The Grinch spooks candy makers with sugar shortages and supply chain gaps

Orders have been steadily pouring in at Andrew Schuman’s candy cane factory this year, but business has been anything but sweet.

“We are not accepting orders from new customers”Said Schuman, CEO of Hammond’s, based in Denver, Colorado. “We cannot meet the demand. “

Candy makers, like retailers and farmers, have been affected during the pandemic by high commodity prices, labor shortages, and transportation problems in supply chains, causing them It has prevented you from taking advantage of the Christmas season.

For more than a century, Hammond’s Candies has crafted and packaged the classic holiday gift for small gift shops and department stores alike. It is the largest wholesale supplier of handmade candy canes in the United States.

This year, Hammond’s labor costs are up 30%, but staffing remains a problem: The company’s 250-person crew is down nearly 100.

Hammond’s is not alone. When Sam’s Club, a unit of Walmart, placed an order for gourmet candy canes from Doscher’s Candy Co., co-owner Greg Clark was delighted. Still, he said, Doscher’s had the staff and supplies to produce about 70% of the handmade candy Sam’s Club wanted.

“More and more Sam’s Club members are buying seasonal sweets, including candy canes. ” a company spokeswoman said. “In an effort to meet anticipated demand, we increased purchases from other suppliers and increased inventory and production when possible.”

Total seasonal confectionery sales were up 20% from last year, for the five-week period ending December 5, according to the National Confectioners Association and market data from IRI. Sales of non-chocolate products during the winter holidays, including candy canes, increased more than 34% since 2020.

Retailers have increased Christmas candy items per store by more than 9% and the total number of non-chocolate products in stores has increased by nearly 23%, according to the data.

Many consumers are struggling to stock up for the holidays after missing out on family gatherings last year.

“This is the fourth grocery store I have visited today, trying to find enough candy canes for our tree and our stockings.“Grumbled Terri Andresson, 51, as she searched the Mariano’s grocery store in Chicago.

Kroger Co, which owns Mariano’s, declined to comment.

Spangler Candy Co., America’s largest maker of candy canes, ran additional shifts this fall to meet demand, President Kirk Vashaw said. The Ohio-based firm rejected orders and supply chains turned into headaches.

“We would have the cherry flavored candy scheduled for Monday, but the trucks were delayed so we would have to stop and switch to raspberryVashaw said.

Sugar shortage

Faced with tight global supplies, some sugar suppliers maintain limited sales to food manufacturers.

The United States imports about a quarter of its annual sugar needs, according to data from the Department of Agriculture (USDA). A portion of this year’s national crop was destroyed when Hurricane Ida swept through Louisiana, the second-largest sugarcane-producing state in the country.

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

“Heard some commercial buyers are considering erythritol as a substitute sweetener”Said Bob Cymbala, food operator at A&J Global USA, referring to a sugar substitute made from corn.

But the prices of corn-based sweeteners are also on the rise. Clark of Doscher’s Candy said suppliers of corn syrup, which is used to make candy canes, are trading a 10% increase by 2022.

As sugar supplies dwindled, the United States government adjusted sugar import quotas after some foreign suppliers failed to deliver the products.

Rick Pasco, president of the Sweetener Users Association trade group, said candy producers are hurt by America’s sugar policy, which limits imports to protect local producers. “We are only getting a fraction of what we need ”, added.