Reese’s heir vs. chocolate skimpflation

Brad would rather be spending his time singing karaoke right now. I do Rolling Stone, Rolling Stones, I do to Pesh Mode. I just have fun. Brad is 70 retired in West Palm Beach, Florida.

And when we first talked to him, he showed up wearing a bright orange.

I guess Hawaiian sure, but with a bunch of Reese's Peanut Butter Cups all over it. Honestly, pretty snazzy. I mean, I guess I could call me a big Reese's fan. And it's his love of Reese's that is keeping him from his beloved karaoke right now. Yeah, because a little while ago, he heard that the Hershey company had released a new Reese's chocolate.

It was Reese's Peanut Butter, many hearts unwrapped. And of course, then I went out and bought one, bought a pouch. Brad opens the bag and pops a mini hearts in his mouth. And I took two bites and it was not recognizable. It was just nasty.

It was not edible. Brad spits out the mini hearts and he dumps him in the trash.

“But then he's like, wait, what was so off about those chocolate hearts?”

I retrieved the pouch wrapper and looked carefully at the front and the back. And there was no milk chocolate. And there was no real peanut butter. So it wasn't even, I don't know what I, Greg, I have no idea what I was eating or what I was tasting. Brad is like, what is even in here?

No milk chocolate? No peanut butter? In a chocolate Reese's peanut butter couple like product? I went to the store and just investigated everything I could. Brad starts scanning the candy aisles. Looking at the wrappers of other Reese's and Hershey's products.

I guess they were with the Reese's fast break? I am. Okay. One of my favorites? No longer milk chocolate.

Wow. The Reese's sticks have you had those? I have not had the Reese's.

“They're similar to a kick cap but peanut butter.”

And those came out in 1998. Very good. I love them. It came out as the crisp you can't resist. That used to be milk chocolate.

Again, taken off no milk chocolate. Yeah. The wrappers on these Reese's candies have changed. They used to say milk chocolate in on some other Reese's candies. They used to say peanut butter.

Now they say something else. Chocolate candy. They replaced milk chocolate with chocolate candy. And they replaced the peanut butter with peanut butter cream. And these words chocolate candy peanut butter cream.

They may sound like the real deal milk chocolate in peanut butter. But they are not. It's fake. It's compound coating. It's betrayal.

I felt betrayed. I mean, like somebody took a dagger and stabbed it in my heart. It'd be one thing if Brad were just like some random Reese's super fan. But Brad, he's the grandson of HP Reese. The inventor of the Reese's peanut butter cup.

Brad's name is Brad Reese.

And then I just said, wait a second.

I can do something about this. Hello and welcome to Planet Money. I'm Greg Rosolsky. And I'm Sarah Gonzalez. The Hershey Company is using ingredients in their candies

that legally they cannot label milk chocolate or peanut butter. And an air to a chocolate and peanut butter dynasty is now going after the brand that bears his family name.

“Today on the show, why chocolate makers might be skimping on the chocolate?”

And the peanut butter. All right. Obviously, we reached out to the Hershey Company to weigh in on the chocolate allegations made by Brad Reese. Angry grandson of the Reese's peanut butter cup inventor.

Hershey did not give us an interview. But they did tell us, if I email, that they're, quote, iconic Reese's peanut butter cups

are, quote, made the same way they always have been.

Which prompted a thorough investigation by Planet Money at various stores? Readably thorough. Wow. We have purchased $70 worth of Reese's products.

Oh, look at that CVS received G's. You can just hear it from a mile away. Honestly, Reese's peanut butter cups, my number one. Since maybe I was like four or five years old. I don't even think there's like, I can't even think of my number two.

Number one chocolate Reese's, Reese's. It's Reese's. Reese's. This would like rock my world if we're not pronounced Reese's.

It would be devastating. All right.

“Why don't we go through this assortment of chocolate”

that we have assembled here.

Here's what we found. The original Reese's peanut butter cups. As Hershey said, do still say that they are made with real milk chocolate and real peanut butter. That formula has not changed.

Same with the mini cups. And even some of the Easter related egg shaped horns. They also still say milk chocolate and peanut butter. But on some of the other products that we have here, Brad is right.

