Sugar cane makers hit by sugar shortage and twisted supply chain ahead of holiday season

Dozens of candy cane flavors are seen in the store, at Hammond’s Candies, America’s largest wholesale supplier of candy cane, in Denver, Colorado, the United States on December 16, 2021. Photo taken on December 16, 2021 .

Alyson McClaran | Reuters

Orders have poured into Andrew Schuman’s cane business this year, but business has been anything but soft.

“We don’t take new orders from new customers,” said Schuman, CEO of Hammond’s, based in Denver, Colorado. “We cannot meet the demand.”

Candy makers, like retailers and farmers, have come under fire during the pandemic with high commodity prices, labor shortages and grunts in transportation and the supply chain, preventing them to take full advantage of the holiday season.

For over a century, Hammond’s Candies has twisted and wrapped the classic Christmas treat for small gift shops and large grocery stores. It is the largest wholesale supplier of handmade candy canes in the United States.

This year, Hammond’s labor costs have increased by 30%, but staffing remains an issue: the company’s 250-person team has lost nearly 100 people.

Hammond is not alone.

When Sam’s Club, a Walmart unit, placed an order for Doscher’s Candy Co. gourmet candy canes, co-owner Greg Clark was elated. Still, he said, Doscher had the staff and supplies to produce about 70% of the hand-made candy the Sam’s Club wanted.

“More and more Sam’s Club members are buying seasonal candy, including candy canes,” said a spokesperson for the company. “In an effort to meet anticipated demand, we have increased our purchases from other suppliers and advanced inventory and production where possible. “

Workers pack lollipops at Hammond’s Candies, America’s largest wholesale supplier of candy canes, in Denver, Colorado, U.S. December 16, 2021. Photo taken December 16, 2021.

Alyson McClaran | Reuters

Total seasonal confectionery sales were up 20% from a year ago, for the five-week period ending Dec. 5, according to market data from the National Confectioners Association and IRI. Sales of non-chocolate products for the winter holidays, including candy canes, increased by more than 34% from 2020.

Retailers increased the number of Christmas candy items per store by over 9%; and the total amount of non-chocolate products in stores is up nearly 23%, the data shows.

Many consumers scramble to stock up for the holidays after missing family reunions last year.

“This is the fourth grocery store I visit today, trying to find enough candy canes for our tree and our stockings,” growled Terri Andresson, 51, browsing Mariano’s grocery store in Chicago.

Kroger, owner of Mariano, declined to comment.

Spangler Candy Co., America’s largest sugarcane maker, has been working extra shifts this fall to keep up with demand, President Kirk Vashaw said. The Ohio-based company turned down business and faced supply chain issues.

“We would have expected the cherry flavor to arrive on Monday, but the trucks were delayed so we had to stop and switch to the raspberry,” Vashaw said.

Sugar shortages

In the face of tight global supplies, some sugar suppliers have limited sales to food manufacturers.

The United States imports about a quarter of its annual sugar requirement, according to data from the United States Department of Agriculture. Part of this year’s national crop was destroyed when Hurricane Ida ravaged Louisiana, the country’s second-largest sugarcane-producing state.

Meanwhile, freight prices are skyrocketing and Brazil and Thailand – two of the world’s largest sugar producers – have had weaker-than-expected harvests. Sugar prices are at a decade high.

“I have heard that some commercial buyers consider erythritol as an alternative sweetener,” said Bob Cymbala, a food trader at A&J Global USA, referring to a corn-based sugar substitute.

But prices are also rising for sweeteners made from corn. Clark of Doscher’s Candy said suppliers of corn syrup – used to make candy canes – cite a 10% increase in 2022.

As sugar supplies tightened, the US government adjusted sugar import quotas after some foreign sugar suppliers failed to deliver the product.

Rick Pasco, chairman of the Sweetener Users Association business group, said candy producers are affected by U.S. sugar policy, which restricts imports to protect local producers.

“We are only getting a fraction of what we need,” Pasco said.

Rachel J. Bradford