Halloween Economics

It’s that time of year again when we encourage kids to go beg for candy at random people’s houses. Yes, because taking candy from strangers when it’s dark outside is exactly the kind of thing we should be teaching children to do. 😛 Sometimes kids are forced to wear embarrassing costumes because parents think they look cute. Even animals are subject to such abuse. The National Retail Federation estimates that people will spend $350 million on Halloween costumes — for their pets. 😆 Some people make their own outfits, but it’s often more convenient to buy them from stores where the costumes are mask produced. 😀


The Economics of Halloween

Halloween is big business. In the U.S. alone people anticipate spending an average of $80 this year on decorations, costumes, and candy, according to the National Retail Federation. That’s about 10% more than last year. Altogether Americans are expected to spend about $7.4 billion on Halloween in 2014. Which will be good for the economy. Below is a breakdown of the $7.4 billion U.S. Halloween spending by category.

  • Costumes – 38%
  • Candy – 30%
  • Decorations and Cards – 32%

October 31st is actually the chocolate industry’s most lucrative holiday for sales. More chocolate is purchased for Halloween than for Easter, Christmas, and even Valentines Day.

Chocolate will probably become more expensive in the future. It’s due to limited supply and a growing world wide demand. On the supply side the cocoa plant can only grow in very specific parts of the world, mainly near the equator in West Africa. Two countries in that area, Ivory Coast and Ghana, produce most of the global cocoa supply. It sounds like West Africa is a pretty sweet place to work in. 😀 But basically the production of cocoa cannot be easily scaled. And on the demand side consumers in developing economies of Asia and Latin American are quickly developing a sweet tooth for chocolate, with sales expected to increase by more than 20% over the next few years.

As global demand continues to increase the world’s largest chocolate manufacturers like Mars, Mondelez, Barry Callebaut, and Nestle have to raise prices in order to maintain their profit margins. Hershey has already announced they’ve increased their wholesale price this year by 8%. The global chocolate market is expected to grow from $83.2 billion in 2010 to $98.3 billion by 2016 at an estimated annual growth rate of 2.7% from 2011 to 2016.

Have a fun night everyone. 🙂 Stay safe. And for anyone who cares, just a friendly reminder to turn your clocks back on Sunday morning this weekend. 😉

Random Useless Fact:
Many animal shelters won’t allow black cats to be adopted around Halloween, out of fear that they might be sacrificed or tortured during rituals.


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11/01/2014 8:45 am

I bought 100 pieces of Mars box and Cheetos to give out. Quiet night didn’t get as much kids this year though.

I was actually looking at Mondelez to buy as a stock. They make Oreos and a bunch of well known brands I like. I actually made an option trade on Hersey on Halloween day lol.

Two Degrees
Two Degrees
11/01/2014 1:01 pm

About five years ago, I learned about how awful the chocolate industry is. A lot of child labour still exists for the production of chocolate. Since then, I stick to buying from brands like Camino. I’ve become a chocolate snob now; even if I do taste cheap chocolate, I don’t like it.

While on the topic of chocolate, have you seen this yet? It’s in French, but the video is subtitled. Some of the people who work on the cocoa farms have never even tasted a bar of chocolate before!


No More Waffles
11/02/2014 5:03 am

Holy hell, $7.4 billion on Halloween, that’s insane! 😀

With chocolate being in low supply and ever higher demand it might be a good investmen opportunity. Something to research this afternoon! Thanks for the inspiration, Liquid.

11/02/2014 6:43 am

Due to the inclement weather, we barely had any kids this Hallowe’en. I felt bad for their kids trick or treating in the rain, so I ended up giving them handfuls of candy. We still have a ton of candy leftover. I was thinking of buying some this weekend because they’d be on sale, but I bought way too much, so we need to go through that first. Lol.

For some reason, I thought Mexico and South America produced most of the cocoa.