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“We will not be able to fully meet the needs of consumers,” Hershey’s CEO Michelle Bach warned in comments prepared for the company’s second quarter results Thursday.
The problem? Consumers are looking for more formal and Halloween-themed candy than Hershey can, at least for now.
Hershey is in the same boat.
The chocolate maker uses the same production lines for regular and seasonal products. That means it cannot produce both regular sweets and Halloween or holiday items. Instead, it should do one or the other.
“We had a strategy of prioritizing shelf presence every day,” Book said during an analyst call about the company’s second-quarter results. “This was a choice we had to make,” she said. “It was a tough decision.”
But it has other issues.
In addition to capacity constraints, the company is facing supply chain challenges, including rising milk prices and scarce resources. To get the ingredients they need, Hershey has to get them from other suppliers, which is expensive.
These cases are mostly related to the war in Ukraine, Buck said.
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