Chocolate Industry

America is running out of candy canes

“We had to turn down business this year. I wouldn’t say that’s 30% of overall business, but we probably had to turn down 10% of business,” said Schuman, CEO of Denver-based Hammond’s , Colorado, who added they were struggling to keep up with demand.

Candy makers, like retailers and farmers, have come under fire during the pandemic with high commodity prices, labor shortages and grunts in transportation and the supply chain, preventing them to take full advantage of the holiday season.

For over a century, Hammond’s Candies has twisted and wrapped the classic Christmas treat for small gift shops and large grocery stores. It is the largest wholesale supplier of handmade candy canes in the United States.

“So, Hammond’s sells candy canes to thousands of retailers across the country, from your local candy store to your furniture store to your hardware store to some of the biggest stores we know of,” Schuman said, citing Target. , Cracker Barrel and Cost. Plus the global market, among others.

This year, Hammond’s labor costs have increased by 30%, but staffing remains an issue: the company’s 250-person team has lost nearly 100 people.

“It has been very difficult to hire workers this year. In fact, it has probably been, in the 15 years that I have been involved with Hammond’s, it has been the most difficult to hire workers. it was difficult to hire them, the wages also continued to increase so it was really competitive in the market just with the lack of manpower and so it was a bit of a bottleneck for us Schuman said, adding that employees worked overtime every week.

Hammond is not the only one.

When the Sam’s Club, a Walmart (WMT) unit, placed an order for Doscher’s Candy Co. gourmet candy canes, co-owner Greg Clark was thrilled. Still, he said, Doscher had the staff and supplies to produce about 70% of the hand-made candy the Sam’s Club wanted.

“More and more Sam’s Club members are buying seasonal candy, including candy canes,” said a spokesperson for the company. “In an effort to meet anticipated demand, we have increased our purchases from other suppliers and advanced inventory and production where possible. “

Total seasonal confectionery sales were up 20% from a year ago, for the five-week period ending Dec. 5, according to market data from the National Confectioners Association and IRI. Winter holiday non-chocolate sales – including candy canes – increased by more than 34% from 2020.

Retailers increased the number of Christmas candy items per store by over 9%; and the total amount of non-chocolate products in stores is up nearly 23%, the data shows.

“It’s (business) has been strong. It has been strong since last October. Our business just caught fire. I don’t know how to explain it but I hope it doesn’t stop because it is is good for the people who buy the candy and taste it and get that delicious feeling and it’s great for our employees and for the company, ”said Schuman.

Many consumers scramble to stock up for the holidays after missing family reunions last year.

“This is the fourth grocery store I visit today, trying to find enough candy canes for our tree and our stockings,” growled Terri Andresson, 51, browsing Mariano’s grocery store in Chicago.

Kroger (KR), who owns Mariano’s, declined to comment.

Spangler Candy Co., America’s largest sugarcane maker, has been working extra shifts this fall to keep up with demand, President Kirk Vashaw said. The Ohio-based company turned down deals and faced supply chain issues, such as having to change candy flavor schedules due to truck delays.

For Schuman, supply chain grunts have affected his ability to get tin displays and packaging materials from China, as he sources ingredients like sugar and corn syrup from Colorado and elsewhere in the United States.

“It was a bit of a problem. We lost business because of it. We can’t control it, but when you think something happens in August and it doesn’t happen until October, it becomes a bit of a problem for Then have your customer put it on their shelf so it’s ready to sell for Christmas, ”Schuman said.

Sugar shortages

In the face of tight global supplies, some sugar suppliers have limited sales to food manufacturers.

The United States imports about a quarter of its annual sugar requirement, according to data from the United States Department of Agriculture. Part of this year’s national crop was destroyed when Hurricane Ida ravaged Louisiana, the country’s second-largest sugarcane-producing state.

Meanwhile, freight prices are skyrocketing and Brazil and Thailand – two of the world’s largest sugar producers – have had weaker-than-expected harvests. Sugar prices are at a decade high.

On these commodity prices, Schuman said the company will just have to adapt.

“We’re trying to adjust our prices or adjust our ounces to combat it, but there isn’t a lot of price a person is going to pay for a gourmet candy cane, so we’re going to have to eat some of it by. as a business and just become more efficient, ”he said.

An industry expert said some “commercial buyers view erythritol as a substitute sweetener”, referring to a corn-based sugar substitute.

But the prices of corn-based sweeteners are also rising. Clark of Doscher’s Candy said suppliers of corn syrup – used to make candy canes – cite a 10% increase in 2022.

As sugar supplies tightened, the US government adjusted sugar import quotas after some foreign sugar suppliers failed to deliver the product.

Rick Pasco, chairman of the Sweetener Users Association business group, said candy growers are affected by the US sugar policy, which restricts imports to protect local growers and therefore only supplies a fraction of sugar producers with their products. need.