Hershey's Leadership Transition: Can Kirk Tanner Steer the Chocolate Giant to Long-Term Growth?

The appointment of Kirk Tanner as CEO of The Hershey Company marks a pivotal moment for one of the world's most beloved confectionery giants. As the company grapples with rising cocoa costs, shifting consumer preferences, and intensifying competition, investors are scrutinizing whether Tanner's track record in turning around beverage and snack brands can position Hershey to thrive in the years ahead. This analysis evaluates the strategic implications of his leadership transition, the challenges ahead, and the case for long-term investment.

Evaluating Leadership Continuity: A Proven Turnaround Expert

Kirk Tanner brings over three decades of experience in the consumer packaged goods (CPG) sector, most notably from his 30-year tenure at PepsiCo. As CEO of PepsiCo Beverages North America, he oversaw a $28 billion portfolio and spearheaded a transformation that scaled emerging brands like Pure Leaf iced tea and bubly sparkling water. His ability to align innovation with evolving consumer trends—while driving profitability—earned him acclaim for revitalizing stagnant product lines.

While his 14-month stint at Wendy's ended amid declining stock performance and operational missteps, his core expertise lies in CPG, not fast food. At PepsiCo, he demonstrated mastery over cost management, mergers and acquisitions (M&A), and brand revitalization—skills directly relevant to Hershey's needs. The board's confidence in him reflects a strategic bet on his ability to continue the “Leading Snacking Powerhouse” vision pioneered by outgoing CEO Michele Buck, who expanded Hershey's portfolio beyond traditional chocolate into categories like salty snacks and gummies.

Market Challenges: Navigating Cocoa Costs and a Shifting Snacking Landscape

Hershey's near-term hurdles are stark. Cocoa prices have surged by over 30% year-to-date, squeezing margins. Meanwhile, the broader snacking category faces headwinds: consumers are trading down to cheaper alternatives, and health-conscious trends are reducing demand for sugar-laden treats. Analysts note that Hershey's chocolate sales have declined for three consecutive quarters, while salty snacks—a growth pillar—lag behind peers like Mondelez.

Compounding these issues are rising input costs, supply chain bottlenecks, and the threat of retaliatory tariffs on U.S. exports. In this environment, cost discipline and strategic innovation are non-negotiable. Tanner's experience in optimizing supply chains and renegotiating supplier contracts at PepsiCo could prove critical. His success in scaling niche brands (e.g., Pure Leaf's rise to $2 billion in sales) also hints at his ability to replicate such wins in Hershey's underpenetrated categories.

Strategic Implications: Can Tanner Deliver on the “Snacking Powerhouse” Vision?

The answer hinges on three strategic pillars:
1. Cost Management: Tanner must leverage his M&A and operational expertise to streamline costs. This includes renegotiating cocoa supply contracts, exploring vertical integration, and reducing overhead through digital tools.
2. Innovation & Portfolio Diversification: Expanding into higher-margin categories like protein bars, plant-based snacks, and premium chocolate lines (e.g., Artisan Collection) could offset declines in traditional products. His experience scaling Pure Leaf suggests he can replicate such successes.
3. Global Expansion: With 85% of revenue still generated in North America, Hershey must deepen its footprint in emerging markets. Tanner's international leadership at PepsiCo, including roles in the U.K. and Europe, positions him to execute this.

Critically, the company's $3.2 billion in cash and strong balance sheet provide the flexibility for strategic acquisitions. Potential targets might include smaller brands in the wellness or plant-based space—a move that could accelerate growth without overextending.

Investment Thesis: Buy the Dip, but Prepare for a Marathon

While Hershey's stock has underperformed peers in 2025 (down ~12% year-to-date), its long-term prospects remain compelling. The company's iconic brands—like Reese's and Kit Kat—retain 80%+ brand recognition in key markets, a moat against competitors.

Tanner's appointment signals a commitment to sustainable growth, not short-term gains. Investors should focus on his ability to:
- Stabilize margins through cost cuts and price hikes (Hershey's 2023 pricing initiatives drove a 5% volume decline, but margin expansion).
- Capitalize on underpenetrated categories (e.g., salty snacks, which represent only 10% of sales).
- Leverage M&A to acquire complementary brands at a time of industry consolidation.

Risk Factors: A prolonged downturn in discretionary spending, further cocoa price spikes, or missteps in innovation could derail progress.

Final Take: A Buy for Patient Investors

Hershey's transition under Kirk Tanner is a high-risk, high-reward bet. The company's structural challenges are clear, but its brand power and strategic opportunities in snacks and global markets remain unmatched. Tanner's proven turnaround expertise and alignment with Hershey's “Leading Snacking Powerhouse” vision make this a compelling long-term play.

Investors should accumulate shares on dips below $200 (a 15% discount to its 52-week high) and hold for 3-5 years. Success hinges on whether Tanner can execute on cost discipline, innovation, and M&A—proving that even in a tough market, Hershey can be a sweet bet.

Data as of July 7, 2025. Past performance is not indicative of future results.