The money's in the munchies: Unwrapping the economics of Halloween candy

Give me something good to eat

If you’ve ever wondered how “fun-sized” candy and chocolate bars came to be, well — the answer is a bit depressing. According to Time, the innovation is linked to the Great Depression, when sugar was hard to come by and candy manufacturers were suffering.

The Curtiss Candy Company, which invented Butterfinger and Baby Ruth, started to sell “junior” versions of their chocolate, both to save their use of sugar and in the hope that customers would allow themselves a “small” treat. Soon, every other manufacturer was following suit, and the tradition has lasted to this day.

In its annual survey, the National Retail Federation (NRF) reported that 73% of people in the U.S. plan on celebrating Halloween in 2023, and predicts that Americans will spend $12.2 billion getting ready for Halloween — smashing last year’s record of $10.6 billion.

The lion’s share of that amount will go toward costumes — around $4.9 billion — and about $3.9 billion will be spent on decorations like fog machines and plastic skeletons.

Candy takes the third biggest slice of the Halloween pie: Just about a quarter of that $12.2 billion is predicted to be spent on sweets alone.

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The real-life Willy Wonkas

The big candy makers — Hershey’s, which manufactures Reese’s, KitKat, and Skor, and Mars Wrigley, which makes Snickers, Twix, and M&Ms — treat October like it’s a month-long Superbowl.

To fully prepare for customer demand, CNBC reports that Mars Wrigley amps up production three months in advance; but their product planning begins much earlier than that.

Mars Wrigley’s president of sales says that the company sits down with key retailers as much as two years before they launch a product, so that they know the forecasts for trends like flavor, packaging and sustainability.

Mars Wrigley is privately owned, and doesn’t regularly publish its annual revenue: But, in 2021, it made $45 billion.

Hershey’s investor report noted that the company saw 16.1% net sales growth in 2022, up from 2021. They begin preparing their Halloween contributions in the spring of each year, on the same line as their regular candy, as insurance against running out.

Hershey estimates that sales around and for Halloween account for 10% of their annual revenue.

The precious loot

Bulk candy distributors Candy Store compiled a list of the top five most popular Halloween candies across the nation:

• #5: Sour Patch Kids
• #4: Skittles
• #3: Hot Tamales
• #2: M&Ms
• #1: Reese’s Peanut Butter cups

Reese’s Peanut Butter Cups are the superstars of the candy bunch.

The cups, which are manufactured by Hershey, have been Americans’ favorite candy for over a decade, and are a huge reason why the company is projected to make its 2023 8% net sales growth target.

In July 2023, Reuters reported that Hershey barely missed its net sales target for the second quarter of 2023. Sales were down overall, but people kept buying Reese’s Peanut Butter Cups, even though the company had to increase their per unit price.

The candy that could take the “always the bridesmaid, never the bride” award is M&Ms. It often plays tag with peanut butter cups in terms of which wins over more states, and gets top flavor marks for both its chocolate center and its satisfying hard shell.

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The reject pile

Candy Store also released a comprehensive list of the U.S.’s least favorite Halloween candies.

• #5: Wax bottles
• #4: Peanut Butter Kisses
• #3: Necco Wafers
• #2: Candy corn
• #1: Circus peanuts

Circus peanuts, which, confusingly, don’t have anything to do with peanuts other than their shape, have long lived on the list of Americans’ least favorite Halloween candy.

They are marshmallowy in texture, often banana-flavored, and dyed orange. They seem to bewilder even the most devoted candy lover.

Their main claim to fame is that they’re the inspiration behind General Mills’ Lucky Charms breakfast cereal.

The cereal was invented when a product developer at Spangler considered a bowl of Cheerios and thought a great addition would be chopped-up pieces of his favorite candy.

While the majority of circus peanuts are made at Spangler’s Factory in Ohio, they might want to set up shop in Oklahoma, which, as of 2021, was the only state to admit loving them.

Also topping Candy Store’s “Worst of” list is candy corn, which tends to be a divisive “love it or hate it” lightning rod.

USA Today reports that candy corn is coated in a confectioner’s glaze that gives each piece a shiny gloss, and perhaps a taste of bug.

Confectioner’s glaze is made from lac-resin, which comes from the secretions of the lac-bug. And while the secretion is scraped off the plants the bug visits, it’s apparently not unheard of to get a little extra.

Nothing can slow us down

Even though both trends and tastes have changed over the years, through it all, the U.S. has nurtured its collective sweet tooth. Not even the pandemic, and the resulting supply and demand issues, quelled our appetite.

Although much of the country was in lockdown in 2020, overall candy sales increased 1.9% over 2019, according to The National Association of Convenience Stores.

Despite the fact that the CDC advised families not to do the traditional door-to-door trick-or-treating, people still bought candy and ate it on their couch.

In the few years since, the market has continued to grow.

Although there is always a feeling of nostalgia both for trick-or-treating and the candy of yore, the smartest brands are also committed to reinvention. Hershey launched a plant-based version of their peanut butter cup in the spring of 2023.

There is no shame in buying as much Halloween candy as you want, even if you have no intention of handing it out to trick-or-treaters. Even “bad” candy is tasty to someone, so if you find yourself hoarding circus peanuts, don’t worry — your secret's safe with us.