High Prices Create Challenges for Chocolatiers Ahead of Halloween
As Halloween approaches, the chocolate industry faces substantial challenges, largely driven by escalating cocoa prices that may push consumers toward more affordable and trendy alternatives like sour gummies. Halloween is particularly significant for candy manufacturers, accounting for nearly 18% of annual candy sales in the United States, trailing only the Christmas season.
However, chocolate manufacturers have increasingly been compelled to pass rising costs onto consumers, which has opened the door for competitors—particularly those specializing in non-chocolate sweets—who have already reported a rise in market share. The shift in consumer preference, partly attributed to the high cost of cocoa, indicates a growing trend away from traditional chocolate treats.
Despite cocoa futures in New York experiencing a decline of approximately 50% from a record high in December, prices remain historically elevated. This has resulted in mixed reactions from consumers, who have exhibited a wavering interest in chocolate as a staple choice. Data from Circana indicates that chocolate candy sales volumes dropped by 6% within the 12 weeks ending October 5, and during the same period, the average price per pound surged nearly 14%. In contrast, non-chocolate Halloween-themed candies, such as Haribo sour gummy bats, saw an increase in sales volumes of 8.3%.
Observers within the industry note a competitive climate, with preferences seemingly swinging between chocolate and non-chocolate options. That said, a significant number of shoppers, over half according to NielsenIQ research, report prioritizing gummy and hard candies in their Halloween expenditures. This reflects a broader trend where the profitability of gummy candies has risen relative to chocolate as input costs continue to climb.
Major companies like Sugarfina and Haribo are capitalizing on this trend, introducing innovative products that appeal to a younger demographic while maintaining high demand for their gummy offerings. Chocolate companies, in response, are ramping up promotional efforts and expanding product lines to stabilize their market presence, with some even looking at creative ways to maintain price competitiveness, such as incorporating nuts and creams to minimize the use of costly cocoa.
Industry giants such as Mondelez International are adapting to these challenges by focusing on gummies as a priority within their U.S. portfolios, while Hershey Co. is also innovating with new Halloween candies and flavors. This indicates that traditional players in the confectionery market are actively working to retain their consumer base amidst a competitive environment characterized by shifting tastes.
Despite ongoing challenges, including high cocoa prices and consumer preference dynamics, some manufacturers remain optimistic about Halloween sales, anticipating that demand for chocolate will remain consistent, supported by efforts to introduce new products and promotions that cater to evolving consumer preferences. As the holiday approaches, the tug-of-war between chocolate and non-chocolate treats will undoubtedly shape the landscape of the candy industry.
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