Those do say chocolate, candy or peanut butter, cream or both. Yeah, for example, on these mini eggs that are unwrapped. Also a more normal size egg one that is wrapped. Some flat eggs, some chocolate bunnies. On those, it is chocolate candy or peanut butter cream.

Brad thinks Hershey is escaping on their ingredients so much that they can't even call their stuff milk chocolate or peanut butter anymore. So they use work around words.

“Keywords are chocolate candy, chocolatey.”

Covered in chocolate made with chocolate. If you don't see the words milk chocolate, then it's fake. Fake is kind of a mean way of saying these candies are using what's known as a chocolate compound. Chocolate compound uses some chocolate ingredients,

but not enough to legally be called milk chocolate. Similar story with the peanut cream. Not enough peanuts to be called peanut butter. And for Brad Reese using fewer peanuts, using fewer chocolate ingredients.

This is important. That is a bit of an understatement.

Brad is basically accusing Hershey's of chocolate skimflation.

Skimflation. This is a term that we plant up money coined a few years ago. Greg, you, you are fantastic newsletter writer. You coined this. And now like the federal reserve is saying skimflation.

NPR, you cannot ever let me go. This is like, I'm a skimflation guy. I'm a skimflation guy. You can't skimp on me. Anyway, yeah.

So skimflation, it's a business practice in which companies degrade their goods and services. You know, like skimp on their quality. Often in response to inflationary pressures like higher ingredient costs or higher labor costs.

It's a sneaky form of inflation where instead of simply raising prices, companies skimp on the quality of their goods and services. On the quality.

Now, for the record, some Reese's products may have always been made

with chocolate compound and were never made with real milk chocolate or real peanut butter. But other products do seem to have actually switched ingredients or some might say skimped on the ingredients. They skimflated.

And Brad Reese, he's not happy with any of this. He says Hershey's is degrading his family legacy. So to understand where I fit in, okay, my grandfather, HB Reese was born in 1879. And my father was the youngest of his 16 children.

16, yes. So yeah, HB Reese paid a lot of mouth to feed. In 1916, probably a miss the screams of a ton of crying babies. HB Reese read in the newspaper that Milton Hershey, founder of the Hershey chocolate company,

needed more help on his dairy farms. Which, you know, supplied milk for his milk chocolate. Brad's grandpa, HB got the job. It was a start of a long-term business relationship and friendship between Grandpa Reese and Mr Hershey.

And then in 1923, HB formed his own company, the HB Reese's candy company. He had peanut clusters. He had caramel, he had coconut. And other time, there was this chocolate peanut butter

product on the market in Pennsylvania. It was a ball. Peanut butter ball wrapped in chocolate. And HB Reese, he has an idea. So what my grandfather did is he put it in a cup.

Ooh, it's in a cup now, guys. Innovating. All right, it was also-- It was also-- It was one part of the innovation.

My grandfather's genius was to perfect the peanut butter.

“The key has always been the peanut butter.”

He builds a chocolate and peanut butter empire. In the '50s, he hands control over to his six sons. And in 1963, those sons, they sell to Hershey. Okay, technically it's a merger, Brad's dad, and the other siblings, they get stock and a big payday.

I was only seven years old. I'd even know my family owned a candy company. I thought he worked there like everybody else.

that transaction was all about. Other than we moved from normal house into a big mansion.

Brad, which is his family never sold the company.

I guess, date in a normal house. Didn't move to a mansion. Yeah, he was just he had some control over the Reese's brand, especially right now. After he tasted those Reese's peanut butter

mini hearts unwrapped back in February and hated them, I just had to spit it out. I mean, slap me in the face, wake me up. After first tasting those mini hearts, Brad did what any third generation chocolate royal

with no power over the family company because it was sold over a half century ago. Could do. He wrote an open letter on LinkedIn.

“That's why I'm writing to you publicly today.”

This is Brad reading his open letter. My grandfather, HP Reese, who invented Reese's, built Reese's on a simple enduring architecture. Milk chocolate plus peanut butter.

Brad's basic thing is you're damaging the Reese's brand,

but you know, written with the seriousness of the declaration of independence. Not a flavor idea, not a marketing construct, a real tangible product identity that consumers have trusted for a century.

But honestly, can anyone but Brad Reese even really taste the difference between milk chocolate and chocolate candy or peanut butter versus peanut butter cream because in response to Brad's open letter, other Reese's descendants wrote their own letter

or statement or whatever being like, the products are fine. Grandpa Reese would be fine with the current Reese's products. I mean, Sarah, it wouldn't be a great American candy company without some family drawings.

