face a candy shortage amid ongoing struggles with the global supply chain.
According to reports, Hershey’s CEO Michele Buck admitted that Hershey “will not be able to fully meet consumer demand” this Halloween as consumers are looking for more regular and Halloween-themed candy that the company can currently produce. The ongoing supply chain issues have affected Hershey’s production; the demand for sweet treats rose during the pandemic and has not died down since, while the public’s interest in Halloween continues to grow.
Still, Hershey’s said that sales for 2022 will top last year, despite not being able to meet demand during the busy holiday season. A recent analysis found that Hershey’s raised the prices of its various bars by a weighted average of 14%.
Goldman Sachs analyst Jason English explained:
“Management says that the incremental pricing is in response to incremental cost pressure as some hedge expirations approach. While higher pricing on higher costs is not unique to the company, we believe Hershey is enacting the increases to preserve its growth algorithm which contrasts meaningfully with center-of-plate food companies who are raising prices to minimize earnings declines.”
According to FoodDive, the entire industry is facing pressure due to the state of the American economy.
Carly Schildhaus, a spokesperson for the trade group, told FoodDive:
“There’s no question that the challenges faced across the industry — supply chain, inflation, labor shortages, broad pandemic impact and more — have disproportionately affected small and mid-sized companies compared with their larger counterparts.”
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Frankford Candy CEO Stuart Selarnick added that his Philadelphia candy company has had to get creative in order to find needed ingredients. Selarnick told the outlet that it’s the first time in company history that there has ever been trouble finding ingredients.
“You have to move on,” Selnick said. “You have to be resourceful and find other sources, other opportunities, other suppliers,” Selarnick said. “That’s what we’re really good at because we’re nimble. We can move quickly.”
Adding to the problem — albeit a bittersweet one for the candy makers given the shortage of needed supply — is that demand for the sugary confections is strong even as inflation raises costs across the board.
National Confectioners Association CEO John Downs told the media that “in contrast to rising costs for families related to inflation, health care and simply putting food on the table, candy remains a simple, affordable treat. Whether consumers found their inspiration on social media or in the grocery aisle, they reached for chocolate and candy as a means of self-care and enjoyment in an otherwise uncertain time.”
Sources: TheDailyWire, FoodDive, YahooFinance
