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Fewer Halloween candies introduced

October 29, 2008|The Associated Press

MILWAUKEE — With a big pullback evident in consumer spending, candy makers were a bit spooked about this year's Halloween season.

They introduced fewer Halloween-themed products for their third-biggest selling season of the year, but analysts say the companies have nothing to worry about: They expect this year's Halloween to be bigger than ever as people seek a break from the downright scary economy and stressful campaign season.

Candy makers, judging by the fewer debuts of Halloween candy this year, weren't sure how the holiday would go because of the economy, said Marcia Mogelonsky, a senior research analyst with Mintel International in Chicago. But as the economic situation worsens, and worries mount about investments and job stability, Halloween seems to be getting stronger.

"Halloween for grown-ups is a chance to let off some steam, and for kids it's a chance for grown-ups to prove to kids the world is not falling apart. We still have Halloween," she said.

Parents such as Bonnie Raimy are planning big Halloweens this year. Her home, with its candy corn lights and ghosts hanging from trees, was the first one decorated for Halloween on her street in Madison, Wis. The holiday is a big one for her family.

"I think people still want to get together and celebrate and not want to be miserable all the time," she said.

But facing widespread consumer weakness across many sectors, there was some hesitation by candy makers.

There were 35 new chocolate products for this season, compared with 49 last year, Mogelonsky said. For sugar and gum confectionaries, new product launches went from 119 to 54 this year.

"It says to me that manufacturers are perhaps going into the holiday season a little more cautiously than they did last year because it's very hard to sell that stuff after Halloween. You lose money on it when you mark it down after Halloween," she said.

Hershey Co. Chief Executive Dave West voiced concern in his company's recent third-quarter earnings call when asked about the effects of the economy and price increases, which many food makers have implemented to help recoup high ingredient costs.

"So particularly in these economic times, as we head to the fourth quarter," he told investors, "we are cautious about what we put into the system for Halloween and the holidays."

Ryan Bowling, a spokesman for Mars Inc., the maker of M&Ms and Snickers, said the number of varieties the company produced for Halloween did not change this year.

The stakes can be big if Halloween -- or any specially themed candies -- don't sell. Leftover items typically are sold at a steep discount, often 50% or more, so retailers and candy makers may take a big hit to their profits. That's what the companies could have been scared of when they introduced fewer Halloween products this year, Mogelonsky said.

The season is an important one to candy makers; last year the week of Halloween accounted for nearly 4.4% of their annual sales, Nielsen Co. reported. In a typical week, candy makers make just under 2% of their annual sales.

Halloween isn't even the top holiday for candy. That is Valentine's Day, then Easter. Halloween is a close No. 3, followed by Christmas.

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