This morning, an opinion piece I authored for Real Clear Markets was published. The text of the op-ed is below, or you can read the piece on the publication’s website.
How U.S. Sugar Subsidies Are Destroying U.S. Manufacturing Jobs
by John Downs
The story of American manufacturing is often a narrative of large products like cars or raw materials like steel. But one of the oldest and longest-running sources of manufacturing jobs in the United States is candy.
June is National Candy Month, and as we celebrate the fun treats that confectioners have been producing for more than 100 years, we also should recognize a challenge imposed on this industry by the federal government’s outdated and burdensome sugar subsidy program.
The current sugar subsidy program is a Depression-era regulation that has no place in today’s global economy. Because of this program, candy companies in the United States pay about double the global average price for sugar. While global prices began trending downwards in 2013, U.S. sugar has surged upwards due to continued reauthorization of the sugar subsidy program and regulations on Mexican sugar imports. This trend has a negative impact on candy makers, especially the small and mid-sized, family-owned companies that don’t have flexibility in their supply chains. And it is doing irreparable damage to a storied industry consisting of multi-generational, innovative owners.
Today, the confectionery industry has a direct economic impact of $35 billion and provides 55,000 jobs in more than 1,000 manufacturing facilities across the country. At a time when many bemoan the loss of American manufacturing jobs, the candy industry remains heavily invested in the United States. Many confectionery companies remain family-owned and rooted in the communities where they began generations ago.
Sugar subsidies have a real impact on candy jobs. Once a booming American product in the candy industry, only one company in the U.S. continues to produce candy canes domestically. Spangler Candy Company has been headquartered in the small town of Bryan, Ohio for 110 years providing good-paying jobs and economic benefits for its community. Other communities have not been as fortunate, as they have seen other industries move their operations overseas due to the high cost of doing business here in the United States.
Long-standing, family-run companies that are heavily engaged in their communities are part of the fabric of the candy industry. In Baltimore, Maryland, Goetze’s Candy is on its fifth generation of family leadership in its 121 year history. Mars, Inc. has been family-owned for more than 100 years, The W.M. Wrigley, Jr. Company is celebrating its 125th year anniversary, and The Hershey Company has thrived in central Pennsylvania for more than 120 years. These storied histories make candy unique, but they do not protect them from bad policies that undermine their economic stability.
Despite the challenges, candy companies are constantly evolving to meet the latest trends and consumer expectations. From inventive packaging to the development of new flavors, innovation and creativity are drivers of this industry.
Consumers increasingly expect more transparency when it comes to calorie counts and ingredients in what they eat and drink. That’s why we are providing them with the information, support and options they need to make the choices that are right for them, including front-of-pack labeling and packages ranging from fun size to share size that can bring a little enjoyment to any occasion.
There’s also no confusion among consumers when it comes to understanding the unique role of confections in their lives, and they are choosing to enjoy candy in moderation. Most people in the U.S. enjoy candy about twice a week, averaging about 40 calories per day from confectionery items. Chocolate, candy, gum and mints account for less than 2 percent of the average American’s overall caloric intake, and an average of about one teaspoon of added sugar per day.
National Candy Month is a time to revel in this quintessential American manufacturing success story. It is also a time to take stock of the challenges the industry faces now and in the future. Candy companies have proven to be resilient, but it is time to take a stand on sugar subsidies that benefit so few and hurt so many American manufacturers. In the meantime, for those who enjoy the occasional treat, those who appreciate the strong economic impact of a responsible and fun industry, and for many others, this is a month made for celebration.