Is Halloween a “Trick or Treat” for your business?
As I walked around the local mall this weekend, I was shocked at all the different Halloween stores that have “popped up” over the past few weeks,. They will also disappear (or turn into Christmas Stores) just as quickly on November 1st. The irony is not lost as “All Hallows’ Eve” has its traditions as an ancient pagan festival celebrated by Celtic people over 2,000 years ago. I bet they didn’t think it would turn into a retailers dream that, in 2013, generated an estimated $7 billion in consumer spend. This means huge logistical challenges to bring candies, costumes, pumpkins and other assorted “tricks and treats”.
On October 31st this year it is estimated that some 41 million ghosts, ghouls, superheroes, witches, princesses, and presidents will be going from door to door in the US looking for enough candy to make it through until Christmas (or at least Thanksgiving). In fact consumers are projected to spend $75.03 per person, with an average of $27.85 on costumes and $22.37 on candy according to the National Retail Federation.
According to the National Confectioners Association candy sales are expected to reach $2.5 billion in sales across the US. The study shows that chocolate is the favorite Halloween candy, followed closely by candy corn (more than 35 million pounds are produced each year).
It is now estimated that more than twice as much chocolate is sold for Halloween as for Valentine’s Day, with 90 million pounds of chocolate sold during the week running up to Halloween. This is great news for SAP customers who manufacture 70% of the world’s chocolates (check out the SAP Fast Facts Video). Companies such as the Ferrero Group who are using SAP software to meet its aggressive business goals .
The global nature of the chocolate process can be a nightmare
Today’s chocolate supply chain is a very global affair. It all starts with the cocoa which is predominantly grown in equatorial countries with Ghana and Ivory Coast responsible for 50% of the global supply. Imagine if there was a poor crop, a natural disaster or a health scare like Ebola leading up to the big holiday season. That would be a true Halloween Horror Story for the manufacturers, and it highlights the need for the global supply chains to be more robust, with backup for critical suppliers. To establish resiliency such as a coco bean shortage, companies need to combine risk-management strategies with a balanced supply network, a multi-tier understanding of their inventory positioning, and visibility and responsiveness to re-plan supply interruptions.
Another rising challenge to this global supply is the spotlight around sustainability of the supply in West Africa and the prevalence of child labor, trafficking and forced labor. We are now seeing a number of chocolate companies around the world sourcing Fair Trade Certified™ cocoa. Also, many are increasingly sourcing cocoa beans that have been certified by independent organizations to meet various labor, social, and environmental standards.
As you go out “Trick or treating” in places such as Bloody Springs, Mississippi, Dead Man’s Crossing, Indiana, Death Valley, California, Devil Town, Ohio , Hell, Michigan , or even Satan’s Kingdom, Massachusetts, just think of the global supply chains that bring the treats to your eager little witch or warlock.