But how much does Halloween cost us?
Rising sugar and cocoa costs make Halloween candy more expensive. The New York Times in-depth analysis
The dry climate has increased the cost of key confectionery ingredients, driving up the prices of bars and packets of chewing gum. The NYT writes.
Low rainfall in places like Mexico, India and Ivory Coast could lead to lighter bags of candy for trick-or-treaters this Halloween, while disappointing sugar and cocoa harvests have pushed up prices some candies.
HOW MUCH THE PRICES OF SWEETS ARE GROWING
The price of candy is up 7.5% from last year and 20% from 2021, according to the latest data from the Bureau of Labor Statistics. This is a larger increase than inflation overall, and has been driven by a surge in prices of crucial ingredients such as sugar and cocoa, which are the highest in global wholesale markets for decades.
This is due to poor harvests due to the hot, dry climate and the high cost of fertilizers, among other factors. Sugar cane, which is processed into sugar, and cocoa, a key ingredient in chocolate, are particularly sensitive to periods of low rainfall in the tropical regions where these crops grow, such as parts of Asia, Central America and 'West Africa.
MEXICO AND ASIA
The United States depends on sugar imports from Mexico, whose production has fallen by more than 15% this year due to drought, according to the U.S. Department of Agriculture. The price of raw sugar traded on global markets, recently at around 27 cents per 500g, was the highest since 2011.
Some parts of Asia, where some of the major sugar producers are located, have also seen dry weather affecting crops. India, one of the world's largest sugar producers, has restricted sugar exports to protect domestic supplies.
“The Western candy consumer is essentially paying the price for bad harvests in Mexico and Asia,” said John Stansfield, senior sugar analyst at commodities data platform DNEXT.
THE SUGAR AND COCOA PROBLEMS
For candy makers, sugar is a more forgiving ingredient than cocoa, because when sugar cane is scarce or expensive, the industry can rely on sugar beets, a crop that grows in colder climates and can be refined into sugar, according to David Branch, an analyst at the Wells Fargo Agri-Food Institute.
Cocoa only grows in areas near the equator, especially in West Africa, which has been hit by drought in the last year. The effect on prices has been severe: On commodity markets, cocoa recently topped $3,800 per ton, the highest since the 1970s.
“If demand for chocolate goes up and the crop goes down, prices go up,” Branch said.
WILL INFLATION RUIN HALLOWEEN?
For many months, consumers have been grappling with high inflation, especially when it comes to food. The cost of food is influenced by climate and geopolitics, which national politicians have limited power to address.
However, shoppers are expected to spend big on Halloween, which the National Confectioners Association describes as the industry's "Super Bowl." According to the National Retail Federation, Americans will spend $3.6 billion on Halloween candy this year, a 16% increase from last year.
Part of this increase is due to food companies raising prices over the past year, often citing rising ingredient prices. Many of these companies sold fewer candy bars or packs of gum as consumers backed away, but they still managed to grow their profits thanks to higher prices.
Hershey, for example, raised prices 11% last quarter at its North American candy unit, the company reported Thursday. Although sales volume fell 1%, the unit reported a 20% increase in earnings compared to the previous year.
Consumers are increasingly responding to rising prices for private-label brands by turning to private-label products, including candy. But private-label candy has historically had limited penetration because shoppers are generally loyal to brands and may notice slight differences in flavor, said Rob Dickerson, a food analyst at Jeffries.
“Many people have tried to imitate or recreate the Reese's peanut butter cup,” he said. “No one has succeeded.”
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/halloween-aumento-prezzi-dolci/ on Wed, 01 Nov 2023 06:12:05 +0000.