A New Company: 1894
In the beginning, the Hershey Chocolate Company was simply a wholly owned subsidiary of Milton
Hershey’s Lancaster Caramel Company. Using chocolate-making equipment purchased at the 1893
Columbian Exposition in Chicago, the company produced baking chocolate, cocoa and sweet chocolate
coatings for the parent company’s caramels. But things changed with the hiring of William Murrie to sell
the excess product to other confectioners. Murrie was so successful a salesman that the Hershey
Chocolate Company quickly turned into a viable concern on its own. Milton Hershey became even more
convinced that his future in the candy business lay in chocolate, not caramels.
Sweet Chocolate Novelties: 1895 – 1909
By 1895, the Hershey Chocolate Company was manufacturing 114 different items in all sorts of sizes and
shapes. Many were flavored with vanilla and given luxurious-sounding names like LeRoi de Chocolate,
Petit Bouquets and Chocolate Croquettes. Chocolate “segars” and cigarettes were also quite popular.
Some chocolate cigarettes and cigars, such as Vassar Gems and Smart Set Cigarettes, were purposely
marketed to women as an alternative to the tobacco variety. Chocolate was also touted as a source of
quick energy for athletes. The packaging for National Chocolate Tablets, which showed a bicyclist and
baseball batsman, proclaimed that “wheelmen and ball-players will find them very beneficial.”
The Baby in the Bean: 1898
On August 1, 1898, the company adopted a very distinctive symbol for its trademark. The small child in a
cocoa bean pod appeared on cans of HERSHEY’S COCOA up until 1936, when it was finally replaced by
the block lettering familiar today.
The “Baby in the Bean” went through many incarnations, sometimes holding a cup of cocoa, sometimes
a chocolate bar. Even the child’s hair and facial expression underwent changes over the years. The logo
symbol was finally retired in 1968, when the company was reorganized as Hershey Foods Corporation.
Finding the Formula: 1895 – 1904
While his company was successful enough selling sweet chocolate products, Milton Hershey was certain
the real market lay in milk chocolate. The problem was in developing a formula for manufacturing it
cheaply and efficiently, while still maintaining a high level of quality.
Hershey built a milk-processing plant on the family farm in Derry Township in 1896 and spent the next
several years developing a viable formulation for milk chocolate. Dressed in hip boots, Hershey worked
day and night, going back and forth between the condensing room and the creamery, rarely even
stopping for meals. Finally, in 1899, he cracked the recipe and became the first American to
manufacture milk chocolate.
Hershey’s Chocolate Factory: 1905
At the turn of the century, most industrial facilities were located in urban population centers and
transportation hubs (such as Pittsburgh with its steel mills or New York’s garment factories). But when it
came to selecting a site for his chocolate plant, Milton Hershey chose rural Derry Township in southcentral Pennsylvania.
For one thing, it was right in the heart of Pennsylvania’s dairy farming country and, therefore, close to
the source of an essential ingredient in the making of milk chocolate: milk. It was also near the port
cities of Philadelphia and New York from which imported cocoa beans and sugar could be obtained.
Finally, the region was populated by honest, industrious folk. Exactly the kind of workforce every
business owner dreams of.
Hershey Goes to Cuba: 1916
With the onset of World War I, the European beet sugar, which Hershey had been using to make his milk
chocolate, became increasingly scarce. So, searching for a more dependable source, Milton Hershey
started acquiring cane sugar plantations and constructing refineries in Cuba. Typically, he also
established a planned community for the workers, called Central Hershey, based on the Pennsylvania
model.
Hershey’s Cuban holdings eventually included 60,000 acres of land, five mills, a 251-mile railroad and,
not surprisingly, a school for orphaned children. By the end of World War II, the company found it no
longer needed its Cuban sources, and its sugar and railway interests were sold to the Cuban-Atlantic
Sugar Company.
Stepping Stones
Many Hershey products that are familiar today were originally produced for the confectionary trade and
were later reformulated for consumers. HERSHEY’S powdered cocoa, for example, has been
manufactured continuously since 1894. Also, Hershey was the first to sell chocolate syrup for home use
beginning in 1926. While Sprigs, the forerunner of HERSHEY’S chocolate chips, was introduced in 1928.
Not all products under the HERSHEY brand were so successful in the marketplace. HERSHEY’S mintflavored chewing gum, introduced in 1915, enjoyed only brief popularity. And a creation named the NotSo-Sweet bar was introduced in 1934, only to be discontinued in 1937.