Little family drama totally. So yeah, like in our continued thorough investigation, hello, Pulitzer Committee. We moved to this taste test face.

Should we start with the OG?

To set our palate. Here we go. We begin with the classic Reese's peanut butter cup that is still labeled milk chocolate and peanut butter. Oh my god, how iconic.

I love how they have the little wrap around it too. Like you open it and there's that little film. To me, it's like unwrapping a gift. Fantastic. I'm sorry, like it doesn't get better.

So I sometimes nibble at the edges. I just look a little durable just like. Okay, two bites, two bites and it's done. You know, you got to do two bites. The classic Reese's peanut butter cup.

It's just scrumptious as ever. Now we've got to taste the one labeled chocolate candy and peanut butter cream.

“This is where the investigation really picks up people, okay?”

I found Reese's peanut butter mini eggs unwrapped. So it's, you got that? All right, great. This is the same thing that Brad Reese had that he spit out except these are the eggs.

He had the hearts because it was around Valentine's Day. This is like broke Brad Reese's. All right, we're gonna do this up. Oh, look at this little tiny. Oh yeah, I see. They're unwrapped.

Honestly, I'm just gonna be honest. It doesn't smell the same. I think it does. No. I can bite it in half or pop it.

Yeah, I think just pop it in. No. I'm not joking. No. I'm not just saying this is not.

Totally. It's not. I mean, I can get on board with the peanut butter cream. But I give no allowances on the skimping of the chocolate. I like the peanut butter cream.

I'm just gonna say it. Do you? It's like saltier. I like the OG peanut butter. Um, call me old fashioned.

But um, I don't like a mystery. I don't, what is the cream? What does that mean? So yeah, I, I, I feel, I, I feel very passionate about peanut butter. So I, I, I, I, I don't want this.

I don't want anything skimmed on. It was a disappointing experience for me. I mean, listen, I love Reese's peanut butter cups as much as the next guy. Well, not as much as Brad. Not as much as Brad.

Yeah, yeah. Not as much as Brad. Obviously. I don't think, I don't think anybody likes it as much as him. But still, it stirred something in me.

Was it anger? Was it desperation in an existential crisis?

“Or was it yearning to understand why a storied chocolate company?”

Would use less chocolate and peanut butter. It has to do with the global chocolate supply chain. The shapes are fun chocolate comes in and the less discerning consumers who somehow may not even notice. That's after the break. Break me off a piece of that.

Hard cast and deriding. Oh, bear tone. And I get. To understand why chocolate makers are skimping on the milk chocolate right now.

And somehow seems to be as passionate about chocolate as Brad. You know, I travel a ton.

And in my luggage, I always, always, always, always.

100% carry with me Valrona on a sweet and cocoa powder. This is Judy Gaines.

“And honestly, we had to look up Valrona.”

I'd never heard of it. And apparently, this is like the Gucci or Lamborghini of cocoa powder. Because this stuff is like expensive. Super high in. It's a three kilo box.

You're buying kilos of cocoa. And you're like sprinkling it on things. Like, what do you do with it? I actually make hot chocolate with it. And sometimes it gets nailed by security as to what it is.

You're like, I'm in chocolate. I'm in chocolate. I work in chocolate. - It's so pop-up. - I'm like frisking you. And I just love it because you're a chocolate expert,

and that's just like so wonderful. (laughs) - Judy has a consulting firm that focuses on soft commodities. - So sugar, coffee, cocoa, cotton, orange juice.

“- So a hard commodity would be like crude oil, coal, gold,”

diamonds. Basically, hard commodities are mined or drilled.

Soft commodities are typically grown. And Judy, Judy is a soft commodity gal, particularly cocoa. - Yeah, definitely. - Before we get into chocolate economics,

cocoa, non-mix, if you will, you gotta know how we even get this miracle of nature and human ingenuity, we call chocolate. Chocolate comes from chocolate liquor. It sounds like something that would give you

like a really bad hangover, but it doesn't contain any alcohol. - Chocolate liquor is what you get when you take the cocoa pod, like the whole fruit, take the cocoa beans out, from anthem,

roast them, grind them up, the result is that chocolate liquor, which is part, cocoa butter, part, cocoa powder. - So it's sort of like having a jar of peanut butter that the oil rises to the top. - Judy says that cocoa butter part

is kind of essential for the texture

and silkyness of chocolate. The cocoa powder, it's more essential for the flavor.

