This year, Halloween candy prices are soaring as consumers grapple with the consequences of a worldwide shortage of sugar and cocoa.
Unfavorable weather conditions spanning from West Africa to India have given rise to deficits in the two essential crops used by chocolate and candy manufacturers. The impending El Niño weather phenomenon may exacerbate the situation by introducing drier conditions, potentially hindering production in the newly commenced season.
The bleak prospects for crops have recently driven wholesale cocoa prices to their highest point in nearly 45 years and sugar prices to the highest in over a decade. This has added to the expenses of producing holiday treats in preparation for Christmas. Both Halloween and Christmas are pivotal periods for candy sales, and it’s anticipated that US consumers will spend 9.2% more on sugar and sweets this year, surpassing the 5.8% increase in overall food prices.
“I would expect to see higher Halloween prices, but certainly higher Christmas and probably Valentine’s prices,” said Andrew Moriarty, Mintec’s US director of commodity insights.
Based on a report from the National Retail Foundation, it is projected that Americans will allocate $3.6 billion to candy purchases this Halloween, a notable increase from the $3.1 billion spent in 2022.
The inclination toward pricier candy is mirrored in developed economies worldwide, as evidenced by a 13% rise in confectionery costs in the UK in September compared to the previous year. Similarly, in Germany, products such as chocolate bars and gummy bears saw a substantial price increase of over 19% in the same month.
David Branch, the Vice President of Wells Fargo’s Agri-Food Institute, opines that while the surge in sugar prices is a significant contributor to the rise in candy costs, it is not the exclusive factor at play.
“The cost of ingredients is up by a lot, inflation is up and transportation costs are higher than they were two years ago. The rising prices of raw materials play a part, but you can’t pinpoint the rise in candy costs to one factor,” he said.
Nonetheless, Branch points to climate change in West Africa as a primary factor prompting major chocolate companies such as Hershey Co. to increase their prices this year.
This poses a challenge for stores like Economy Candy, which proudly claims to be the oldest candy shop in New York City. The week leading up to Halloween represents the peak of the store’s annual business, but according to Mitchell Cohen, the third-generation owner, profits will be impacted this holiday season.
Mitchell Cohen mentioned that his candy suppliers have increased prices on as many as eight occasions since 2020, shifting from their typical 1% to 2% increment every few years to a substantial 10% to 20% hike within just three years. At present, he is maintaining stable prices to satisfy trick-or-treaters, but he acknowledges that this decision may result in reduced profits for the business.
“We have a big selection of Hershey, KitKat and candy that people love to eat, but these things pre-pandemic cost us 60-65 cents, now I can’t get any of it for less than a dollar,” Cohen said.
Furthermore, it’s worth noting that the impact of increased raw material costs on candy prices can take several months to materialize. Therefore, even though the prices of sugar and cocoa continued to rise in the third quarter, the full effects may not be experienced until a later point in time.
“A lot of the time, the price that is actually going into the Halloween candy might be from several months ago when the price still wasn’t as high as it is now,” said Moriarty from Mintec.