Hershey's Returns to Original Reese's Recipe Amid Ingredient Controversy
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 16 hours ago
0mins
Should l Buy HSY?
Source: seekingalpha
- Recipe Reversion: Hershey's decision to revert to the original Reese's recipe responds to accusations from the founder's family, emphasizing the importance of brand reputation and aiming to rebuild consumer trust while maintaining brand integrity.
- Ingredient Adjustments: Chief Growth and Marketing Officer Stacy Taffet announced improvements to the KitKat recipe alongside Reese's, ensuring all products align with classic milk and dark chocolate recipes to enhance overall product quality.
- Market Reaction: Brad Reese, grandson of the founder, expressed dissatisfaction with the ingredient changes, highlighting consumer concerns regarding brand transparency and ingredient quality, which reflect a growing demand for authenticity in food products.
- Cost Factors: Although cocoa prices had previously surged, they have significantly decreased recently, suggesting that the ingredient changes may not be primarily driven by cost pressures, but rather indicate Hershey's strategic balancing act between brand governance and consumer expectations.
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Analyst Views on HSY
Wall Street analysts forecast HSY stock price to fall
17 Analyst Rating
3 Buy
14 Hold
0 Sell
Hold
Current: 207.890
Low
181.00
Averages
196.27
High
222.00
Current: 207.890
Low
181.00
Averages
196.27
High
222.00
About HSY
The Hershey Company is a snacks company. The Company's segments include North America Confectionery, North America Salty Snacks and International. The North America Confectionery segment is responsible for its traditional chocolate and non-chocolate confectionery market position in the United States and Canada. This includes its business in chocolate and non-chocolate confectionery, gum and refreshment products, protein bars, spreads, snack bites and mixes, as well as pantry and food service lines. This segment also includes its retail operations. The North America Salty Snacks segment is responsible for its salty snacking products in the United States. This includes ready-to-eat popcorn, baked and trans fat free snacks, pretzels and other snacks. The Company's portfolio includes chocolate and confectionery brands such as Hershey's, Reese's, Kisses, Kit Kat, Jolly Rancher, Ice Breakers, LesserEvil, Shaq-a-licious alongside salty snacks, including SkinnyPop and Dot's Homestyle Pretzels.
About the author

Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
- Sales Growth Forecast: Hershey reaffirmed its 2023 net sales growth forecast of 4% to 5%, demonstrating confidence in market demand despite industry pressures from the Middle East conflict.
- Earnings Recovery Outlook: The company expects to achieve earnings recovery by 2027, with adjusted earnings per share projected between $8.20 and $8.52 for 2026, indicating optimism about future profitability.
- Market Reaction Surge: HSY's message volume on Stocktwits spiked 600% in the last 24 hours, reflecting strong investor interest and positive sentiment towards the company's outlook, even as shares edged higher in early trading.
- Analyst Rating Adjustment: Deutsche Bank maintained its hold rating on HSY but lowered its price target from $212 to $200, reflecting concerns over cost inflation and potential demand destruction, despite the company's solid fundamentals.
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- Strategic Priorities: At the 2026 Investor Day, Hershey emphasized its strategy to drive growth through an integrated approach across sweet, salty, and functional snacking, aiming for sustained differentiated performance with its core brands.
- Innovative Portfolio: The company plans to launch a robust five-year innovation pipeline focusing on premium and better-for-you options, which is expected to accelerate growth in salty and functional snacking categories, reinforcing its market leadership.
- Modern Supply Chain: By leveraging automation and AI-enabled decision-making, Hershey aims to enhance the resilience and intelligence of its supply chain, which is projected to deliver sustained productivity gains that will support reinvestment initiatives.
- Financial Outlook: Hershey reaffirmed its net sales growth target for fiscal year 2026 at 14% to 5%, with adjusted earnings per share growth expectations of 30% to 35%, reflecting strong financial health and commitment to shareholder returns.
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- Recipe Reversion: Hershey's decision to revert to the original Reese's recipe responds to accusations from the founder's family, emphasizing the importance of brand reputation and aiming to rebuild consumer trust while maintaining brand integrity.
- Ingredient Adjustments: Chief Growth and Marketing Officer Stacy Taffet announced improvements to the KitKat recipe alongside Reese's, ensuring all products align with classic milk and dark chocolate recipes to enhance overall product quality.
- Market Reaction: Brad Reese, grandson of the founder, expressed dissatisfaction with the ingredient changes, highlighting consumer concerns regarding brand transparency and ingredient quality, which reflect a growing demand for authenticity in food products.
- Cost Factors: Although cocoa prices had previously surged, they have significantly decreased recently, suggesting that the ingredient changes may not be primarily driven by cost pressures, but rather indicate Hershey's strategic balancing act between brand governance and consumer expectations.
See More
- Recipe Adjustment Plan: Hershey plans to replace the chocolate compound coating in its Reese's and Hershey's products by 2027 with more traditional formulations, aiming to restore consumer trust in the brand while addressing criticism from the founder's descendants regarding ingredient changes.
- Brand Trust Crisis: Brad Reese, the grandson of the founder, accused Hershey of replacing milk chocolate with compound coatings in multiple products, claiming this undermines the Reese's brand reputation and could lead to short-term sales declines, impacting the company's performance.
- Market Performance Volatility: Despite Hershey's stock rising 14% in 2023, the controversy over product formulations has sparked discussions on social media that may negatively affect sales in the near term, causing the stock price to trade sideways amid market volatility.
- Future Growth Expectations: Hershey reiterated its fiscal year 2026 guidance, projecting a 15% to 20% earnings per share growth for fiscal year 2027, demonstrating confidence in its profitability outlook despite the challenges posed by the formulation controversy.
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- Dietary Shift: Tom Brady has softened his strict dietary stance post-retirement, emphasizing moderation over rigidity, which reflects a more relatable approach to family life, especially during kids' birthday parties and Halloween.
- Brand Partnership Expansion: Brady's collaboration with Ferrero, a global sweets giant, includes a campaign tied to the 2026 World Cup, showcasing his innovative thinking in endorsements aimed at enhancing brand influence through fan engagement.
- Commitment to Health and Fitness: Despite relaxing his diet, Brady maintains a frequent workout routine and ensures proper hydration, demonstrating his ongoing commitment to a healthy lifestyle even after his professional career.
- Family Life and Brand Integration: Brady makes Nutella pancakes for his kids, highlighting his focus on family life while integrating Ferrero products into daily routines, which further enhances the brand's relatability.
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- Clear Strategic Goals: CEO Kirk Tanner emphasized at the Investor Day that Hershey will focus on 'better-for-you' snack options, projecting a 4% to 5% increase in net sales by 2026, which will drive a 30% to 35% rise in adjusted earnings, reflecting the company's confidence in future growth.
- Integrated Business Model: Hershey is merging its sweet and salty businesses into a 'One Hershey' entity aimed at driving portfolio growth through expanded distribution and optimized retail execution, which will enhance market competitiveness and operational efficiency.
- Technology-Driven Supply Chain: The company plans to enhance its supply chain through automation and AI-enabled decision-making, which is expected to improve overall operational efficiency and achieve higher sales growth and profitability in the coming years.
- Identifying Market Opportunities: Hershey has identified opportunities to increase exposure to Gen Z through social media and influencer marketing, as well as developing more $1 billion brands, which will provide new growth momentum for the company, despite current shares declining over 2%.
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