“- And as we've mentioned, if you want to call something”

milk chocolate, the gluten drug administration doesn't mess around, they have strict, strict rules. - In milk chocolate, as per the FDA, it has to be in the U.S. 10% chocolate liquor at least 10%. - Let's say it's okay.

- Okay, okay, let's harmonize, at least 10% chocolate liquor. The oil catch on the FDA is that for whatever cocoa butter is in that milk chocolate, it must be 100% cocoa butter. You can't substitute any vegetable oil or palm oil. - It has to be pure cocoa butter people.

- I mean, come on, if there's vegetable oil in there. - That's the weak stuff, we don't want that. That's not chocolate, then it's not chocolate. - That's the weak thing. - That's the weak thing. - You need to go back to the investigation.

- Cue the sound, James. All right, when you flip over some of these racist products that we have in our hands, right here, you will see in the ingredients first sugar, then vegetable oil.

- The smoking skin flation gun, it's right there. - What? - Right in front of our face the whole time, Sarah. - Well, hold on, because do we know for sure that the motivation here is to scamp like could there be other reasons

to swap out the ingredients? Because in March, when we first heard from her, she's they suggested that they're use of chocolate compound and peanut butter cream was not skimplation that it was innovation that this was about new shapes

and sizes, new products and serving consumer preferences. - Yeah, yeah, yeah, we'll dive into more of that in a second. But I'm just gonna say it, like it's not this consumer's preference. - We know, we know, we know, okay, we are going to start with the evidence

that this is actually skimplation. - Okay, hear me out, guys. The case for skimplation, here we go. First of all, for years, big American chocolate companies, including Hershey's,

have actually lobbied the federal government to let them switch in vegetable oil for cocoa butter and still call their products milk chocolate. - The industry is like, please, please, please, please, you gotta help us out.

And the FDA says, no. - If you skimp on the cocoa, you cannot call it milk chocolate. - So why would you skimp? Like, surely, chocolate makers don't wanna have to call

their stuff chocolate can be or chocolate compound so why even do it?

we need to dive into the global chocolate supply chain.

“So there's been a dependency on the ivory coast”

and Ghana to supply a mass percent of the world's chocolate. - Yeah, most of the world's cocoa comes from the ivory coast and Ghana in West Africa. - And a few years ago, there was this funky weather. We're talking long droughts and extreme heat

and also excessive rainfall and that smothered cocoa production. And in April of 2024, the global price of cocoa went kuku. - The price of cocoa butter,

rather than being $3,000 a ton, went to $25,000 a ton. - Holy moly. - Yeah, that's a big difference. - Okay.

- This was recognized.

- So the last ton cocoa prices were high,

you know, like, nosebleed levels was in 1977 and now you have prices that are triple that level. - And then, President Trump also slapped high tariffs on Ghana and the ivory coasts on top of the already kuku for cocoa prices.

And Judy says, like, put yourself in the shoes of a chocolate manufacturer here. - I mean, it's impossible. - Now, when ingredient costs go through the roof, companies have three basic options.

- They can raise prices, you know, kind of like inflation on a product, but of course consumers do not love it when prices go up. Or they can shrink the amount of stuff they provide

in their packages, which is known as shrink-flation,

but consumers also don't love it when, you know,

the chip bag is now smaller or half empty. - Or they can skip on the quality of their product, what we have planet money. Really, Greg, our newsletter writer have dubbed "Skimpflation." - Skimping on the ingredients.

It's all pretty sneaky. It's all subtle. Some consumers, you know, with less refined chocolate and peanut butter pellets, and, you know, you zero,

“or me, or Brad Rees, they may not even notice, you know?”

And this recent cocoa shortage was so extreme that Judy says chocolate makers, they pulled all the levers. - They did raise prices, they did shrink the packaging, and they had a reformulate. - We got skimplation, we got shrink-flation,

we got inflation, they hit us on all fronts. - Which, like, okay, understandable. But we just right there, 'cause, okay, right? Like, yeah, drought and rainfall, West Africa, production problems with the cocoa, global supply chain,

and yada yada yada, you know, affected chocolate. - What about the peanut butter though? Because peanuts are grown in the United States for the most part, like, why are they skimping on the peanut butter? Why do we have peanut butter cream right now?

