If there’s one thing we’ve learned this year, it’s that life continues, regardless of whether there’s a pandemic.

For better or worse, that’s the reality.

But Halloween it still offers some investment potential that shouldn’t be overlooked.

Fright Night Decline?

I love Halloween.

I enjoy horror stories, ghouls, ghosts, demons and slasher flicks.

But like everything in 2020, this Halloween is going to be different from those of years past.

Typically, 32% of Americans go trick-or-treating. This year, only about 14% will. Some cities are even recommending that trick-or-treating be skipped altogether.

And it’s no surprise that the percentage of people planning to attend Halloween parties is expected to decline from 41% in a normal year to just 19% this year.

But don’t fear. Not all is lost.

Amazingly, 46% of consumers still plan to wear a costume, which is only a 1% decline from 2019. That may be because people are more than comfortable now celebrating events virtually.

But humans aren’t the only ones dressing up for the holiday. Hundreds of millions of dollars will be spent on pet costumes. The most popular pet costume this year will be a pumpkin, with 10% of pet owners dressing their furry family members up as one.

In total, Americans will spend approximately $8.05 billion on Halloween. Now, that’s an 8% drop from the $8.78 billion spent in 2019, but that’s purely from a drop in participation. So, all things considered, that’s far from apocalyptic.

Those who are planning to celebrate Halloween expect to spend more than last year, which is even more encouraging.

In fact, average spending is projected to jump more than 6.5%.

But here’s the deal… Spending is kicking off earlier than normal, beginning this month. Everything is being ordered online, so it appears consumers are allowing for a lot more lead time.

Of course, besides the scary movies, spooky decorations and chances to dress up as your favorite character, Halloween is really centered on one thing and one thing only: candy.

Lots and lots and lots of candy.

Treat for Me

Americans enjoy candy year-round.

But Halloween is the most epic day for candy consumption in this country. In fact, more than 10% of annual candy sales take place in the days leading up to the spooky holiday.

Of course, we all have our favorite type… But let’s be honest, chocolate, by far, is the candy Americans consume the most of.

The data shows 72% of all the money spent on Halloween candy will be spent on chocolate.

So this time of year is extremely important to candy manufacturers such as The Hershey Company (NYSE: HSY), Mondelēz International (Nasdaq: MDLZ), Nestlé SA (OTC: NSRGY) and Tootsie Roll Industries (NYSE: TR).

Year to date, these are largely underperforming the S&P 500. But there is an opportunity for some of these companies to pick up some momentum.

And it’s worth noting that Hershey owns three of the top five bestselling treats sold on Halloween.

This year, we know the number of trick-or-treaters will decline to a trickle. But it’s important to remember that half of all candy purchased for Halloween is for personal consumption.

Everybody participates in “A treat for me, a treat for you.” And you’re not alone if you’ve run out of Halloween candy before the big night and had to race out to buy more.

This could be a trend that goes into overdrive this year with so many people trapped indoors.

Without a doubt, Halloween spending will decline this year.

But it will decline nowhere near as much as many feared. And people are going to buy bags of candy for themselves.

The great thing for candymakers is, Halloween is only the beginning of a candy buying spree that stretches from now until Easter. That’s a sweet opportunity no investor should want to pass up.

Here’s to high returns,

Matthew