Aside from mask-wearing tweens and Disney-loving toddlers, no one is more obsessed with Halloween than candy and chocolate makers.
Mars, the company behind Halloween staples like M & M’s and Snickers, begins its planning for the big day two years in advance. For Hershey, which has three of the top five Halloween brands in its eponymous chocolate, Reese’s and Kit Kat, the holiday accounts for 10% of the company’s annual sales. “It’s big,” says Phil Stanley, Hershey’s director of global sales.
But the typical American holiday is just the latest tradition that COVID-19 has the potential to fail.
A recent poll conducted by Harris Poll on behalf of the National Confectioners Association is giving candy companies a sign of hope: Results found 74% of “millennial moms” and young parents say Halloween is more important . than ever this year.
“We believe that consumers will find creative and safe ways to ask for candy. It’s an outdoor event, and it’s an event where a lot of masks are already being worn, ”Hershey CEO Michele Buck said on the company’s earnings call last month. He added that if the trick or treating is less than expected, Hershey will focus on the “candy occasion,” the industry, for people who buy candy who will end up eating themselves.
Self-consumption has always been an important part of the holidays and may end up saving sales for candy makers this year. Halloween is not a one-time day for the industry, but rather a 10-week candy-shopping festival. The holidays are basically an “excuse to buy candy,” says Dickerson.
Hershey, for example, has reported that people who buy treats to eat account for nearly 50% of sales on Halloween. Those purchases start long before the holidays, and the other half of the season’s sales occur in the last two weeks of October and are designated for trick-or-treating.
Hershey begins taking Halloween orders from retailers in May and says he is very satisfied with tracking those sales. Stanley says he’s also optimistic based on how Easter unfolded. The holiday took place at the height of the pandemic, but consumers simply celebrated differently, with more events at home. Expect the same for Halloween, which could further increase consumption at home. “It’s a difficult category,” he says.
The pandemic in many ways has already demonstrated the strength of the sector, with consumers storing candy and chocolate alongside their canned soup and peanut butter. Hershey, in his last earnings call, reported that “daily chocolate sales have grown consistently 9% since the pandemic began.”
Phil DeConto, vice president of category management and buyer awareness at Ferrero, which is behind US brands like Butterfinger, Crunch and Baby Ruth, says early seasonal sales data is on par with previous years.
But companies are still adjusting their plans to minimize any potential risk. Hershey is reducing its production of seasonal treats (items such as Reese’s pumpkin) in favor of traditional products and packaging, which are easier to sell if inventory is maintained. Mondal Mondz International expects consumers to have a family-sized package rather than a personal trick or treat.
Mars Wrigley even goes so far as to launch an app called Treat Town, which allows users to “virtually order real treats.” Consumers can purchase and earn credits that they can redeem at retailers for the company’s products. It is also partnering with the National Security Council to develop guidelines on safe ways to celebrate Halloween amid the pandemic.
It’s not just the trick or treating that could get you moving online. Ferrero’s DeConto points to statistics from consulting firm Kantar that online sales experienced the equivalent of five years of adoption in the first five weeks of shutdown. It has gone from being a “strategic lever for the future to a strategic lever for now,” he says.
It’s likely to continue through Halloween, and Hershey expects curbside pickup and home delivery to account for 15-20% of sales for the season.
