Why your favorite brands got so much worse

Hershey's used to grow by inventing things. Between 1995 and 2006 it launched product after product and revenue climbed from $3.6 billion to $4.9 billion, with operating margins swinging between 8% and 20% — volatile, because innovation is volatile.

After 2011 the pattern inverts. Revenue climbed from $6.1 billion to $11.2 billion, but the growth came from acquisitions — Krave, BarkTHINS, Amplify, Pirate's, ONE, Dot's, Weaver, SourStrips — rather than anything invented in-house.

The clearest tell is volume against price. Hershey's raised prices 7% in 2009, 6% in 2011, 9% in 2023 and 7% in 2025 while unit volumes fell 1%, 2% and 4% — record earnings on fewer products sold.

Kellogg's ran the identical play: annual price increases of up to 12% against volume declines reaching 10%, and three consecutive efficiency programs — Keebler Integration, Project K, Deploy for Growth — spanning twenty years.

Cost-cutting funded the payouts rather than the products. Kellogg's saved $470 million a year under Project K and paid $3.6 billion in dividends over the same window; General Mills saved $600 million under Project Catalyst and paid $4.35 billion.

Kraft Heinz is the pure form. Zero-based budgeting cut $1.75 billion a year while the company paid out $10.9 billion in dividends — and in 2018 it wrote down $15 billion of brand value, booking a $10.2 billion operating loss.

Marketing tells the same story in reverse. Hershey's advertising spend more than doubled from $255 million in 2009 to $562 million by 2015 — the spending moved from making products better to persuading people the smaller ones were fine.

The payout shift is the whole thesis in one number: Hershey's paid shareholders $1.3 billion across the 1990s and $4.9 billion in the 2020s, while unit volumes went backwards.

The turn has a date and a cause. Cost-cutting is not new, but the pattern changes in 2011, months after Moneyball reached peak cultural currency — and both Hershey's and Kellogg's appointed new leadership that year on an explicit promise to hit financial targets.

Hershey's used to measure itself by what it kept alive. Executives once boasted that every brand launched from within the company since 1990 was still in production; by 2016 the stated policy was to invest only in brands that earned their keep.

Kellogg's chose an accountant on purpose. The board appointed a numbers person rather than a cereal person, explicitly to detach from legacy thinking and cut — and when the company missed earnings in 2014, the small group of brands generating 75% of revenue got the investment and the rest were starved.

Losing the creative muscle means buying growth instead of making it. With no internal pipeline left, Kellogg's paid $600 million for RXBAR in 2017 — a home run purchased rather than developed.

The private-equity takeover of Kraft Heinz in 2013 was explicit about the target: data and analytics would beat the 2% annual growth and 10% margins the old management had accepted as normal.

The tactics are precise, not vague. Oscar Mayer bacon was repackaged to 12 ounces and rebranded 'center-cut', selling 25% less meat for the price of a pound, and shaving a few drops off a bottle nobody notices is worth 30% more profit.

Kraft Heinz eventually admitted it in the accounts. The company took a $15 billion write-down on Kraft and Oscar Mayer, conceding it had harvested value and trust that those brands had taken generations to build.

The comparison that matters is that the same pressure existed before. Kellogg's, Hershey's, Kraft Heinz and General Mills all faced earnings pressure in the 1990s and 2000s — including private-label clones at half price — and their leadership answered it with Dreyer's slow-churned ice cream, Wonder Balls and Nerds Ropes instead of smaller packages.