“We will not be able to fully meet consumer demand,” for the October holiday, warned Hershey CEO Michele Buck in prepared remarks about the company’s second-quarter results Thursday.
The problem? Consumers are demanding more regular and Halloween-themed candy than Hershey can make, at least right now.
Hershey is in the same boat.
The chocolate maker uses the same manufacturing lines for its regular and seasonal products. That means it can’t amp up production of both regular sweets and Halloween or holiday items. Instead, it has to do one or the other.
“We had a strategy of prioritizing everyday on-shelf availability,” Buck said during an analyst call discussing the company’s second-quarter results. “That was a choice that we needed to make,” she said. “It was a tough decision.”
But it has other issues.
In addition to capacity constraints, the company is still struggling with disruptions along its supply chain, including higher dairy prices and scarce ingredients. In order to get the ingredients it needs, Hershey has to source them from other suppliers, which is costly.
These issues are largely related to the war in Ukraine, Buck said.