Hershey is in store for a Halloween nightmare of sorts, saying it won’t be able to meet consumer demand this October.
The candy maker’s CEO Michele Buck warned of the shortfall during the company’s recent second-quarter earnings call, explaining that Hershey won’t be able to meet consumer demand “due to capacity constraints.”
Buck said Hershey is dealing with a shortage of essential ingredients such as cocoa and edible oil and, in order to source the ingredients it needs, the company is being forced to locate other suppliers, reported People (July 29). Hershey also suggested a candy shortage could occur due to supply chain issues largely stemming from the war in Ukraine.
And the timing couldn’t be worse.
Candy and chocolate sales reached a record high of $36.9 billion in 2021, according to the National Confectioners Association, indicating rising consumer demand, reported CBS News (July 29). Hershey also posted solid results for the most recent quarter, with net sales increasing 19% to $2.37 billion.
Yet, due to multiple issues, Halloween staples like Reese’s Peanut Butter Cups, Kit Kat, and Almond Joy won’t be plentiful this October 31.
“We have a strategy of prioritizing everyday on-shelf availability,” Buck noted on Hershey’s conference call. “It was a tough decision to balance that with the seasons, but we thought that was really important.”
Throughout the pandemic Hershey has dealt with supply chain disruptions.
“I think generally we continue to see struggles across the supply chain,” Buck said. “We’re now starting to see bigger concerns relative to scarcity of ingredients needing to leverage different suppliers at higher cost and price points in order to secure production.”
To remedy the situation, Hershey plans to introduce additional manufacturing lines to meet expected growth in demand, People reported. The company said in a press release that the profit from its predicted sales growth is also expected to offset any losses incurred by the current scarcity of resources.