P.J. Marcelo Teixeira & Huffstutter

CHICAGO, (Reuters) – Orders pour in to Andrew Schuman’s candy cane company this year. But business is anything but sweet.

Schuman, the chief executive officer at Hammond’s, said that “We’re no longer taking orders from new clients.” We can’t keep pace with the demand,” Schuman, chief executive officer of Hammond’s, said.

Like farmers and candy retailers, candy manufacturers have had to deal with the effects of the pandemic. High commodity prices, shortages in labor, transportation and supply chain problems, as well as high commodity and labor costs, has prevented them fully cashing out on the holiday season.

Hammond’s Candies, a family-owned business that has been making Christmas treats for small gift shops as well as large grocers for over 100 years, continues to make the traditional Christmas candy. This wholesale supplier is America’s largest source of handcrafted candy canes.

Hammond has seen his labor costs rise 30% in the past year. Yet, Hammond still faces a staffing problem. The 250-strong company is now down almost 100 people.

Hammond’s isn’t the only one.

Greg Clark, the co-owner of Doscher’s Candy Co.’s Gourmet Candy Canes was delighted when Sam’s Club (NYSE:), placed an order. He said that Doscher’s still had the staff and resources to make about 70% of all the handmade candies Sam’s Club requested.

According to a spokesperson for the company, “More Sam’s Club members shop for seasonal candy such as candy canes.” To meet this demand we have increased purchases at other suppliers as well as pulled back inventory where it was possible.

The five-week period that ended Dec. 5th, 2017, saw total seasonal confectionery sales rise 20% compared to last year according to IRI market data and the National Confectioners Association. Winter holiday non-chocolate sales – including candy canes – are up more than 34% from 2020.

The data shows that retailers have seen a more dramatic increase in holiday candy products per store than 9 percent. Additionally, the number of other non-chocolate items is almost 23% higher.

Consumers are scrambling after last year’s family gatherings to make sure they have enough stock for this holiday season.

Terri Andresson (51), was browsing Mariano’s Chicago grocery store when she said, “This is my fourth trip to the grocery store today trying to find candy canes for Christmas.”

Kroger (NYSE -) Co. Mariano’s’s owner declined to comment.

Kirk Vashaw, president of Spangler Candy Co. in the United States, stated that this year’s largest candy cane manufacturer, added shifts were run by the company to keep up with demand. The Ohio-based business lost customers and ran into supply-chain issues.

Vashaw stated that the cherry flavoring was due in Monday but trucks had been delayed so they would need to be stopped and switched to raspberry.

SUGAR SORTAGES

Some sugar suppliers face tight supply constraints and have reduced sales to food companies.

U.S. data shows that the country imports around 25% of its annual sugar consumption. When Hurricane Ida struck Louisiana, Louisiana’s second-largest producer of sugarcane in the country, a large portion of its national crop was damaged.

    Meanwhile, freight prices are soaring, and Brazil and Thailand – two of the world’s top sugar producers – had smaller-than-expected crops. Sugar prices are now at their highest level in a decade.

    “I’ve heard that some commercial buyers are looking at erythritol as a substitute sweetener,” said Bob Cymbala, a food trader at A&J Global USA, referring to a sugar substitute made from corn.

However, corn-based sweeteners are also on the rise in prices. Clark of Doscher’s Candy indicated that suppliers for corn syrup, which is used to make candycanes, are expecting a 10% rise in prices by 2022.

    As sugar supplies tightened, the U.S. government adjusted sugar import quotas after some overseas sugar suppliers failed to deliver the product.

Rick Pasco is the president of Sweetener Users Association, a trade association. He said that candy manufacturers are being hurt by U.S. Sugar Policy, which restricts imports in order to protect growers.

Pasco claimed that only a small fraction of what they need is being provided.