Candy Companies Treated to Big Dollars this Halloween

A new phrase has started to pop up when discussing the confection industry: “recession proof.” And according to recently released projections of Halloween candy sales, the term is pretty accurate.

“In the week before Halloween, cash registers will ring up nearly $2.23 billion in candy sales, 600 million pounds of every confection imaginable for the nine out of 10 kids who will be ringing doorbells Saturday night,” The Sacramento Bee reported on Oct. 27.

“For the biggest sugar rush of the year, Halloween candy sales are expected to nudge up 1.8 percent over last year, said Susan Fussell, spokeswoman for the National Confectioners Association,” the article continued.

Fussell went on to tell the journalist that overall candy sales are up 3% this year despite the economy and that candy sales last Halloween still inched upwards despite being in the middle of the recession.

That’s not all the good news the National Confectioners Association has had about the industry during the worst economic downturn since the Great Depression.

Last year, the group issued a report about the financial health of their industry and had this to say:

The association isn’t the only one delivering positive news, either. A major chocolate maker spoke of the industry’s “good performance during [the] recession,” at a conference hosted by sugar producers in August. He also noted deep market penetration and the industry's ability to maintain profitability as reasons to be bullish on the candy industry’s future.

Why have makers of sweet treats been able to make more money while others have struggled in this economy? The San Francisco Chronicle recently explained it this way:

In a broad recession-related shift, many Americans have lost their taste for fancy cars, clothes and vacations, but their appetite for candy, it seems, only has become more pronounced.

The California unemployment rate climbed to 12.2 percent in August and more home foreclosures loom on the horizon, but sweets are going like gangbusters in San Francisco and elsewhere, according to store owners, candymakers and food industry analysts…

The Hershey Co., which has made popular treats since the Depression and is America's candy market leader, posted earnings in the second quarter that were 71 percent higher than a year ago, according to Marcia Mogelonsky, a senior analyst at Mintel International, a Chicago market research firm.

Mintel's data show that U.S. chocolate sales in 2008 were $16.6 billion and are expected to rise more than 2 percent to $17 billion in 2009. Candy (sugar confectionery that is not chocolate) sales in the United States are expected to be $2.16 billion in 2009, up 3.4 percent from 2008.

Mogelonsky said people buy candy and chocolate during tough times for a couple of reasons: ‘They've given up everything else, but they're not going to deprive themselves entirely; or candy is their replacement for something more expensive, like a nice dinner or another type of gift.’

In fact, many of the candy bars that remain popular today were invented during the Depression - Three Musketeers and Snickers, to name just two.

And since that article appeared, another major sugar buyer, General Mills, also had some good news to share, announcing on September 23 that its first-quarter profit had surged 51%.

America’s sugar farmers are thrilled about the sales increase.

“These are our customers and we’re happy for them; when they sell more we sell more,” explained Jack Roney with the American Sugar Alliance. “Just so long as they stop telling Capitol Hill that U.S. sugar policy is causing them financial harm; obviously that’s not the case.”