Chocolate crunch: Hershey says it won't be able to meet Halloween demand this year

This Halloween may bring more tricks than treats, with candy maker Hershey warning on Thursday that it won't be able to meet consumer demand for the October 31 holiday. 

CEO Michele Buck warned about the potential shortfall on the company's second-quarter earnings call, noting that while seasonal consumer demand remains high, "We will not be able to fully meet consumer demand due to capacity constraints."

That means Halloween favorites such as Reese's Peanut Butter Cups, Kit Kat, Mr. Goodbar and Almond Joy may not be as plentiful this Halloween as in previous years.

Americans have turned to sugary treats in the pandemic, pushing candy and chocolate sales to a record high of $36.9 billion in 2021, according to the National Confectioners Association. With consumer demand rising, Hershey was faced with a dilemma, since their Halloween candy is made on the same equipment as its regular inventory, Buck noted. 

"[W]e have a strategy of prioritizing everyday on-shelf availability," Buck noted on the conference call. "It was a tough decision to balance that with the seasons, but we thought that was really important."

Of course, people who want to give out Halloween treats this October will have other choices in the candy aisle, with rivals such as Mars (maker of M&Ms and other candies) and Ferraro (Butterfinger and Crunch bars) likely stepping in to fill the sugary void.

It's not only capacity constraint that is challenging Hershey, Buck added that supply-chain issues also remain a problem. 

"I think generally we continue to see struggles across the supply chain," she said. "[W]e'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."