Traced / Food / Reese's — The Hershey Company
Low Transparency Live Story — Feb 19, 2026 Food / Confectionery

Reese's The Hershey Company

H.B. Reese built the world's best-selling candy on two ingredients: milk chocolate and peanut butter. Hershey acquired it in 1963 and spent 60 years growing it into a $2.6B brand. Now, under pressure from the worst cocoa price surge in a century, the company is quietly substituting compound coatings for milk chocolate and peanut-butter crème for peanut butter across multiple product lines — while labeling stays ambiguous, and the flagship Peanut Butter Cup is defended as unchanged. The inventor's grandson went public this week. The label tells a different story than the brand.

Transparency Score
Ownership Disclosure Yellow
Ingredient Disclosure Red
Label Claim Verification Red
Additive Profile Red
Reformulation Transparency Red
Marketing-Formula Alignment Red
Historical Integrity Yellow
Overall Zone Red — 5R · 2Y · 0G
Parent Company
The Hershey Company (NYSE: HSY)
Revenue (2025)
$11.7B total; Reese's ~$2.6B
Acquired From
H.B. Reese family — 1963
Ownership Control
Hershey Trust Co. — majority voting

Story breaking now (Feb 19, 2026): Brad Reese, 70-year-old grandson of H.B. Reese, published an open letter on LinkedIn (Feb 14) accusing Hershey of replacing milk chocolate with compound coatings and peanut butter with peanut-butter-style crème across multiple Reese's products. AP, CBS News, NBC News, Fox Business covering. Hershey's response: the flagship Reese's Peanut Butter Cups "are made the same way they always have been." The Mini Hearts product that triggered Brad Reese's complaint was labeled "chocolate candy and peanut butter crème" — not milk chocolate and peanut butter.

