When faced with challenges such as increasing energy, transport and farming prices, food companies have a number of options. The choice taken by The Hershey Company – most famous for its Reese’s products – was to quietly swap ingredients, replacing chocolate with compound coatings and substituting peanut butter for flavoured crème.
Yet they faced backlash for this unannounced change, especially when Brad Reese (grandson of the creator of the Peanut Butter Cups) publicly criticised the firm, as reported widely by media including the New York Post. In response, they confirmed they would be returning to their original recipes by 2027, with company bosses stating this change was already being planned before the open letter penned by Reese became a viral talking point across the internet. They were also keen to make it clear only 3% of their entire product line had been affected by the alterations.
It is a high-profile example of how a company’s decisions can be widely condemned, even at a time when the issue of food inflation is being experienced across the globe, with consumers fully aware of the pressure that brands are under to deliver products without passing on these increased costs.
But it is by no means the first: the Ferrero Group was criticised by fans of Nutella when they noticed its lighter colour, a result of a small increase in the percentage of sugar and milk powder. A handful of McDonald’s customers still talk about the ‘good old days’ when, they claim, the fries tasted better – before the company made the decision to begin using the healthier option of vegetable oil instead of beef tallow in the 1990s.
And, perhaps most famously, the recipe for Coca-Cola was changed in 1985. The sweeter version was not received well by customers, so much so that the return of ‘Coca-Cola Classic’ was swiftly announced – and cans still bear the phrase ‘original taste’ some 41 years on.
How does this relate to hospitality businesses?
In an era of volatile ingredient prices, all businesses are having the types of discussions Hershey bosses would have had before changing their recipes. And that undoubtedly includes hospitality firms, who are facing immense pressure to protect their margins – already as low as 3% for some restaurants according to CLFI. However, there is a dangerous seduction in the ‘quick fix’ of swapping a premium product for a cheaper alternative. This approach is not just a risk to flavour and quality, but a fundamental threat to consumer loyalty.
Firms must reflect on a history littered with cautionary tales of ‘reformulation backlash’, which shows us that when major manufacturers attempt to mask inflation by compromising the integrity of a product, consumers don’t just notice: they vote with their feet. Whether it is the inclusion of synthetic stabilisers or the shift towards less sustainable oils, the lesson is clear: the consumer is the ultimate auditor.
An invisible save not a cheap swap
True commercial innovation does not revolve around finding a less expensive version of the same product, as this eventually results in a reactive race to the bottom – and can even introduce new problems such as increased allergen risks or ‘muddy’ flavour profiles. Instead, a longer-term strategy which minimises the risk of customer dissatisfaction centres around proactive functional optimisation.
This approach focuses on the performance of ingredients rather than just their cost, achieving an ‘invisible save’ by working with suppliers to enhance yield and flavour or leverage clean-label alternatives. It is about honouring the ‘original taste’ mandate that consumers rightfully demand, while simultaneously turning to a more resilient product. The ultimate result is a reduction in cost, but not by decreasing quality or taste – by value engineering the product to be more efficient without the consumer ever detecting a change.
Mitigating food inflation should not mean a retreat from quality. It should be an invitation to innovate. By moving away from ‘cheaper’ and towards ‘smarter’, hospitality businesses can ensure that cost savings are found through innovation, not at the expense of consumer trust.
Because ultimately, in the battle against inflation, the most expensive mistake you can make is losing a product’s soul for the sake of a spreadsheet.
Andy Follows – Business Development Manager at AVE, specialising in the hospitality sector
