In 1900, Hershey released its first chocolate bar turning what once was a luxury into an affordable, accessible treat.
Over the last 125 years, the candy company has continued that innovation, bringing items like Reese’s, Twizzlers, and Jolly Rancher to our candy drawers. But now, it seems the retailer is ready to change tack.
In recent years, Hershey has expanded into other categories, acquiring snack brands like Skinny Pop, Pirate’s Booty, and One protein bars. Former CEO Michele Buck led much of that transition in the early 2020s.
“Our plan was to expand further into snacking, not diversify out of confections,” she told the Harvard Business Review in 2022. “We wanted to build the portfolio in a way that would capitalize on our strengths and offer consumers more snacking occasions.”
Newly appointed CEO Kirk Tanner recently told investors he’s committed to continue that growth path, further expanding Hershey’s reach outside of the candy aisle.
The functional food explosion
Functional foods are typically defined as those that offer specific benefits beyond basic nutrition. The phrase covers a wide range of ingredients and attributes that can affect everything from a consumer’s mental health to their physical well-being.
It’s a space that’s ripe for expansion, as consumers become increasingly focused on wellness.
Functional nutrition is one of the fastest-growing segments of the $2 trillion wellness market, a recent study by McKinsey & Company reports. In 2025, about 50% of the U.S. population, and 66% of Gen Zers, purchased functional nutrition products.
“This trend has been fueled by the shift toward food as preventative medicine, as consumers are becoming more aware of how food and beverage choices affect their health,” McKinsey & Company’s report said.
“Rather than only thinking of healthy food as foods that are free from certain components, such as gluten or sugar, consumers are now looking for foods that include high-value components, such as protein, nootropics, or turmeric.”
Going forward, the consulting firm expects to see the most demand for products that support energy, gut health, and immunity.
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Hershey’s foray into functional foods
Spotting an opportunity for growth, Hershey CEO Kirk Tanner recently told investors the confectionary company was eyeing ways to invest in the functional foods market.
“We’re investing in the space so that we can continue to be relevant for consumers,” he said in an interview at the company’s recent investor day in New York City, Food Dive reports. “To be in the space, it’s fast-paced, it’s fast-moving…You have to actually go faster than the rest of our portfolio.”
While he did not divulge specific details, Tanner did say that Hershey was “exploring a lot of spaces” within the functional foods market. Existing brands like Ice Breakers mints were highlighted as possible places the company may start adding those non-nutritive benefits.
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With a focus on long-term growth and “an aspiration for how big we can build that business,” he also noted that the company was considering acquisitions that would give them a presence in functional foods.
There is some precedent for that path — last year Hershey acquired LesserEvil, a “healthy alternative” snack brand that makes limited-ingredient popcorn and chips.
“[Functional foods is] where consumers are going, and we want to be a part of that,” Tanner said. “It just makes us a better company … and gives us more optionality in the future as well.”
Hershey won’t be walking away from candy
Chocolate fans should have no fear. Despite Hershey’s excitement over snacking and functional foods, the company says it has no plans to scale down its core candy offerings.
“This is the year of Hershey, and we’re investing in Reese’s as well,” Tanner told investors on Hershey’s Q4 FY2025 earnings call. “We’ve got a full year planned on both Reese’s and Hershey. You’ll see innovation on both. There’s big innovation coming out on Hershey.”
With the upcoming release of the Hershey biopic, set to coincide with the company’s 250th anniversary, consumers are sure to see exciting releases in the confectionary category.
“We’ve got equipment ready to go to make more candy,” CFO Steve Voskuil told investors.
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