Overview

When Brad Reese, the 70-year-old grandson of Reese's Peanut Butter Cup inventor H.B. Reese, bit into a bag of Reese's Peanut Butter Mini Hearts unwrapped in early 2024, he immediately spat them out—and then discovered the wrappers no longer said "milk chocolate" or "peanut butter." This episode of Planet Money follows Brad's indignant crusade against the Hershey Company, which has quietly switched to cheaper "chocolate compound" and "peanut butter cream" in many Reese's products, a practice the hosts label "skimpflation." The conversation blends family drama, FDA regulations, global cocoa supply chain chaos, and a taste test that reveals just how much the classic Reese's formula has changed—culminating in breaking news that Hershey's will revert to real milk chocolate by 2027.

0:00The Discovery That Sparked a Family Feud

Brad Reese, retired and living in West Palm Beach, Florida, was wearing a Hawaiian shirt covered in Reese's Peanut Butter Cup prints when he first spoke to the hosts. His love for the candy runs deep—his grandfather H.B. Reese invented the peanut butter cup in the 1920s. But that love turned to outrage when he bought a pouch of Reese's Peanut Butter Mini Hearts unwrapped. After two bites, he found them "not recognizable," "nasty," and "not edible." He spit them out and threw the rest in the trash.

Examining the wrapper, Brad noticed something alarming: the front and back no longer listed "milk chocolate" or "peanut butter." Instead, the ingredients were labeled "chocolate candy" and "peanut butter cream." This sent him on a store-by-store investigation of the candy aisle. He discovered that the Reese's Fast Break, the Reese's Sticks (which debuted in 1998 as "the crisp you can't resist"), and several other products had all dropped the "milk chocolate" label. The wrappers now said "chocolate candy" instead. For Brad, this was not a minor formulation tweak—it was "betrayal," like "somebody took a dagger and stabbed it in my heart."

Brad's reaction carries extra weight because he is not just any consumer. He is the grandson of H.B. Reese, who invented the Reese's Peanut Butter Cup. Brad's father was the youngest of H.B.'s 16 children. The family sold the company to Hershey in 1963—a transaction Brad, then seven years old, barely understood, except that his family moved from a normal house into a big mansion. Now, six decades later, Brad feels the brand bearing his family name is being degraded, and he has no power to stop it—except through public shaming.

5:08The Investigation: What's Actually in the Candy?

The hosts, Greg Rosalsky and Sarah Gonzalez, conducted their own investigation, purchasing $70 worth of Reese's products from a CVS. They found that Brad's claims were partially correct. The original Reese's Peanut Butter Cups—the classic, iconic ones—still say "milk chocolate" and "peanut butter." The mini cups and some Easter egg-shaped products also retain the original labels. Hershey's had told them via email that their "iconic Reese's peanut butter cups are made the same way they always have been," and that much is true.

However, on many other products—the unwrapped mini eggs, wrapped normal-size eggs, flat eggs, and chocolate bunnies—the labels read "chocolate candy" or "peanut butter cream." The hosts explain the legal distinction: "chocolate compound" uses some chocolate ingredients but not enough to legally qualify as milk chocolate under FDA rules. Similarly, "peanut butter cream" contains fewer than 90% peanuts, the FDA threshold for calling something peanut butter. Brad's term for this is "fake," though the hosts note it is more accurate to say the products use fewer cocoa and peanut ingredients, not zero.

The hosts coined the term "skimpflation" a few years ago to describe this business practice—degrading the quality of goods and services in response to inflationary pressures, rather than simply raising prices or shrinking package sizes. Greg Rosalsky, who wrote about it in the Planet Money newsletter, notes that even the Federal Reserve has started using the term. For Brad, this is a clear case of skimpflation: Hershey's is using cheaper ingredients while keeping prices similar, and the only way consumers can tell is by reading the fine print on the wrapper.

12:40The Taste Test: Can Anyone Actually Tell the Difference?

To test whether the ingredient changes are noticeable, the hosts conducted a blind taste test. They started with the classic Reese's Peanut Butter Cup, still labeled milk chocolate and peanut butter. Greg described it as "how iconic," comparing unwrapping it to "unwrapping a gift." Sarah nibbled the edges like a gerbil and declared it "as scrumptious as ever."

