By 2027, The Hershey’s Company will transition product coloring ingredients to colors from natural sources across the team’s sweets portfolio, according to a company spokesperson after being asked about cocoa prices and their correlation to product size and cocoa ratio.
Hershey’s team is “enhancing Kit Kat’s® recipe for a creamier taste and texture and bringing a small portion of remaining Hershey’s and Reese’s products in line with their classic milk and dark chocolate recipes. The core recipes for our Hershey’s chocolate bars and Reese’s peanut butter cups have not changed,” said a Hershey’s spokesperson in an email to Expana’s editorial team.
Hershey’s team referred to the base recipe for their namesake chocolate: Milk chocolate containing sugar, milk, chocolate, cocoa butter, milk fat, lecithin (soy), PGPR, natural flavor.
Since contract prices for cocoa had skyrocketed in late 2024 and early 2025, market participants have noted the phenomenon of lower demand for cocoa and derivatives like cocoa butter, according to Expana’s Senior Manager of Cocoa Analysis, Andrew Moriarty during a recent webinar.
A notable proportion of the cocoa demand lost over the past two years has been due to product reformulations away from expensive cocoa butter, toward different fats such as coconut or palm oil instead, say industry sources to Expana’s team.
“It’ll be some time before we see [manufacturers shift] back toward cocoa fats,” said Moriarty, who noted the demand erosion experienced in the chocolate market.
“Based on conversations with industry sources, the cocoa fat demand lost due to reformulations over the past two years seems unlikely to return in the near future in any meaningful volumes. However, outside of traditional consuming regions like Europe, we are seeing the first ‘green shoots’ of improved cocoa demand following the downturn of the past two years.”
It’s not clear exactly how Hershey’s team plans to reformulate products, and with which ingredients. However, the company’s experience may be different from market participants in Europe.
“The magnitude at which cocoa price increases went through to retail was faster in Europe,” said Moriarty.
However, Hershey’s team maintains that the chocolate category is “resilient and continues to grow,” adding that “premium chocolate is a growing consumer trend. We will continue to innovate and create offerings that meet a demand for accessible premium chocolate,” said Hershey’s spokesperson.
Previously in the US, the grandson of Reese’s brand founder criticized Hershey for reformulating some Reese’s products, reported Reuters.
The base recipe for Reese’s Peanut Butter Cups is milk chocolate containing sugar, milk, chocolate, cocoa butter, milk fat, lecithin (soy), PGPR, natural flavor, peanuts, sugar, dextrose, salt, TBHQ, and citric acid, according to Hershey’s website.
In a separate piece, it was noted that Hershey’s hiked prices to offset cocoa costs.
“In July 2025, we did communicate a price increase, along with most of the industry in that time frame,” said the company spokesperson who noted that Hershey’s team plans to recover previous cocoa costs over the next few years while keeping brands affordable and accessible.
“We’re committed to delivering the treats consumers love while continuing to invest in making our products and experiences even better. To support our approach, we’re making a price adjustment with our retail customers. This change is not related to tariffs or trade policies. It reflects the reality of rising ingredient costs, including the unprecedented cost of cocoa. We’ve worked hard to absorb these costs and continue to make 75% of our product portfolio available to consumers for under $4.00, ensuring that Hershey treats stay accessible and affordable for families everywhere.”
Cocoa Market Latest
Contract prices for cocoa beans have come down 52.55% over the last year.
As of May 29, nearby contract values for cocoa beans on the London terminal fell 3.63% from the previous day to £2,975/MT, according to prices cited by Expana. Previously on April 1, 2024, contract prices were valued at £8,276/MT and rose to £9,926/MT by December 18, 2024.
“This year (2025/26) we’re still seeing an end-of-year cocoa surplus,” said Moriarty about the magnitude to which cocoa demand had been destroyed by previously record-high prices.
Expana’s view considers a dizzying number of factors like cocoa demand, current crop status, and more, according to the independent researchers and analysts on the fundamentals team who are also keeping an eye on any potential El Niño impact in the future.
“Overall, there’s been relatively weak demand for chocolate, weak interest in cocoa butter, but more robust demand for cocoa powder. So, we don’t expect the 2025/26 surplus to erode down, but next year we have concerns for the start of Ivory Coast’s main crop for 2026/27.”
Hershey’s Plan
While the cocoa market dynamics are still highly unsettled in the main growing region of West Africa, chocolate makers like Hershey will trudge ahead by investing back into their products.
“These decisions are backed by meaningful investment: A 25% increase in R&D to fund talent, technology, and nutrition science across our growing portfolio…,” said the Hershey’s spokesperson who also referred to the company’s ingredients page.
“Being thoughtful about our ingredients also means always listening… and looking for ways to deliver… So as tastes evolve, so do our recipes… like helping those reaching for plant-based or organic options… in treats from some of our most beloved brands like Reese’s and Hershey’s,” according to Hershey’s team.
For more cocoa market information, you can view our recent webinar on demand here.
Image source: Adobe
Written by Ryan Gallagher
