Scary task of figuring out how much candy to make
Modelez’s candy unit cuts production of trick-or-treat sizes
Martin Parent was thinking about Halloween last spring. By late April, his team at the Canadian headquarters of Mondelez International Inc. — the candy and cookie conglomerate behind the Cadbury and Maynards brands — had to make a final decision on how many mini chocolate bars and little bags of candy its factories would make for the annual occasion.
At the time, the complex forecast models that food manufacturers and retailers use to predict demand had been thrown completely out of whack by the pandemic and resulting economic lockdowns.
“We didn’t know what kind of environment we’d be in, you know, whether we’d be in complete lockdown or not,” the president of Mondelez Canada said.
The Mondelez candy and chocolate factories in Toronto and Hamilton were already dealing with more demand, as shoppers snacked at home more, as well as reduced capacity, due to social distancing rules on the production floors, he said.
To prep for Halloween, the production team needed enough advance warning in order to buy the supplies, all the different little packages for Caramilk, Mr. Big, Wunderbar and Sour Patch Kids, as well as retool the production lines to make bite-size versions.
At the end of April, Parent said his team decided to pull back on Halloween and only produce the company’s top sellers. He reached out to executives at Canadian grocery companies to suggest they cut their orders.
“We called them to say, ‘Well, you should reduce it by 20 per cent, 25 per cent,’” he said. “It was a tough decision. Naturally, there’s consequences financially.”
Halloween is one of the biggest holidays of the year for Mondelez’s candy-andchocolate segment, he said.
The event is included in the back-to-school segment, which accounts for 20 per cent of annual sales.
If they guessed wrong and made too much, boxes of Halloween candy would be left in stores in November, forcing retailers to liquidate the products.
In making the decision, Parent said Mondelez used Easter as a guide, when chocolate consumption was apparently strong, though people purchased it differently.
“We didn’t expect trick-ortreating to be as big as usual,” he said.
Instead, they expected to see the rise of what he called “self-treating,” with people only buying candy for themselves, their kids, close friends and family. That may be even more popular in cities where governments are advising against a traditional Halloween, such as in COVID-19 hot spots in Ontario and Quebec.
“Your kids, you don’t give them a 10-gram fun treat. You give them a full bar,” he said, adding that sales of large chocolate bars are up roughly 10 per cent in the past eight weeks, compared to a year ago.
“I’m not saying that it’s fully related to (Halloween), but people are buying more treats for themselves in bigger formats, or expect to give (them) at Halloween to their kids or surrounding neighbourhood … because it’s people they know.”
Mondelez Canada also decided to focus on smaller boxes of Halloween treats, guessing that fewer kids would go trickor-treating. The company said it moved away from 115-piece boxes of assorted Cadbury or Maynards products and is making more 24- and 45-piece boxes.
In all, the company reduced its Halloween-related stock keeping units (SKUs) — an industry term for a specific product in a specific package — by roughly one-third, and pulled back its total production volume of Halloween-specific products by around 20 per cent, the company said in a statement.
That doesn’t mean the company made less chocolate and candy, just fewer small bars and bags.
Parent said the company’s overall chocolate and candy output in Canada for the season is “about flat” compared to last year. And by cutting some of the Halloween SKUs, the company was able to deliver to stores earlier for shoppers who wanted to avoid any potential rush or just treat themselves. The company’s sales were actually higher than normal earlier this month.