Brands are forced to pull off complex maneuvers, while consumers try to keep things simple.

Much like everything, the candy industry has changed quite a bit since the dawn of the new millennium. Trick-or-treat bags are undoubtedly filled with much more variety at the end of the night, with the rise of “better for you” options and new candy startups. Even Tesla filed a patent for several confections earlier this year (… why?)

Outside of the Halloween season, chocolate and candy is typically an unplanned purchase, making it an interesting category to market. It falls into the “anyone with a mouth” audience target, and brands aim for awareness, penetration and moving stock off the shelves over ROI. That being said, companies like Hershey are at the forefront of AI and automation, handing over the reins to algorithms to boost media spend in zip codes that were falling short of their 85% sell-through average. They were able to boost sell-through to 90% in those underperforming markets. 

The candy consumer is so fickle that Hershey even had to create a “moment of chaos” leading up to the Super Bowl by threatening to change the formulation of Reese’s cups. They used their Super Bowl spot to unveil their true intentions - launching a version of the peanut butter cup with caramel, while still keeping the original recipe in circulation. 

Despite innovative marketing, new products, and changing tastes, when it comes to Halloween, consumers seem to be drawn to nostalgia over the new and exciting. 

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The Classics Still Dominate

Despite the increased variety and creativity in the confection industry, the classics still win out, according to Attain data. During the 2023 Halloween season, chocolate candy accounted for nearly 66% of candy purchases. Reeses was unsurprisingly the most popular brand (33%), followed by Hershey’s (21%) and Snickers (12%). 

‍The Retail Equation

Shelf space, positioning and retailer relationships are likely the leading factor for candy brands during the Halloween season. According to Attain data, consumers buy the majority of their Halloween candy at big box stores (41.4%), followed by grocery stores (28.9%). This is somewhat surprising, given the cost per unit at big box stores clocks in as the most expensive per unit (excluding club stores, which offer larger sizes). Consumers are also making an average of 3 separate candy purchases leading up to Halloween, indicating that purchasing too early might lead to sneaking Halloween candy ahead of the big day (guilty). 

Newer entrants to the candy game rely heavily on retailers and Halloween as an opportunity to break through. Better-for-you brand Unreal has formed a close partnership with Target, and has earned their place on the shelf next to brands like Hershey. This year, Unreal started selling a 20-piece variety bag geared toward trick-or-treating, which will undoubtedly help drive their awareness and first-time purchases. 

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Candy Costs 

The cost of candy has been rising, spiking to the highest rates in 2022 due to several factors  due to sugar and cocoa shortages and Covid supply chain disruptions. This year, costs are only expected to rise .9% on the whole, but the costs of cocoa specifically continue to rise due to weather events. This has candy manufacturers focusing on non-chocolate products, despite the fact that chocolate is a clear favorite of consumers. 

Initial data seems to indicate that consumers are still choosing chocolate over everything else, which follows the trend of consumers bucking expectations of spending behavior during times of high inflation. Chocolate, unsurprisingly, is one thing we aren’t willing to sacrifice.