Hershey wants to add more health benefits to its sweets and snacks as the food giant’s CEO targets functional foods as an “important” growth driver for the business.

The Pennsylvania-based Reese’s and Hershey’s Kisses manufacturer has been playing in functional foods for a few years, with offerings including Fulfil protein bars. But as shoppers prioritize nutrition and wellness benefits when they eat, 132-year-old Hershey is putting more resources behind functional foods under new CEO Kirk Tanner.

“We’re investing in the space so that we can continue to be relevant for consumers,” Tanner said in an interview at the company’s recent investor day in New York City. “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.”

Functional foods generally refer to products that deliver specific benefits for consumers,  covering a wide range of ingredients and attributes that can boost everything from physical to mental health. The space has become ripe for innovation as more consumers prioritize their health and turn away from processed foods with no nutritional benefits. 

The $138 billion functional foods market surged 4% during the last year ending Feb. 22, according to data provided by Spins. Categories Hershey participates in experienced some of the most robust growth, with shelf-stable candy growing 8.7% and wellness and snack bars growing 11.8%. Chips, pretzels and snacks also increased 3%, the information showed.

Tanner, who took over the top spot at Hershey last August, said the company is “exploring a lot of spaces” within functional ingredients, though he declined to divulge specifics. Hershey is focusing on scaling the segment over the long term and “has an aspiration for how big we can build that business.”

The snacks maker, with $11.7 billion in sales during 2025, plans to see whether an existing brand can stretch into functional foods, Tanner said. Hershey could also decide to pursue an acquisition to fill the void or give it a deeper presence, similar to its purchase of better-for-you snacking platform LesserEvil last year. 

Hershey executives highlighted LesserEvil and gum and mint brand Ice Breakers as ripe for functional benefits that could drive new consumption occasions. 

Ice Breakers, for example, has already seen an uptick in demand among consumers using GLP-1s because this cohort uses mints to manage nausea, a common side effect of the medication. Executives also said there are opportunities within the brand to add functional ingredients.

Hershey additionally expressed optimism over its partnership with VitaKey, where the two companies are working on time-released nutrients such as protein and fiber, which can deliver benefits over a longer period of time.

“Just imagine a snack that can deliver benefits where, when, and how your body needs them,” Stacy Taffet, Hershey’s chief growth officer, told analysts during the investor day.

Functional products also open the door for brands to provide more usage occasions for consumers and create a well-rounded portfolio, including everything from indulgence to wellness. 

“That’s 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.”