Rising cocoa costs and evolving consumer tastes drive innovation at the iconic candy maker.
In response to shifting consumer preferences and soaring cocoa prices, The Hershey Company is expanding its product portfolio by incorporating more “on-trend” ingredients such as peanut butter, wafers, and caramel. While chocolate remains a core part of its legacy, the 131-year-old confectionery giant is strategically reducing its dependence on the commodity.
Speaking on the company’s evolving innovation strategy, Tiffany Menyhart, Hershey’s Chief Customer Officer, emphasized that chocolate will always be foundational to the brand. “We’re protecting our core chocolate business. We will always continue to make quality products with cocoa. That’s what our consumers love,” Menyhart said. “But we have found there are different flavors that are on trend that we have the right to own.”
In recent years, Hershey has unveiled a series of new offerings that reflect this shift. These include limited-edition Kit Kat flavors such as vanilla and pink lemonade, which swap the traditional chocolate coating for trending flavor profiles. Other innovations include a Hershey’s milk chocolate bar with crunchy waffle cone bits and another loaded with caramel, aimed at s’mores lovers.
Peanut butter, a signature component of Hershey’s $3.2 billion Reese’s franchise, is playing a growing role in this transition. The company has rolled out peanut butter-filled pretzels, animal crackers coated in peanut butter and chocolate, and even popcorn drizzled with both ingredients, effectively blending snack and confectionery formats.
The trend isn’t unique to Hershey. Rivals like Ferrero have also jumped on the bandwagon, with the 2023 U.S. debut of Nutella B-Ready — a crispy wafer shell filled with Nutella — and the upcoming launch of Nutella Peanut in 2026, combining cocoa hazelnut spread with roasted peanuts.
Hershey’s broader approach is rooted in consumer insights and research & development. “We’re working with our Consumer Insights and R&D teams to understand the key consumer needs and then how we best address those needs,” Menyhart explained.
As inflation and raw material costs continue to pressure the confectionery industry, brands like Hershey are finding innovative ways to delight consumers while ensuring resilience in their ingredient sourcing and product development strategies.