A Kiss and Tell Story
Of course, the very first addition to the HERSHEY’S product line of milk chocolate confections was
HERSHEY’S KISSES Chocolates way back in 1907. Originally, each one was hand-wrapped in a square of
silver foil, but in 1921 machine wrapping was introduced, along with the addition of the unique “plume”
which marked it as a genuine HERSHEY’S KISSES Chocolate.
The chocolates were not produced at all from 1942 through 1949 due to the rationing of silver foil
during and immediately after World War II. HERSHEY’S KISSES Chocolates were wrapped in colors other
than silver for the first time in 1962. HERSHEY’S KISSES with almonds were introduced in 1990 and the
first successful HERSHEY’S product using white chocolate, HERSHEY’S HUGS, in 1993.
Sweet Inventions
Two of the most successful products launched during ‘20s were the MR. GOODBAR and KRACKEL bars.
MR. GOODBAR, combining milk chocolate and peanuts, was introduced in November of 1925. According
to popular legend, Milton Hershey himself named the new product. Upon tasting it, he is said to have
exclaimed, “Now, that’s a good bar!”
The KRACKEL bar was introduced on September 14, 1938. During its first few years, the formula for the
confection changed several times, with almonds, and then peanuts, being included along with crisped
rice in milk chocolate. Finally, the nuts were eliminated altogether in 1943, leaving the crispy milk
chocolate recipe enjoyed by millions ever since.
Mr. Reese and his Cups
In 1923, a former Hershey employee named H.B. Reese decided to start his own candy company out of
the basement of his home. He made several different kinds of candy, but it wasn’t until five years later
that he hit upon his greatest idea: a confection of peanut butter covered by milk chocolate (purchased,
incidentally, from the Hershey Chocolate Company). During World War II, he discontinued his other
product lines and concentrated on producing only REESE’S peanut butter cups.
Despite its dependence on only a single product, Reese’s company prospered, and in 1963 the H.B.
Reese Candy Company was purchased by the Hershey Chocolate Corporation. Since then, the REESE’S
product line has grown to include REESE’S PIECES candies, the NUTRAGEOUS candy bar and
REESESTICKS.
Going Public
During the 1920s, the stock market became a powerful vehicle for raising capital. So in 1927, Milton
Hershey decided to take advantage of this fact by reorganizing his company and offering shares to the
public. His Hershey Chocolate Company was incorporated as the Hershey Chocolate Corporation. At the
same time, Hershey created another corporate entity named Hershey Estates, which included his nonchocolate enterprises and allowed him to continue providing funds for community projects. A third
corporation was established to handle the Cuban enterprises.
The initial stock offering in the new Hershey Chocolate Corporation consisted of 350,000 shares of
convertible preferred stock, and the opening price was $61.50 a share. It turned out to be quite a
bargain.
The Ration D Bar
The U.S. Army’s requirements were quite specific. For troops engaged in a global war, they needed a
ration bar that weighed about four ounces, would not melt at high temperatures, was high in food
energy value, and did not taste so good that soldiers would be tempted to eat it except in an
emergency. This last objective in particular was certainly a new one for the Hershey Chocolate
Corporation. Nevertheless, its chocolate technologists came up with something that passed all tests.
Named “Field Ration D,” it was so successful that by the end of 1945, approximately 24 million bars
were being produced every week. More successful still was HERSHEY’S Tropical Chocolate Bar, a heat
resistant bar with an improved flavor developed in 1943. In 1971, this bar even went to the moon with
Apollo 15.
The HERSHEY’S Bar in Stalag 3
No one was injured when T/Sgt Milton McCracken’s bomber was shot down over Italy and the crew had
to bail out that day in May of 1944. But no sooner had they hit the ground than they were captured by
enemy soldiers and transported to the first of a series of POW camps in Germany.
Fortunately that winter, McCracken received a very special parcel from home, one that contained a fivepound HERSHEY’S Bar. Hearing that they were soon to be marched to another camp, the men in
McCracken’s hut decided to share the chocolate evenly to give them the energy to survive the long, cold
march. Remembers McCracken, “We left the end of January and walked for about six days.” Thankfully,
he and his buddies made it. And were liberated four months later.
The Hershey Hellion
It was only four days after D-Day in 1944 when the Hershey Hellion took some flak and crashed into a
field in the French countryside near Renes. That, by the way, was what Flight Officer John W. Ginder had
christened his Thunderbolt dive bomber. A native son of Hershey, Pennsylvania, he even had a Hershey
bar painted on the side of it right below the cockpit. And while Ginder only had a few cuts and bruises,
his faithful plane was now just burning wreckage.
