The Hershey Company, the world’s fifth-largest candy maker in 2021, is warning of a shortage on Halloween candy this year.
Hershey’s issued a stern warning that it wouldn’t be able to meet the demand for Halloween or the Christmas holiday season. The decrease in resources was attributed to a lack of raw materials.
“Supply chain disruptions caused by a pandemic and the Russian-Ukrainian war have shut off edible oil and cocoa, and other food ingredients supplies, cutting production lines at packaged food manufacturers across the world,” according to The Financial Times.
“We will not be able to fulfill consumer demand because of capacity constraints,” Hershey CEO Michele Buck added on Thursday.
According to Buck, the firm gets a large portion of its equipment and goods from Europe, which has been hit hard by the Russian energy crisis. Getting cocoa and edible oil has also been affected by the Ukrainian invasion.
Despite the fact that candy is hard to get, the firm announced that it expects sales to surpass last year’s.
“Historically, Hershey’s revenue growth has been driven more by price than volume, as the firm is beginning this period with a position of strength from that knowledge,” Arun Sundaram, an analyst at CFRA Research, noted.
The Hershey Company reported net sales that rose over 19% in the second quarter, totaling $2.37 billion against projections of $2.22 billion.
Halloween is one of Hershey’s most profitable periods of the year, accounting for about 10% of the company’s overall revenue.
Hershey’s, a 128-year-old business, produces some of the most loved Halloween sweets, including Hershey’s Chocolate Bars, Kit Kats, Reese’s Peanut Butter Cups, Mounds, Bubble Yum, Twizzlers, Whatchamacallits, Jolly Rangers, Milk Duds, 5th Avenue, and Hershey’s Kisses.
On Thursday, food giant Nestle announced it had increased it’s prices by 6.5% in the first part of 2022 as a result of “unprecedented” price hikes.
Nestle – the world’s largest food firm – increased prices in North America by 9.8%.
“We restricted the impact of unanticipated inflationary pressures and supply chain restrictions on our margin growth through tight cost management and operational efficiency,” stated Nestle CEO Mark Schneider.