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From Bean To Bucket: Your Candy’s Supply Chain This Halloween

Halloween requires hundreds of millions of candies, how do supply chains cope?

13Oct

Halloween is the top-selling candy holiday of the year. Americans purchase almost 600 million pounds of candy per year for Halloween, with the 158 million who participate consuming an average of 3.4 pounds each. Considering the average American eats around 25 pounds of candy a year, this means they are eating roughly a seventh in just one day.

This presents many challenges, and not just for parents dealing with kids hopped out their minds on sugar. Supply chain managers in the confectionary industry also face a torrid time ensuring that their candies are front and center on shop shelves, ready and waiting for adults to use to pay off children so they don’t vandalise their houses.

The confectionary supply chain is, however, incredibly complex, with thousands of different contributors and a number of inventory storage points spread across the world. This creates an elaborate web of information supply chain must keep track of as they try and keep pace with demand.

Sourcing

Chocolate products often contain a variety of ingredients, including sugar, nuts, cocoa, and milk. This means maintaining a network of different farms and factories across various corners of the world that need to be pulled together to create the final product. For example, cocoa is grown in West Africa, Central and South America, and parts of Asia, nuts can come from anywhere in the world - though obviously costs vary dramatically - and sugar comes primarily from Brazil. This is to say nothing of additions such as vanilla - which comes mainly from Madagascar - that give chocolate bars their identity.

These are countries where transportation is further complicated by the country’s poor quality infrastructure and the remoteness of many farms, as well as geo-political climates that are often fraught. There are also ethical issues to consider, with child labor in African farms a real issue. Child labor is both immoral and a potential disaster for your bottom line, with negative publicity likely to put off huge swathes of customers. Swiss chocolatier Lindt & Sprüngli recently announced that it had managed to make its entire Ghana cocoa bean supply chain traceable and verifiable by focusing on farming initiatives, providing farmers with training around crop protection, harvesting, biodiversity and labor rights. It is up to all confectionary companies to do the same.

Another key consideration is the weather. For example, Mars Chocolate, manufacturer of some of the most popular Halloween candies such as Snickers, Twix, and M&Ms, uses meteorologists to analyze the impacts of the weather on the chocolate candy business all over the world. They examine current weather patterns to identify how they could impact suppliers of their ingredients and production. For example, almonds is one commonly used ingredient in many of their products. According to Mars Chocolate North America's commercial vice President Greg Harnish, they source most of theirs in California, a region known for its dry summers. Almonds, however, require a lot of water, so meteorologists monitor El Nino and La Nina weather patterns to predict if the almonds will get the amount of water they need so supply chain managers can look elsewhere if necessary.

Transport

Weather can also have a dramatic impact on shipping. Once raw materials have been produced, they are transported to large-scale manufacturing facilities, where they get refined before being sent to product manufacturing facilities. A significant storm could dramatically delay shipping and create problems throughout the chain. The number of miles that must be covered getting sweets from producer to customer also means that fuel prices are an important consideration, as well as the pollution created.

Packaging

It is not just the ingredients that come from all over the world - packaging too is often sourced from overseas. Aluminum for wrappers, for example, is often imported from the West Indies or Australia. Packing confectionery and baked goods presents unique challenges. Oxygen and moisture destroys the flavor, particularly in baked goods, and diminishes the freshness. As plastics have become more common, concerns have arisen whether or not they can keep these out.

Juggling all of these balls requires a lot of coordination and cooperation to ensure costs are kept low and products arrive in stores on time. One link in the chain breaks, the less candy you’re going to have to drop in Frankenstein’s bucket, and the more chance there is you’re going to spend November 1st cleaning egg off your door.

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