• Hershey CEO Michelle Buck said there will likely be a shortage of Halloween candy this year. 
  • The company was not able to ramp up seasonal production due to supply and labor constraints. 
  • "We will not be able to fully meet consumer demand due to capacity constraints," Buck said. 

Halloween may be more than three months away, but top candy makers already are anticipating a shortage of the seasonal treats. 

Hershey CEO Michelle Buck told investors on Thursday that the company will "not be able to fully meet consumer demand due to capacity constraints" heading into the Halloween and winter holidays. Due to limited resources, Buck said Hershey prioritized balancing its production "to improve everyday on-shelf availability" rather than ramping up seasonal manufacturing.

"We had opportunity to deliver more Halloween, but we weren't able to supply that," Buck said. "And we were really producing. We began producing Halloween back in the spring. And that's really when we needed to make these key decisions on what we were going to produce, so tough trade-out to make." 

Americans spent a record-high of more than $10.14 billion on Halloween in 2021, as pandemic restrictions eased and traditional celebrations returned. An estimated $3 billion of this spending went toward candy purchases, according to the National Retail Federation

Hershey's scale-back comes as supply chain issues have worsened in recent months, driven by growing labor constraints and ingredient sourcing challenges, as well as international business stressors like Russia's invasion of Ukraine, Buck said. 

"Early on, it was some of the basic logistics issues largely driven by labor," Buck said. "And as we've evolved, we're now starting to see bigger concerns relative to scarcity of ingredients, needing to leverage different suppliers at higher costs and price points in order to secure production, and then also the geopolitical environment has put certain strains on the business."

Buck's remarks came on the same day that Nestlé announced it will again increase the price of its products, after already hiking costs by 6.5% in the first half of 2022 

"Pricing is taking over this year with inflation being so strong," Nestlé CEO Mark Schneider said on a media call on Thursday. "Of course we are doing everything we can to protect consumers from rising prices but we have to protect our company, too." 

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