After enduring years of failure, Milton Hershey (1857-1945) built a business empire as the world's first mass producer of chocolate bars. Through generous donations, he used his entire fortune to help those less fortunate than himself.
Milton Snavely Hershey was born on a central Pennsylvania farm in Derry Township, on September 13, 1857, to Henry H. Hershey and Fannie B. Snavely. Hershey inherited the entrepreneurial spirit from his father who moved the family often, attempting a variety of business ventures, including farming and cough drop manufacturing. Because of all the moves, Hershey's early schooling was haphazard, ending after the fourth grade.
At the age of 14, Hershey went to work as an apprentice with the printer of a German-American newspaper in Lancaster, Pennsylvania. After dropping a tray of type, made up of the hundreds of tiny metal pieces once used to print newspaper pages, he was fired. His mother found him a second apprenticeship, this time with Joseph H. Royer, a confectioner in Lancaster, Pennsylvania. From 1872 to 1876, Hershey helped Royer with his candy-making business and ice cream parlor, learning skills that would later help him build his own candy empire.
Tried and Tried Again
At the age of 19, Hershey parted company with Royer and started his own candy business in Philadelphia. He hoped to find an eager buying public in the thousands of people visiting the city for the Great Centennial Exposition celebrating the 100th anniversary of the Declaration of Independence. With money he borrowed from his uncle and the help of his mother and aunt, Hershey began making taffy and caramels, which were sold from a pushcart. The business scraped by for six years. In 1882, Hershey collapsed from the strain of working all day (selling the candy) and all night (manufacturing it). Forced to admit failure, Hershey closed up shop.
Hershey decided to seek his fortune in Denver, Colorado, along with his father, who had also moved west. He worked for a candy company in Denver, where he learned how to improve the quality of his chocolate by adding fresh milk. With his father, he moved to Chicago, and opened yet another candy business. Like the others, it also failed.
Moving to New York City in the spring of 1883, Hershey worked for a candy business called Huyler and Company, and started manufacturing Hershey's Fine Candies. Unfortunately, sugar prices increased and Hershey lost his candy-making machinery. In 1885, he returned to Lancaster, Pennsylvania.
After so many failures, his aunt and uncle refused to loan Hershey any more money. He became partners with William Henry Lebkicher, a man he had hired in Philadelphia. The two men scraped together enough money to start the Lancaster Caramel Company, where Hershey devised a formula using fresh milk to make "Hershey's Crystal A" caramels. Finally, he found success. An English importer ordered $2,500 worth of caramels to ship to England. The proceeds allowed Hershey to expand his business.
Borrowing $250,000 from the Importers and Traders Bank of New York City, Hershey expanded once again. The Jim Cracks, Roly Polies, Melbas, Empires, Icelets, and Cocoanut Ices sold very well. By 1893, the Lancaster Caramel Company had opened candy-making plants in Mount Joy, Pennsylvania, Chicago, and Geneva, Illinois, employing 1,400 people.
Established Hershey Chocolate Company
Hershey used the World's Columbian Exposition in Chicago-celebrating the 400th anniversary of Christopher Columbus's arrival in the New World-as an opportunity to study chocolate making as it was practiced in Europe. He examined chocolate-rolling machinery from the J.M. Lehmann Company of Dresden, Germany, finally deciding to buy it for his own company. At that time, milk chocolate was regarded as a luxury imported item, made by hand in a secret Swiss process. Hershey was confident that he could mass-produce enough chocolate to satisfy the demand of the American public. In 1894, he opened the Hershey Chocolate Company, producing breakfast cocoa, baking chocolate, and sweet chocolate coatings for the caramels.
After perfecting his recipe, Hershey expanded the business to produce 114 kinds of chocolates, including novelty items like chocolate cigars and chocolate bicycles. In order to focus all his attention on the chocolate business, Hershey sold the Lancaster Caramel Company in 1900 for one million dollars to his competitor, the American Caramel Company. He kept exclusive rights to supply dipping chocolate to the company, however, and used the money from the sale to build a new chocolate factory.
In 1897, Hershey purchased the Derry Church homestead where he had been born, intending to give the farm to his parents. Instead, he decided to use the rural Dauphin County land to build his chocolate plant, since it was ideally situated in an area full of dairies, and had plenty of fresh water necessary for cooling the factory's output. He bought 1,500 acres of adjacent property and, in 1903, began construction on the chocolate plant. Hershey knew his workers would need a place to live and raise their families. In conjunction with the new factory he planned and built an entire utopian community, complete with houses, a post office, churches, shops, schools, and even a trolley car for transportation.
Hershey planned that his new factory would mass-produce only one product, making it affordable for everyone. Working with his recipe makers, he developed a formula for milk chocolate that allowed for mass production. In February 1900, he introduced the milk chocolate Hershey Bar, which sold for pennies and brought affordable chocolate to the masses. The bars were so popular that Hershey found he did not need to advertise. Although the company continued its no advertising policy until 1968, Hershey was fond of the occasional self-promotion. One of the first automobiles in Pennsylvania bore the Hershey name painted on its side, drawing attention and orders for the Hershey salesmen who zoomed around at the car's top speed of nine miles per hour. Despite its cost of $2,000, a huge sum at that time, the electric car generated crowds and headlines wherever it went.