Key Findings
01
The "milk chocolate" question is real — and Hershey's own CFO acknowledged formula changes in public investor communications
In Hershey's Q4 2024 investor call, CFO Steven Voskuil acknowledged in Hershey's Q4 2024 earnings call that formula adjustments had been made across some products, citing cocoa price pressures. He stated there was "no consumer impact." The earnings call transcript is publicly available via Hershey's investor relations disclosures. He did not name which products. Hershey says the classic Reese's Peanut Butter Cup remains unchanged. The evidence on the specific line extensions (Mini Hearts, Take5, Fast Break, Reese's Thins) tells a different story: those products use "chocolate candy" or "compound coating" language, not "milk chocolate."
Note: Formula adjustments acknowledged in Q4 2024 earnings call; specific product scope not publicly disclosed
02
PGPR replaced cocoa butter as early as 2006 — this pattern predates the cocoa crisis by 18 years
ABC News reported in 2006 that Hershey reformulated multiple products to replace cocoa butter with vegetable oil emulsifiers. PGPR (Polyglycerol Polyricinoleate) — made from castor oil fatty acids — is cheaper than cocoa butter and functions as a viscosity reducer, allowing less actual chocolate per product. PGPR and TBHQ both appear in the current Reese's Peanut Butter Cups label. Neither was in the original formula when H.B. Reese was alive. TBHQ is banned at Whole Foods Market as an "unacceptable" food ingredient.
Red: Cost-saving reformulation pattern over 20+ years, not just recent cocoa crisis response
03
FDA labeling rules create a loophole: "chocolate candy" and "milk chocolate" can coexist in the same product family
FDA requires a product labeled "milk chocolate" to contain at least 10% chocolate liquor, 12% milk solids, and 3.39% milk fat. Products using compound coatings (vegetable fats replacing cocoa butter) cannot carry the "milk chocolate" designation and must use language like "chocolate candy," "chocolate-flavored," or "compound coating." Hershey uses both designations across different Reese's SKUs, which legally complies with FDA rules but creates a transparency gap: consumers buying Reese's Mini Hearts in the same store as Reese's Peanut Butter Cups may not realize they are getting materially different products.
Red: Legal label variation used to avoid full disclosure of ingredient downgrade across product line
04
Hershey's cocoa cost pressure is real and structural — not a temporary reformulation
Cocoa futures peaked at over $12,931/metric ton in December 2024 — the highest in recorded history — driven by weather and crop disease in West Africa. Hershey's gross margin collapsed from 47.3% to 33.5% in fiscal 2025. The company explicitly told investors it would use "reformulation" as one of several responses to persistent input cost inflation. Even as cocoa prices have partially retreated in early 2026, the broader industry — including Nestlé and Pladis — has continued reformulations already underway, treating the 2024 spike as a signal to structurally reduce cocoa dependency, not a one-time weather event.
Red: Reformulation is investor-communicated strategy, not temporary bridge measure
05
The Hershey Trust controls the company — and has blocked acquisition attempts that would have forced cleaner governance
The Hershey Trust Company, which funds the Milton Hershey School, owns a minority economic stake but controls a majority of Hershey's voting power through a dual-class share structure. In 2016, when Mondelez International attempted to acquire Hershey for approximately $23B, the Trust blocked the deal. The consequence: Hershey operates with unusual governance — majority shareholder (the Trust) answers to a philanthropic mission, creating incentives that don't straightforwardly align with either shareholder returns or consumer transparency.
Watch: Unique governance structure; not straightforwardly PE-driven but not consumer-accountable either
06
The original Reese's formula had 9 ingredients. The current formula has 14 — every addition serves cost or shelf-life, not flavor
H.B. Reese's original Peanut Butter Cup used cane sugar, no synthetic preservatives, and no emulsifiers beyond what was standard in milk chocolate production of the era. Today's label adds PGPR (reduces cocoa butter use), TBHQ (prevents rancidity in peanut oil), Citric Acid (secondary preservative via manufactured fermentation), and Dextrose (a corn-derived sugar added to the peanut butter filling). None of these additions improve the nutritional profile or flavor. All reduce cost or extend shelf life.
Red: 5 of 14 current ingredients are cost- or shelf-life-motivated additions absent from original formula
Ingredient Evolution — Original vs. Current vs. Line Extensions
Ingredient Original Recipe (pre-1963) Classic Cups (Current) Mini Hearts / Line Extensions Function / Traced Note
