Major candy company files for bankruptcy just before Halloween
A hugely popular candy company has filed for bankruptcy just days before Halloween — the biggest candy-buying week of the year.
Candy Warehouse, an online store that sells more than 6,000 types of sweets in bulk to families as well as other businesses, filed for bankruptcy protection on October 24.
The timing is especially striking, coming right before a holiday that’s all about candy.
The Texas-based business, founded in 1998, listed up to $500,000 in assets and as much as $10 million in debts.
Chapter 11 bankruptcy is a type of bankruptcy in the United States that allows a business to reorganize its finances under court supervision while continuing to operate.
Candy Warehouse describes itself as a woman-owned, minority family business based in Sugar Land, Texas.
It supplies bulk candy to hotels, restaurants, hospitals, amusement parks and event planners.
The company’s collapse adds to growing pressure on candy makers across the country, many of which are struggling with rising costs and weaker sales.
Candy Warehouse filed for Chapter 11 bankruptcy on October 24
The candy company's bankruptcy filing came just one week before millions are set to hit the streets to trick or treat on Halloween
The huge online candy retailer has long provided bulk sweets to be ordered and shipped quickly
Industry analysts say that US consumers are shifting toward health-focused treats — such as sugar-free candy or sweets with vitamins.
Zolli Candy CEO Alina Morse said adults now prefer 'functional hard candies, with zero sugar, mint, and fruit flavors'.
'Consumers are looking for across the board, post-pandemic, ways to get in vitamins or other supplementary dietary needs,' Morse told the US Sun.
A 2023 study found that 47 percent of consumers are seeking out 'healthy' candy in order to lower their sugar intake.
'Consumers have taken a step back. Larger sizes are fading away, and price sensitivity is playing out. You're seeing manufacturers starting to trim pack sizes,' Chris Borges, non-chocolate category director for Perfetti Van Melle, owner of the Chupa brand, told Snack and Bakery.
Tariffs have not made things easier, with chocolate becoming drastically more expensive.
Top chocolate maker Hershey, which mainly makes chocolate in the US but has plants in Canada and Mexico, has estimated it would face $100 million in tariff costs in its third and fourth quarters if the levies remain in place.
'Whether it's cane sugar, whether it's cocoa, all of that has to get imported, and all of that's being affected by the tariffs,' Phil Lempert, a food industry analyst, told CBS News.
The bankruptcy filing comes amidst broader economic struggles for candy companies
Chocolate has become drastically more expensive because of tariffs and poor harvests in Ghana and the Ivory Coast, the main producers of cocoa
Kirk Tanner, president and CEO of Hershey
Separately from tariffs, chocolate prices have risen sharply as cocoa costs worldwide rose by 178 percent in 2024.
Cocoa tripled in value to hit record highs in the first four months of last year — a result of poor harvests in Ghana and the Ivory Coast, which together produce 60 percent of the world's supply.
The impact on chocolate companies and consumers in the US has been profound.
Under pressure from rising input costs, Hershey rolled out double-digit price hikes across its confectionary products like Reese's cups to retailers like Walmart and Kroger.
Because cocoa can't be sourced domestically, Hershey said in May it is 'engaging with the US government to seek an exemption' for cocoa.
M&Ms maker Mars said in July that it is investing $2 billion in its US manufacturing, including chocolate, but has not changed its sourcing structure and continues to make 94 percent of its US products locally.
This Halloween, many are opting for non-chocolate candy to hand out to trick-or-treaters to save money.
