News Article:

For the second Halloween in a row, U.S. shoppers are facing sharp increases in candy prices, with inflation rates in the double digits, according to a report by NBC News. Data from Datasembly, a retail price tracker, reveals that candy and gum prices have risen by an average of 13% this month compared to last October, which is more than double the 6% increase seen in overall grocery prices. This spike comes on top of a 14% increase in candy and gum prices in October 2022.

The soaring prices of candy have led to concerns among consumers who are searching for affordable options. Jessica Weathers, a small business owner from Shiloh, Illinois, expressed her frustration, stating, "The price of candy has gotten to be outrageous. It doesn't make sense to me to spend $100 on candy." Weathers mentioned that she had significantly reduced her candy purchases this year and plans to turn off her porch light on Halloween once she runs out.

To cope with the rising costs, many consumers are adjusting their candy preferences. Market research firm Numerator reports that approximately one-third of U.S. consumers intend to opt for value or store brands when purchasing candy for trick-or-treaters this year.

The main cause of the surging candy prices is adverse weather conditions. Heavy rains in West Africa last fall led to limited cocoa production, with cocoa prices currently at 44-year highs. Furthermore, El Nino conditions are anticipated to persist in the region, causing drier conditions and exacerbating the situation. Dan Sadler, principal of client insights for Circana, a market research firm, warns that relief from these high prices may not be in sight until the first half of 2024.

Another contributing factor to the price hike is the increased cost of sugar. Global sugar prices have reached a 12-year high, primarily due to India banning sugar exports for the first time in seven years after monsoon rains damaged the upcoming harvest, coupled with decreased output in Thailand.

These rising costs, combined with higher expenses for labor, packaging, and ingredients like peanuts, have resulted in price increases for all types of candy. For instance, discount grocer Aldi is advertising a 250-piece variety pack of Mars Inc. chocolate bars, including Milky Way, Twix, and Snickers, for $24.98. Two years ago, the same package was advertised at $19.54.

Hershey Co., which has consistently raised its prices by 7% or more in each of the past seven quarters, has acknowledged the impact of higher prices on consumer demand. The North American confectionery sales volumes of Hershey's fell by 1% in the July-September period. In response, Hershey's President and CEO, Michele Buck, emphasized the importance of value and affordability for consumers, stating that the company is actively working to meet their needs by offering products in value stores and various price points.

With candy inflation persisting and affordability becoming a pressing concern for consumers, it remains to be seen how the industry will navigate these challenges and continue to provide Halloween treats at reasonable prices in the years to come.