Milk Chocolate Shell ✓ Milk chocolate (FDA standard) ✓ Milk chocolate (maintains FDA standard) "Chocolate candy" or "compound coating" — vegetable fats replace cocoa butter Key Distinction The same brand name. Materially different product. FDA allows this.
Peanut Butter Filling ✓ Peanut butter (peanuts + minimal additives) ✓ Peanuts (Hershey claims real peanut butter) "Peanut butter-style crème" in some SKUs per Brad Reese complaint Contested Hershey disputes. Brad Reese says Mini Hearts were inedible. Packaging language varies by SKU.
PGPR Not present Present — in milk chocolate layer Present Added circa 2006 Reduces cocoa butter needed. Banned at Whole Foods (PGPR is on their "unacceptable" list per some formulations). FDA-approved.
TBHQ Not present Present — in peanut butter filling Present in some SKUs Added post-acquisition Synthetic preservative. Banned at Whole Foods — listed as "unacceptable in food." FDA allows up to 0.02% of oil/fat content.
Dextrose Not present Present — in peanut butter filling Present Corn-derived sugar Added to peanut butter filling for sweetness and texture. Cheaper than cane sugar. Not in H.B. Reese's original recipe.
Cane Sugar ✓ Primary sweetener ✓ Still present (as "Sugar") ✓ Still present Original used cane sugar. Current label lists "Sugar" — source not specified. Likely cane or beet sugar blend depending on region and commodity pricing.
Citric Acid Not present Present Present Manufactured preservative Industrial citric acid is produced via Aspergillus niger fermentation (black mold), not from citrus fruit. FDA-recognized as a preservative. Not the same as natural citric acid.
Ownership Chain & Reformulation Timeline
Ownership Structure
Hershey Trust Co.
Milton Hershey School endowment — majority voting
The Hershey Co.
NYSE: HSY — $36B market cap
Reese's Brand
Acquired 1963 — ~$2.6B annual sales
Governance note: The Hershey Trust holds a minority economic stake but controls majority voting power through a dual-class share structure. The Trust is run by a board accountable to its philanthropic mission (Milton Hershey School), not directly to public shareholders or consumers. When Mondelez offered ~$23B to acquire Hershey in 2016, the Trust blocked it. This structure insulates management from hostile acquisition but also from conventional market accountability.
1923 — 1963
H.B. Reese era — founding formula
H.B. Reese invented the Peanut Butter Cup in 1928 in his Hershey, PA basement. Formula: milk chocolate shell, peanut butter filling, minimal additives. Nine total ingredients. Reese died 1956; his six sons sold the company to Hershey in 1963 in a stock-for-stock merger.
1963 — 2005
Post-acquisition growth, formula largely preserved
Reese's became Hershey's top-selling brand by 1969 — just six years after the acquisition. Brand scaled to billions in revenue. Formula remained closer to original; cocoa butter still the primary fat in chocolate shell.
2006
First major reformulation: PGPR replaces cocoa butter
ABC News reports Hershey reformulated multiple products to replace cocoa butter with vegetable oil emulsifiers, including PGPR. Company cites cost management. Blind taste tests reportedly show half of consumers prefer the new version — Hershey's own-sponsored tests.
2023 — 2024
Cocoa prices surge to historical record
Cocoa futures rise from ~$2,500/MT in early 2023 to over $12,931/MT by December 2024 — the highest price ever recorded. West African crop failures, disease outbreaks, and commodity speculation drive the surge. Hershey's gross margin under severe pressure.
2024 — 2025
Hershey CFO addresses formula changes in investor call
In Hershey's Q4 2024 earnings call, CFO Steven Voskuil acknowledged formula changes had been made across some products, stating there was "no consumer impact" and that Hershey was "very careful to maintain the taste profile and the specialness of our iconic brands." He did not specify which products. Hershey also announced double-digit price increases citing cocoa costs. Gross margin fell from 47.3% to 33.5%.
February 14, 2026
Brad Reese publishes open letter — story breaks nationally
H.B. Reese's grandson, Brad Reese (70), posts open letter on LinkedIn accusing Hershey of replacing milk chocolate with compound coatings and peanut butter with crème across "multiple REESE'S products." Says he bought Reese's Mini Hearts (Valentine's Day product) and threw them in the garbage. AP, CBS, NBC, Fox Business, Daily Meal, ABC all cover within 5 days.
February 19, 2026
Hershey responds — defended classic cups, silent on line extensions
Hershey says iconic Reese's Peanut Butter Cups "are made the same way they always have been." Acknowledges "product recipe adjustments" for "new shapes, sizes and innovations." Does not address Take5, Fast Break, Mini Hearts, or other extensions by name. EU label on Ocado showing "milk chocolate-flavored coating" disputed by Hershey as a labeling standard difference, not a formula difference.