Like, what is the argument for that? - Come on, okay, okay, so it's not only about the price. - Yeah, it's not just about the price. Judy says maybe they change the peanut butter, so it works with the new chocolate formula.

- A part that's made with vegetable oil that doesn't have the same texture is they're going to be seepage and, you know, how does it stand up in packaging? - And Hershey's actually told us a version of this too,

and this is bringing us to the rest of Hershey's case that this is not skimplation, okay? They said, quote, different shapes simply require a different recipe to hold their form and for labeling purposes, that's referred to as a cream.

- As a cream, but they did say that even when they create different Reese's shapes and forms that they still start with quote,

“fresh ground peanuts, which is an important distinction,”

because to be clear here, peanut butter cream just means that Reese's is using less than 90% peanuts, which is the FDA rule for calling yourself peanut butter. So I don't know, maybe they're using 80% peanuts or 50% peanuts.

So when we say that they are not using real peanut butter or real milk chocolate, it's not like they're using fake peanuts or fake cocoa, it's more like they're using less peanuts and less cocoa. - Hershey's told us as we've grown and expanded

the Reese's product line, we make product recipe adjustments that allow us to make new shapes, sizes, and innovations that Reese's fans have come to love and ask for. - Yeah, and Judy says, maybe there's a broader

business strategy going on here too, okay? Because Reese's consumers aren't all the same and she says Hershey's is like differentiating their products for different segments of the market. - I would say, look at designer clothing.

- Think of like a luxury clothing brand. They have their hot tour, their fanciest clothes line. - For Reese's, that's the classic peanut butter cup, silky, smooth, luxurious, still, legally, milk chocolate and peanut butter.

- Then they have more like middle of the road clothes

- You know, like out of macy's or something?

- Okay, like mid-market Reese's, that's probably like the Reese's sticks or something, I mean, they're pretty good, but they're kind of just like an imposter kickcat. - I mean, like, what are we doing?

- And then they have offshoots for like the discount stores. - You know, the stuff you'd find out like a Ross. - And maybe for Reese's, that would be like the mini eggs unwrapped, and for those eggs, Reese's can use the chocolate compounds

or the peanut butter cream, because there was mini eggs, they're just not for me, though Reese's purest. They're more of like a down market product. - Yeah, Judy says these products,

maybe more meant for kids. - I'm kids, you don't care.

- I'd like to think my son would notice.

- I would like to think that we are raising children to notice the difference, the same. - I definitely taste the difference. I'm still trying to get it off my tongue. - All right, so maybe some of this

is the result of trying to make new products and shapes for different kinds of consumers. But if it has been about skimping in response to sky high cocoa prices, there's a chance that our national skimpy chocolate nightmare

might soon be over. - Because cost pressures have partly subsided over the last year. In November, the Trump administration, signing affordability concerns, exempted cocoa beans from tariffs.

And the production problems in West Africa seem to at least have been partially resolved. Since its peak in early 2025, the global price of cocoa has fallen more than 60%. So maybe, maybe chocolate companies will go back

to the real deal milk chocolate, right, Judy? - I'm gonna throw something at you, okay? - Okay, in the '80s. - The major soft drink manufacturers, co-papsy, switched from 100% sugar to high food toast corn syrup.

- That was in response to high sugar prices,

but soda makers, they never looked back.

- Judy, it sounds like you're saying you don't think these chocolate manufacturers are going to go back to the original milk chocolate formula.

“But that's what that example is telling me.”

Like, some will not, it really depends on the economics and what their sales are. And if consumers are buying it. - Yeah, our consumers buying it, are they even noticing it?

I mean, certainly you would not want someone announcing to the world like, hey, this isn't real milk chocolate anymore, but that is what Brad Reese is doing. He has mounted what you might call

a skimp-shaming campaign against her cheese. - I think I'm having an impact, I'm really do. They're not unnoticed, are they not unnoticed? - Yeah, it seems like they're unnoticed. This was not on my radar, and I actually love Reese's.

And now, and to be honest, now that, because of you, when I go to the store, I do look at the ingredients. Brad's been writing these open letters. He's making media appearances.