Fortunately, like a lot of American flyboys, Ginder was hidden from German patrols by friendly French
farmers. Eventually, he joined up with members of the Maquis, the French resistance movement, and
even accompanied them on night raids. After two months, an armored patrol from General Patton‘s
Third Army showed up, and Ginder was reunited with his unit. And his next plane? Hershey Hellion #2,
of course.
Der Schokoladen-flieger
In the early hours of June 24, 1948, the Russian Soviets halted all traffic into and out of Berlin, effectively
cutting off the entire city. Almost immediately, the U.S. Air Force commenced an airlift of food supplies
to trapped inhabitants. One of the pilots flying the Berlin Airlift was 1st Lt. Gail Halvorsen of Garland,
Utah. Seeing a crowd of children at the end of the Templehof airport runway, Halvorsen started
dropping HERSHEY’S chocolate bars for them whenever he made a run in his C-54 plane.
The delivery system was straightforward enough. He tied a handkerchief to each candy bar, which acted
as a tiny parachute, and dropped them out the plane’s flare chute. Flying into Templehof, he’d wiggle his
wings, so the children would know to expect their heaven-sent treats. Thanks to his candy drops,
Halvorsen soon became the most widely publicized symbol of the Berlin Airlift. But the children simply
called him The Chocolate Flier.
Up, Up and Away
Despite Milton Hershey’s death in 1945, Hershey Chocolate Corporation retained the entrepreneurial
values of innovation and risk-taking imprinted on it by its founder. Throughout the post-World War II
period, a host of new products were introduced, many of which were successful, some of which were
discontinued after only a few years.
By the 1960s, the company was ready to enlarge the scope of its operations. One example of this new
approach was the purchase in 1963 of the H.B. Reese Candy Co. Another was the company’s
diversification into pasta manufacturing with the acquisition of San Giorgio Macaroni, Inc. and
Delmonico Foods, Inc. The company also expanded geographically, building new chocolate plants in
Ontario, Canada and Oakdale, California.
Advertising to the Nation
Except for a TV and billboard campaign in Canada in 1964, the company had never really done
advertising on a national scale. In 1968, the newly renamed and reorganized Hershey Foods Corporation
announced plans for a nationwide consumer advertising campaign spearheaded by the famous Ogilvy &
Mather ad agency.
Starting with a Sunday newspaper supplement in July, 1970, followed two months later by television and
radio commercials, the campaign was an immediate success. Sales of REESE’S peanut butter cups and
HERSHEY’S KISSES Chocolates, in particular, rose dramatically. But while the company today continues to
advertise in all media, the quality of our products is still our best form of advertising. Milton Hershey
would have liked that.
E.T. Makes a Good Choice
In the early 1980s, Hershey executive Jack Dowd met with Hollywood producer Steven Spielberg and
struck a deal to include REESES’S PIECES candy in Spielberg’s upcoming film, E.T.: The Extraterrestrial.
When Hershey Chocolate Company President Earl Spangler first saw the movie’s promotional materials,
he told Dowd, “That’s the ugliest creature I’ve ever seen.”
After its successful premiere, the movie was screened by the company’s managers and top brass. When
the film ended, there was first silence, then wild applause. Like many others, Spangler emerged from the
theater with moist eyes. “Is he still ugly, Earl?” Dowd asked. Replied the company president, “He’s
beautiful!” Both the lovable alien and his candy of choice became instant hits nationwide.
Hershey Goes International
In addition to being the leading producer of chocolate and non-chocolate confectionary and other
grocery products in North America, The Hershey Company also carries on a significant international
presence with operations in more than 90 different countries.
Hershey's International division exports HERSHEY’S chocolate and grocery products worldwide and
maintains licensing agreements with partners in nations such as South Korea, Japan, the Philippines and
Taiwan. We don’t believe Milton Hershey would have been at all surprised to learn that his HERSHEY’S
KISSES Chocolates are especially popular in Japan.
Top of the Charts
Through unceasing technological modernization, strategically astute acquisitions and continued new
product development, The Hershey Company grew spectacularly in the last 30 years of the 20th century.
From $334 million in 1969, the company’s net sales soared to $4.4 billion in 2004.
The Hershey Company is the leading North American manufacturer of quality chocolate and nonchocolate confectionery and chocolate-related grocery products. The company also is a leader in the
gum and mint category.