By Alexander Marrow
LONDON, Oct 30 (Reuters) - This year's early Halloween sales figures could give chocolate makers quite the fright.
Cost-of-living pressures are a big challenge for chocolate makers Hershey and Mondelez, with data from market researcher NIQ showing US consumers are so far spending less on Halloween treats than in previous years.
Health-conscious consumers are also looking for low-sugar options and snacks beyond traditional candy, according to interviews with industry experts, manufacturers
and analysts.
Halloween chocolate sales fell by $33.1 million in the nine weeks ending October 17 compared with a year earlier, NIQ data showed, the biggest drop in at least three years, led entirely by milk chocolate, with sales flat for white chocolate and marginally higher for dark chocolate.
With the midterm congressional elections approaching, US consumer sentiment has edged down to a near record low.
Reese's maker Hershey and data intelligence firm Morning Consult said in a report in August that two-thirds of parents had already bought Halloween treats in the summer.
Hershey CEO Kirk Tanner said on Thursday the company needed consumers to "show up" in what he described as the critical last few days before Halloween on Saturday, after the company lowered its organic net sales growth target for this year.
Soaring cocoa prices forced confectionery makers to raise prices over the past three years, but cocoa has dropped to under $3,000 per metric ton from a record $12,000 in 2024.
Mondelez International CFO Amit Banati said on Thursday the benefit of lower cocoa costs was beginning to come through after the Cadbury owner recorded flat North America volumes and a 1.6% price increase in the third quarter.
Mondelez's quarterly growth came more from volumes than pricing for the first time since late 2021, and Chief Operating Officer Luca Zaramella said the company would be very selective on pricing as it protects share and volume momentum.
Tangible price relief for shoppers may take a while.
The pace of price increases for consumers should slow significantly early next year as lower cocoa prices filter through supply chains, said David Branch, sector manager at Wells Fargo Agri-Food Institute. Meanwhile, producers are reformulating products and reducing chocolate content to save money, he added.
HEALTH TRENDS RESHAPE SEASONAL PURCHASES
Healthier choices are reshaping the candy aisles, driven by the growing use of GLP-1 weight-loss drugs and the Trump administration's 'Make America Healthy Again' campaign.
"Shoppers are making very different choices around pack size, price and product," said Chris Costagli, NIQ's food and non-alcoholic beverage insights lead and thought leadership vice president.
Small-pack sales are up 24% in dollar terms while every larger size is declining.
"We're seeing increases in candy with no/low/less-sugar claims ... along with growth in trick-or-treat-size rice/popcorn cakes, yogurt-coated snacks, bars, and ready-to-eat popcorn," said Sally Lyons Wyatt, global EVP and chief adviser, consumer goods and food service insights at Circana.
Mondelez is taking on the challenge directly. On Thursday it said it would acquire Undercover Snacks, whose chocolate-coated quinoa crisps carry the tagline 'healthy ingredients in disguise'.
Yoghurt-maker Chobani is promoting "no spooky ingredients" for its Halloween special Ube Sweet Cream Dairy Creamer.
“People are becoming more aware of what’s in, or not in, their food these days," said Chief Innovation Officer Niel Sandfort.
Halloween tends to be a pretty indulgent holiday, said Lindsay Haut, senior principal at investment firm Verlinvest, but consumers are adjusting how they treat themselves.
"They're either supplementing with potentially better-for-you options, but also downsizing and going into smaller treats," Haut said.
She pointed to individually wrapped Tiny Tony's from chocolate maker Tony's Chocolonely, in which Verlinvest holds a majority stake, as an example.
Plant-based protein brand ALOHA is courting consumers seeking healthier snacks, said marketing vice president Julia Shapiro.
"People are really craving other options that still satisfy that urge of what they're looking for, but maybe give them a bit more of a nutrient-dense snack," she said.
(Reporting by Alexander Marrow;Editing by Josephine Mason and Emelia Sithole-Matarise)