He's documenting Hershey's ingredients in their changes. And he's been updating his website, and his LinkedIn. But he's hoping his skimp-shaming tour can end soon. So we can go back and enjoy retired life. - I can go, I can do my karaoke at Wednesdays

at Benny's on the beach. (laughs)

“Yeah, that's what I want to get back to.”

I don't know where this is going to lead, because it is a lot of work. And I'm not against doing a lot work, but also, I need to take my naps, and I want to have a simple and enjoyable life.

And but Reese is no longer the enjoyable part of my life anymore. It's now just, I'll just go out and just be a normal person wearing a normal shirt, and we'll be talking about Reese's. That's hope is that consumers notice the new formula,

and that they won't settle for skimp-be chocolate, and that Hershey's is forced to go back, oh my gosh, I just got an alert Sarah. We're working on this story right now. This is breaking news for us.

(laughs) Hershey, this is from Bloomberg, business. Hershey will change the chocolate in a small portion of its Reese's and Hershey's products. The latest twist in a squabble over its ingredients

initiated by a grandson of the Reese's Peanut Butter Cup creator. - Brad, did it? - Brad, did it? - Okay, so let's put a pen in whether Brad did it or not, but yeah, Hershey's, it announced it,

we'll stop using chocolate compound coating in all of its products. - The moment the news broke, we of course call the batteries. - I have some news.

“- What news, what do you talk about, what's going on?”

- Brad was out on the town. We were talking to him on the phone on speaker and he had not yet heard the news.

so I'm out parting right out, so yeah.

- This is today, this just came out. The company said this is Hershey's,

“it will swap out a chocolate compound coating”

as part of a return to using, quote, classic milk and dark chocolate recipes and quote, in all Reese's and Hershey's products by 2027. - What, wait a second, to give themselves two years?

- There you come. - Wait, so you're not happy, Brad? - I can come on, did it the brand will be ruined by that. - We did tell Hershey that this recent ingredient changed by them seemed like a pretty big contradiction

to what they told us before that.

The compound stuff and the cream stuff was all about innovation that consumers love. They suggested it was not a contradiction. They said, quote, as consumer preferences

“continue to change about ingredients and tastes,”

we continue to evolve to meet these needs. - Now, as to whether Brad caused this to happen in the Bloomberg article, it does seem that Hershey says the Hershey Chief Executive Officer Kirk Tanner said he made the decision

to change the ingredients shortly after he took the role of the summer and well before Brad Reese aired his complaints. So I don't think-- (laughing) - Oh, that's hilarious.

- Okay, all right. - Wait, where are you?

- Johnny Browns and Delbreakton.

- Are you singing karaoke? - No, that's later tonight at 10 Roots at 9 o'clock. - What are you gonna sing? - I'll probably be singing light life by Willie Nelson. - You wanna give us a little?

- Oh, the night line. It's not a good line, but it's my line. Listen to what the blues are saying. (upbeat music) - Do you love the banter between your planet

when he co-hosts the chemistry? - Just enter and back and forth. It's like tennis. We're going back and forth just, banter and away. - Wanna see this all happen live on a stage

as we do a live taping of a brand new episode.

“But great, you are in love, you should come see us”

on the planet when you book tour. I'm gonna be in Santa Monica on April 16th with Jack Corbett from our famous famous planet when you take talk. You can see him doing his thing live on stage.

- Yeah, we're gonna be so many places. DC Seattle, Boulder, San Francisco, Toronto. We're going in a national baby. - We're going to the moon. We're going all over the place, baby.

Let's get wild. The book is called Planet Money, a guy to the economic forces that shape your life. And every stop is gonna be unique and different with different hosts, different guests.

If you get a ticket to one of our live events, you'll also get a book tour exclusive tote bag. We know you love a tote bag listeners. Okay, find the show near us to you at the link in our show notes or go to planetmoneybook.com.

And thanks for supporting us. - This episode of Planet Money was produced by the wonderful James Snaid. See you in the chocolate investigation sound again. One more time for the people.

- It was edited by Kenny Malone. Backjacked by Sierra Juarez and engineered by Sina La Freida. Alex Gomark is our executive producer. - I'm Sarah Gonzalez.

- And I'm Greg Rosalsky. This is MBR. Thanks for listening.