While this year might be different with COVID-19 cases again rising around the world, let’s pretend for a moment this coming Halloween will be normal. So, guess what the average a family spends on Halloween candy each year? $30! Families with children spend about $35 and those without spend about $25 on candy. Everybody loves Halloween! While that $30-ish number may not seem like a lot, once you start adding up the houses on your street, neighborhood, town, state, country and world, that number balloons to a whopper – $2.6 billion. In the Baby Ruth era, a 100 Grand may have seemed like a satisfying number-talk about inflation.
A study conducted in 2019 showed that 81% of celebrants preferred to hand out candy themselves versus just 12% opting to leave a bowl on the porch. It will be curious to see how these numbers change, this year, or if people opt out altogether, preferring not to interact with strangers and minimize contact. Will the candy industry suffer, or will people still leave mounds of candy on their doorsteps?
Nestle (parent company of Butterfingers & KitKat), Hershey (parent company of the namesake chocolates and Reese’s) and Mars (parent company of M&Ms, Snickers & Milky Way) stand ready to absorb this year’s potential drop, if any, in holiday driven sales.
Did you know that M&M was named after the sons of founders of both Hershey’s and Mars, Bruce Murrie and Forrest Mars? While Nestle (NSRGY) and Hersey (HSY) are publicly traded companies, Mars has remained private. This year’s holiday sales might be lackluster, however NSRGY & HSY stock prices have both held their own through the pandemic, with more people visiting grocery stores in lieu of dining out. Cash flows have remained surprisingly stable as this surge in grocery shoppers has helped sales in a sugar industry that has come under more PR scrutiny in today’s seemingly organic or bust world. I know my wife and I are doing our part to support a sweet holiday and are dressing our eight-month-old up as Ruth “Baby” Ginsburg.
It would be a nice treat if candy sales and the stock market are not a double bubble and both march higher.
We hope you snickered at a few of our puns and have a safe and enjoyable Halloween weekend.