Chocolate is on its way out. Why Halloween is about gummy candy now. | | phillytrib.com

Your assortment of sugary treats on Halloween may look a bit different this year as experts say chocolate won’t dominate baskets this year, instead you’ll find more tart and fruity sweets. — AP Photo/Robert F. Bukaty

Your assortment of sugary treats on Halloween may look a bit different this year. The traditional mix of caramel, nougat and wafer-filled chocolaty mounds won’t dominate Halloween baskets this year, experts say. Instead, you’ll find more tart and fruity sweets.

High cocoa prices, combined with a growing preference among Millennial and Gen Z consumers for chewy and sour treats, have prompted many confectionary giants to shift strategy this spooky season.

“We’re going to see a lot of new creations — Halloween treats in the gummy and Twizzler theme and other kinds of non-chocolate confections — hitting stores to capture that sales growth at a lower price point,” said David Branch, commodities analyst for Wells Fargo Agri-Food Institute.

While chocolate still leads the sweets category, candy is growing at a faster clip, said Sally Lyons Wyatt, an analyst at market research firm Circana, noting that teenagers to adults in their mid-40s are more likely to choose gummy, fruity and sour candy. Consumers are in part reaching for candy over chocolate because it’s cheaper. There are also more flavors, varieties and combinations packs than ever before as confectionary companies lean in to the growing interest.

“One of the key things to stay relevant with consumers is to innovate,” said Idoia Hidalgo, who works with consumer-packaged goods companies for Clarkston Consulting.

This Halloween will see fresh takes — such as flavor and shape — on consumers’ favorites: Twizzlers Ghosts, Brach’s Mellowcreme Autumn Leaves, Sour Patch Kids Apple Harvest, Nerds Candy Corn and Skittles Shriekers.

Retailers encourage this experimentation because it “helps drive interest in the candy aisle,” Hidalgo said. Some stores have had their Halloween displays up since July.

It also allows companies to diversify their offerings at a lower price as the cost of cocoa surged, Branch said. From January through September this year, the price for chocolate and confectionery manufacturing from cocoa jumped 45 percent, and it’s up 91 percent since January 2022, according to the producer price index.

Consumers have noticed: “As those price increases started going up and up and up, then the sales of corresponding units were going down,” Lyons Wyatt said. “Consumers are still buying [chocolate]; it’s just not at the same rate they did in the past.”

The National Retail Federation expects a pullback this Halloween following last year’s record-breaking sales numbers, as cautious consumers cut out impulse purchases and nonessentials. It expects spending will decrease across the board, including on costumes and decorations, by 5%, to $11.6 billion, or $103.63 per person. The trade group projects $3.5 billion will be spent on candy and chocolate alone.

“This year’s spending fits within a broader trend of consumers continuing to prioritize what’s important to them, including essentials and holidays,” said Katherine Cullen, NRF’s vice president of industry and consumer insights.

While supply chain disruptions and inflationary pressures caused the uptick in prices during the coronavirus pandemic, higher costs are now largely attributed to shortages in cocoa crops. Production this season is expected to be down 14%, according to the International Cocoa Organization.

Cocoa trees thrive best near the equator, with about 75% produced within the Ivory Coast, Ghana, Cameroon and Nigeria, Branch noted. In the 2022-2023 crop season, the region was hit with above average rainfall, causing crop diseases. The current crop season is grappling with drier conditions caused by the El Niño and warmer winds carrying dust and damaging the crops, Branch said.

The impact will trickle down into new chocolaty sweets that require less cocoa, Lyons Wyatt said. Expect more chocolate-coated items with a variety of fillings or mixed with more almonds, peanuts or walnuts than usual.

It could also cause more shrinkflation, in which manufacturers charge the same price while subtly reducing the amount in a product, Branch said. While individual candy bars may be spared because it’s harder to hide from consumers, variety packs could go down in weight but cost the same as previous years.

Meanwhile, prices will continue to inch up next year. Hershey’s chief executive Michele Gross Buck told investors during the company’s August earnings call that the company has “absorbed a lot of inflation already, but we do believe we need to pass some of it on.”

This may not bode well for consumers, retailers and manufacturers, Lyons Wyatt said.

“The main role that candy plays is treating and rewarding,” she said. “[But] price has been one of the biggest deterrents.”

The Washington Post

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