Then they tried the Reese's Peanut Butter Mini Eggs unwrapped—the same type of product that broke Brad's heart, just in egg form instead of hearts. Greg immediately noticed the smell was different. Sarah disagreed on the smell but admitted the chocolate was "not totally" right. She found the peanut butter cream "saltier" and actually preferred it, calling herself "old fashioned" for liking the original peanut butter better. Greg was more emphatic: "I give no allowances on the skimping of the chocolate." He found the experience "disappointing" and felt passionate about not wanting anything "skimped on."

The test revealed that the difference is detectable, especially for the chocolate component, but not universally disliked. Sarah's preference for the saltier peanut butter cream suggests that some consumers might actually prefer the new formula—or at least not notice the downgrade. This ambiguity is central to the economics of skimpflation: companies bet that enough consumers won't notice or care, allowing them to save costs without losing sales.

15:50The Economics of Cocoa: Why Chocolate Makers Are Skimping

To understand the business logic behind the ingredient changes, the hosts called Judy Gaines, a soft commodities consultant who is as passionate about chocolate as Brad Reese. Judy carries Valrhona unsweetened cocoa powder in her luggage everywhere she travels—a three-kilo box of what the hosts describe as "the Gucci or Lamborghini of cocoa powder." She specializes in soft commodities: sugar, coffee, cocoa, cotton, and orange juice—products that are grown rather than mined or drilled.

Judy explains the basics of chocolate production. Chocolate comes from "chocolate liqueur," which is made by fermenting, roasting, and grinding cocoa beans. This liqueur contains two components: cocoa butter (essential for texture and silkiness) and cocoa powder (essential for flavor). Under FDA rules, to be called "milk chocolate," a product must contain at least 10% chocolate liqueur, and all the fat in that liqueur must be 100% cocoa butter—no vegetable oil or palm oil substitutions allowed. If vegetable oil is used, it cannot legally be called milk chocolate.

The global cocoa supply chain has been under severe stress. Most of the world's cocoa comes from Ivory Coast and Ghana in West Africa. In recent years, funky weather—long droughts, extreme heat, and excessive rainfall—smothered cocoa production. By April 2024, the global price of cocoa butter had skyrocketed from $3,000 per ton to $25,000 per ton—record highs triple the previous peak from 1977. Then President Trump slapped high tariffs on Ghana and Ivory Coast on top of the already soaring prices. Faced with these cost pressures, chocolate makers pulled all three levers: they raised prices, shrank packaging (shrinkflation), and reformulated with cheaper ingredients (skimpflation).

22:16The Peanut Butter Question: Why Skimp on Peanuts Too?

The hosts raise a logical objection: peanuts are grown primarily in the United States, not West Africa, so why is Hershey's also skimping on peanut butter? Judy offers a technical explanation: the new chocolate formula, which uses vegetable oil instead of cocoa butter, has different texture properties. The peanut butter recipe may need to be adjusted to work with this new chocolate—to prevent "seepage" and ensure the product holds its shape in packaging. Hershey's told the hosts a version of this, saying that "different shapes simply require a different recipe to hold their form," and that for labeling purposes, that recipe is called a "cream."

Hershey's also emphasized that even when using peanut butter cream, they still start with "fresh ground peanuts." The distinction is quantitative, not qualitative: peanut butter cream means less than 90% peanuts, possibly 80% or 50%, rather than zero peanuts. The hosts note that this is not fake peanuts or fake cocoa—it's less of the real ingredients, combined with cheaper fillers like vegetable oil.

Judy suggests a broader business strategy at play: product differentiation for different market segments. She compares Reese's to a luxury clothing brand. The classic peanut butter cup is the "haute couture"—silky smooth, luxurious, still legally milk chocolate and peanut butter. The Reese's Sticks are "mid-market," like clothes sold at Macy's—pretty good but essentially an "imposter KitKat." The unwrapped mini eggs are the "discount store" product, meant for kids who "don't care" about quality. The hosts push back, saying they'd like to think their children would notice the difference, but Judy's point stands: the economics work because not all consumers have refined palates or strong brand loyalty.

28:17The Breaking News: Hershey's Reverses Course

The episode takes a dramatic turn when Greg receives a Bloomberg News alert while recording. Hershey's has announced it will stop using chocolate compound coating in all of its products, swapping it out as part of a "return to using classic milk and dark chocolate recipes" in all Reese's and Hershey's products by 2027. The hosts immediately call Brad Reese, who is out "partying" at Johnny Brown's in Delray Beach, Florida, and has not yet heard the news.

