Chocolate off menu for trick-or-treaters this Halloween as cost of living bites

Confectioners are shifting to gummies, licorice and flavored crèmes, as margins shrink and sales slow

Trick-or-treaters hoping to collect handfuls of chocolate this Halloween face being let down as the cost of living sees supermarket shelves stocked with cheaper alternatives this October.
US confectionery companies are offering fewer Halloween chocolates and doubling down instead on cheaper gummies and licorice such as Mondelez’s Sour Patch Kids and Hershey’s Twizzlers ghosts, according to the market research company Circana.
Prices on sugary non-chocolate sweets – though still cheaper than chocolate – are also up double digits, according to the research.
The shift to gummies, licorice and flavored crèmes comes as chocolate makers face shrinking margins and slowing sales. Consumers have been curbing their cravings for costly chocolate, and the candy companies have faced a double hit on their own costs, first from supply chain snarls during the Covid pandemic and now from a cocoa bean shortage.
“There’s just not as many items per retailer on-shelf,” said Dan Sadler, the principal of client insights at Circana, which focuses on confectionery. “We’re seeing double-digit increases in non-chocolate items.”
Candy companies took a similar approach for Easter, unveiling new products lighter on cocoa. But for Reese’s cup maker Hershey, a top US chocolate maker, the sales results were disappointing, with the company’s category for the spring holiday declining, executives told investors on conference calls. They pegged it on an earlier Easter and a shorter selling season.
A spokesman for Oreo maker Mondelez said that shoppers for Halloween are looking for more limited editions and special flavors, such as its Sour Patch Kids’ apple harvest and cherry varieties. Mondelez does not have a major US chocolate brand.
Hershey’s key new products for Halloween are its Reese’s Werewolf Tracks, which feature a vanilla crème top instead of milk chocolate, and its KitKat Ghost Toast with a cinnamon toast flavored crème, a spokesman for the company said.
The Hershey, Pennsylvania-based company sees non-chocolate candy as having potential for higher growth, the spokesman said. Last month Hershey introduced two new non-chocolate candies, Jolly Rancher Ropes and Shaq-a-Licious gummies, which are inspired by the former basketball star Shaquille O’Neal.
Hershey plans to introduce more sweets in the next several months, the spokesman said.
To be sure, the spokesman added that chocolate makes up a bigger part of Halloween sales across the candy category compared to everyday purchases.
Confectioners and retailers like the grocer Kroger started selling Halloween candy earlier than ever this year, indicating the importance of the holiday to their sales figures, and fueling decorating and party trends like “Summerween” and “Augtober.”
Kroger had Halloween candy for sale as soon as students were back to school, the earliest ever, a spokesman said. The grocer has also seen higher demand for non-chocolate candy, the spokesman said.
Hershey started selling its Reese’s peanut butter pumpkins online as early as July for the first time. The confectioner expects its Halloween sales will grow in line with total company sales for the year, the spokesman said. Hershey cut back its annual sales growth expectations to 2 per cent.
There is not only less chocolate candy for Halloween in stores, but it is also more expensive. Prices on seasonal chocolate candy have increased by as much as 7.5 per cent from last year, Sadler said.
Candy companies are increasingly relying on holidays and special occasions like birthdays for sales growth as shoppers find everyday chocolate purchases unaffordable.
Chocolate makers were exposed to higher cocoa costs when planning for this year’s holiday, said David Branch, a sector manager at Wells Fargo Agri-Food Institute, leading to higher prices at retailers.
Chocolate companies typically cover volatile commodity costs like cocoa with hedges protecting them for six months to a year.
Average unit prices on chocolate are up more than 40 per cent from 2020, according to data from NielsenIQ, outpacing broader food inflation, which has started to moderate.
Hershey announced more price increases this summer to cover the rising cost of cocoa. The Hershey spokesman said that those increases did not affect Halloween candy for sale now.
At Target, a 120-piece, roughly 46-ounce bag of Mars’s Milky Ways, Snickers, M&Ms and Twix chocolates is $19.99.
Candy companies are raising prices on candies without chocolate by double digits, Sadler said.
“Non-chocolate is catching up,” Sadler added. “When you look at the price per pound of non-chocolate versus chocolate, it’s still a value.”