Indiana Candy Maker Adjusts to Supply Chain Gridlock
With Halloween two weeks away, the American Licorice Co. in La Porte has moved past that candy consumption period and shifted production towards its Christmas offerings. The manufacturer of Red Vine licorice and Sour Punch candies says the fall season is important, but like many other businesses, it has had to make adjustments to deal with supply chain challenges.
“You have to stay on top of it. You’re always having to come up with new and interesting things for the consumer,” said Vice President of Marketing Kristi Shafer in an interview with Inside INdiana Business. “For a company like ours who plays in the non- chocolate arena, it’s very important. It is our largest seasonal holiday.”
The manufacturer launched several new Halloween-themed treats this year, including Candy Corn Twists and Ghoulish Grape Ropes. While the company distributed Spooky Straws and Mummy Mix to retailers, the spookiest threats might be the supply chain and the rising prices for materials and transportation.
“Everything has skyrocketed from ingredients to the cardboard boxes that we ship in. Everything has just gone up exponentially,” said Shafer. “It’s such a challenge right now to get ingredients [that] we are paying double, triple quadruple just to get things, so we don’t run out of candy.”
Shafer says the gaping holes on the candy shelves at retail stores boils down to competition. She says all candy makers are vying for the same ingredients, whether it is sugar, flavorings or colorants, which drives up their production costs. The added expense gets passed along to customers.
“It’s been extremely challenging to not pass a price increase. We did one and we’re on the cusp of, potentially, having to do another one in the near future.”
Another burden is the cost to ship goods and the lack of workers in the transportation sector. She says the problem is rooted to the beginning of the pandemic
“We got hit with that early on last year when the pandemic first happened. Retailers were so focused on keeping the toilet paper, the hand sanitizer, the soap, the essential needs in their stores, the candy and the chips and all that kind of went by the wayside.”
She says as the choked-off pipeline began to ease, demand for their products increased as stores worked to replenish barren shelves. Shafer says some retail companies overbooked their normal size of their orders, hoping to get at least a portion of the products.
“There are so many gaping holes that customers are like, ‘you know, I used to order 500 cases a month. I’m going to put my order in for 1000 and hope I get the 500. If I put in the 500, they might only give me 200,’” explained Shafer. She says her company is now working out a strategy to allocate the resources.
“We’re all up against a lot. Not just the candy industry, but all industries across the board,” said Shafer. “We’re doing the best we can to kind of manage all the obstacles we’re facing. But at the end of the day, it’s candy and we just want to deliver happy consumer experiences.”
Shafer says the ability to source raw material and distribute finished products is a major struggle.