Brad's reaction is mixed. He is thrilled that the change is happening but furious that Hershey's is giving itself two years to implement it. "The very end will be ruined by that," he says. The hosts then confront Hershey's with the apparent contradiction: earlier, the company had insisted the compound and cream ingredients were about "innovation that consumers love." Now they are reverting to classic recipes. Hershey's response: "As consumer preferences continue to change about ingredients and tastes, we continue to evolve to meet these needs."

The Bloomberg article reveals that Hershey's CEO Kirk Tanner made the decision to change ingredients shortly after taking the role last summer—well before Brad Reese aired his complaints. This undercuts Brad's claim of victory, though the hosts note that public pressure may have accelerated the timeline. Brad, undeterred, plans to sing "Nightlife" by Willie Nelson at karaoke later that evening, suggesting his skimp-shaming campaign may finally be winding down.

30:41The Legacy and the Campaign

Brad's campaign has been remarkably effective for a retired 70-year-old with no formal authority over the brand. He wrote an open letter on LinkedIn, comparing the ingredient changes to damaging "a real tangible product identity that consumers have trusted for a century." He has made media appearances, documented ingredient changes on his website and LinkedIn, and generally made himself a nuisance to Hershey's. He describes his goal as putting the company "on notice."

The hosts note that other Reese's descendants have pushed back, writing their own statements saying the products are fine and that Grandpa Reese would approve of the current formulas. This family drama adds a layer of complexity: not all of H.B. Reese's heirs agree with Brad's crusade. But Brad remains undeterred, even as he admits the campaign is exhausting. He wants to return to his simple retired life—karaoke on Wednesdays at Benny's on the beach, naps, and wearing normal shirts without Reese's logos. "Reese's is no longer the enjoyable part of my life anymore," he says. "It's now just work."

The hosts reflect on the broader implications. Even if cocoa prices have fallen more than 60% from their peak in early 2025, and even if the Trump administration exempted cocoa beans from tariffs in November, there is no guarantee chocolate companies will revert to original formulas. The hosts cite the example of Coke and Pepsi switching from 100% sugar to high fructose corn syrup in the 1980s in response to high sugar prices—a switch they never reversed, even after sugar prices fell. Judy Gaines warns that some chocolate manufacturers may follow the same path, depending on economics and consumer behavior. The only way to force a reversal is if consumers notice, care, and refuse to buy the skimpy products.

Conclusion

This episode matters because it makes visible a hidden form of inflation that affects almost every consumer good. Skimpflation—degrading quality rather than raising prices or shrinking packages—is the sneakiest of the three responses to rising costs, precisely because it requires consumers to read ingredient labels and notice subtle changes in taste and texture. Brad Reese's crusade is both a personal family drama and a public service: he has forced a major corporation to confront its own ingredient choices, and his campaign may have accelerated Hershey's decision to revert to classic recipes. The episode also reveals the fragility of the global cocoa supply chain, the power of FDA labeling rules, and the uncomfortable truth that many consumers simply don't notice or care when quality declines. Whether Hershey's actually follows through on its 2027 promise, and whether other chocolate makers follow suit, will depend on whether enough people develop the palate and the vigilance of a 70-year-old retiree in a Reese's-print Hawaiian shirt.

Key takeaways

• Skimpflation is a business practice where companies degrade product quality (using cheaper ingredients or less of premium ingredients) instead of raising prices or shrinking package sizes, often in response to inflationary pressures.
• The FDA strictly regulates what can be called "milk chocolate" (at least 10% chocolate liqueur with 100% cocoa butter) and "peanut butter" (at least 90% peanuts); products that fall short must use labels like "chocolate candy" or "peanut butter cream."
• Global cocoa prices spiked to $25,000 per ton in April 2024 (from $3,000 per ton) due to droughts, excessive rainfall, and tariffs on West African producers, creating extreme cost pressure for chocolate manufacturers.
• Hershey's announced in 2025 that it will revert to classic milk and dark chocolate recipes in all Reese's and Hershey's products by 2027, though CEO Kirk Tanner claims the decision predated Brad Reese's public campaign.
• The ingredient changes are not uniform across the Reese's product line: the classic peanut butter cup still uses real milk chocolate and peanut butter, while newer shapes (mini eggs, hearts, sticks) use chocolate compound and peanut butter cream.
• Product differentiation explains some of the changes: different shapes require different recipes to hold their form, and companies may target different market segments (premium, mid-market, discount) with different ingredient quality.
• The Coke/Pepsi precedent (switching from sugar to high fructose corn syrup in the 1980s and never reversing) suggests that even if cocoa prices fall, some chocolate manufacturers may permanently stick with cheaper compound formulas.