"My grandfather, H. B. REESE, built REESE'S on a simple, enduring architecture: Milk Chocolate + Peanut Butter. Not a flavor idea. Not a marketing construct. A real, tangible product identity that consumers have trusted for a century."

Brad Reese, LinkedIn open letter, Feb 14, 2026

"I would say in all the changes that we've made thus far, there has been no consumer impact whatsoever."

Steven Voskuil, Hershey CFO, investor call 2024

"I went and bought a bag, and I took a couple bites, and I had to throw the bag in the garbage. I can't go on representing being the grandson of Reese's when the product is total bunk."

Brad Reese, Fox Business, February 2026
Editorial Verdict
Traced Assessment

The Reese's story is a transparency case study about the difference between what is legal and what is honest. Hershey's defense that the classic Peanut Butter Cup is unchanged is plausible — and probably true for that specific SKU. But the defense sidesteps the actual complaint: across the broader Reese's product family, "milk chocolate" has been replaced by "chocolate candy" and "compound coating" in ways that ordinary consumers, buying products under the same trusted brand name, would not understand.

This is not a regulatory violation. FDA labeling standards permit exactly this kind of variation across a product family. That's the problem. Legality and consumer transparency are not the same thing, and Hershey is operating in the space between them.

The PGPR and TBHQ story is older and less covered, but arguably more significant. Both were absent from the original formula. Both were added for cost management, not quality. TBHQ is banned at Whole Foods. PGPR allows Hershey to use less actual cocoa butter per product. These changes preceded the current cocoa crisis by nearly 20 years — which means the pattern of ingredient downgrade is not a crisis response. It's a business model.

The cocoa price crisis accelerated something that was already underway. The current news cycle around Brad Reese is the first time that pattern has become legible to the general public.

What the Label Tells You
  • Classic Cups contain PGPR — not present in original formula; reduces cocoa butter requirement
  • Classic Cups contain TBHQ — synthetic preservative; banned at Whole Foods
  • Line extensions (Mini Hearts, Take5, Fast Break) use "chocolate candy" or compound coatings — not milk chocolate
  • Reformulations confirmed by CFO in investor call; scope undisclosed to consumers
  • ~Classic Peanut Butter Cups still appear to use milk chocolate shell per current label and Hershey's statement
  • No public disclosure when specific products were reformulated or why
  • EU/UK labels for same brand show "milk chocolate-flavored coating" — Hershey attributes to higher regional standards, not formula difference
  • Deep Dives
What to Do
  • Read the label before buying any Reese's product: if it says "chocolate candy" or "compound coating" instead of "milk chocolate," it is materially different from the original.
  • The classic Peanut Butter Cup (standard 2-pack) still appears to use milk chocolate — but contains PGPR and TBHQ that were not in H.B. Reese's formula.
  • Reese's Organic version is closer to the original: no PGPR, no TBHQ, shorter ingredient list.
  • If ingredient integrity matters to you, the Organic SKU is the closest currently available option within the Hershey family. It costs more and is less widely distributed.
  • If you want a peanut butter cup with no synthetic additives and no compound coating, you're currently looking at smaller-brand alternatives — not Hershey.
The Larger Pattern

What happened to Reese's is not unique to Hershey. It is the standard operating model of legacy food brands under publicly-traded conglomerate ownership: costs are managed through ingredient substitution, pricing is managed through portion reduction, and brand equity is used to extend into product lines that carry the trusted name but not the original formula. The consumer who buys "Reese's" at Walgreens in February 2026 has no obvious mechanism for knowing whether they are buying something meaningfully different from what their parents bought.

FDA labeling rules require accurate disclosure of what's in a product — but they do not require disclosure of what changed, or when, or why. There is no obligation to tell a consumer that PGPR replaced cocoa butter in 2006 because it cost less. There is no obligation to flag that this specific SKU uses a compound coating while that one uses milk chocolate. Brand continuity is legally maintained across materially different products by keeping the packaging similar and the brand name constant.

Brad Reese's complaint is emotionally charged — it's personal, and he's the grandson of the inventor — but the underlying claim is verifiable from public labels, investor call transcripts, and historical packaging comparisons. The label changed. The formula changed. The marketing did not. That's the structure of the problem, and it's not exclusive to the current news cycle.

The cocoa price crisis created a visible stress point in a system that had been operating quietly for decades. The lesson for consumers isn't that Reese's is uniquely bad — it's that "same brand, different product" is a standard practice that labels technically disclose and consumers routinely miss.