The company and the town prospered. In 1908, the Hershey Chocolate Company incorporated. By 1915, the plant had expanded to cover 35 acres, with sales growing just as quickly. Within 20 years, sales had increased to $20 million. The community, with its chocolate-related street names, offered housing, sewerage, electricity, schools, stores, a hospital, and fire department, a park and zoo, as well as a trolley line to bring in workers from neighboring towns.
In the years following the collapse of the stock market in 1929, nearly one third of United States workers lost their jobs. Anxious to help his own employees-plus take advantage of the Depression's low construction costs-Hershey embarked on a building project in 1930 that included a hotel, a high school, community building, sports arena, and a new air-conditioned office building. The Hotel Hershey incorporated his favorite details from hotels worldwide. Hershey would later note proudly that none of his workers were ever laid off during the Depression; in fact, he hired 600 additional laborers. The company diversified and branched out, making different kinds of candy, including the foil-wrapped Hershey's Kisses (introduced in 1907), Mr. Goodbar, the Krackel Bar, and Hershey's Miniatures. After losing money on a sugar deal, Hershey bought land in Cuba, where he began growing and processing his own sugar cane.
Despite efforts to anticipate his workers' every need, some employees attempted to form a union in 1937, to protest working conditions that included a 60-hour work week. The Congress of Industrial Organizations (CIO) shut down the factory with a strike that only ended when local dairy farmers, whose livelihoods depended on selling milk to the company, physically attacked the workers. By 1940, the American Federation of Labor (AFL) had organized a union at the plant, creating an association to promote and protect the rights of the workers.
Hershey's Living Legacy
In 1898, Milton Hershey married Catherine Elizabeth "Kitty" Sweeney, an Irish-Catholic from Jamestown, New York. Anxious to use their wealth to help those less fortunate than themselves, the Hersheys founded a school for orphaned boys in 1909. Originally called the Hershey Industrial School, it was designed to train boys in farming and industrial trades so they would become able to support themselves. After Kitty Hershey died in 1915, Hershey donated his entire fortune-$60 million-in a trust to the school. It was renamed the Milton Hershey School and expanded to serve children of both sexes from disrupted homes from kindergarten through high school. The 10,000-acre school, through its trust, owns 40 percent of the stock of Hershey Foods, and controls 75 percent of the corporation's voting shares. "I don't think I'd be alive today without that place," Hershey School graduate Randy Zerr told Eric Ries of Techniques. "If there's anything I can do for the school, I will." Zerr took advantage of the school's horticultural program and works as a groundskeeper at Franklin and Marshall College in Lancaster, Pennsylvania. Many Hershey graduates go on to college. Some have even graduated to executive positions within the Hershey Chocolate Company.
The Hershey Chocolate Company continued to create new products. During World War II, they developed an unmeltable, four-ounce bar with extra calories and vitamins, which could be used as emergency provisions for soldiers and sailors. The company made more than a billion of the "Field Ration D" bars. In 1942, the U.S. government gave Hershey the Army/Navy E award for his civilian contribution to the war effort. In 1995, he was honored once again by being pictured on a postage stamp commemorating him as part of the U.S. Postal Service's Great Americans series.
Hershey died in Hershey, Pennsylvania on October 13, 1945, one year after his retirement as chairman of the board. He was 88 years old. By the end of his life Hershey had donated most of his money to his town and the school he built. After his death, the sale of Hershey's personal possessions raised less than $20,000. The chocolate factory he built in Hershey, Pennsylvania, remains the largest in the world. In 1963, the Hershey Chocolate Corporation donated $50 million to build the Milton S. Hershey Medical Center of Pennsylvania State University, which houses a hospital, medical school, clinics, and research facilities.
The town of Hershey, Pennsylvania is still home to about 12,000 people and draws more than 30 million visitors each year. They come to see Hershey Park, which boasts a roller coaster, Ferris wheel, other rides, and a visitor's center. The center, built in 1973 to accommodate the massive crowds packing the factory tours, draws more visitors annually than the White House. Guests can take a tour through a mock chocolate factory that includes a ride through a simulated roasting oven, and culminates with samples of Hershey chocolate.
Further Reading on Milton Hershey
American National Biography, edited by John A. Garraty and Mark C. Carnes, Oxford University Press, 1999.
Morton, Marcia and Frederic, Chocolate: An Illustrated History, Crown Publishers, Inc., 1986.
Simon, Charnan, Milton Hershey: Chocolate King, Town Builder, Children's Press, 1998.
American History, March/April 1997.
American History Illustrated March-April 1994.
Business Week, February 22, 1999.
Candy Industry, October 1995.
Chicago Tribune, 1999.
Dallas Morning News, 1997.
Detroit Free Press, 1999.
Techniques, April 1, 1998.
Hersheys Corp., www.hersheys.com, (February 24, 1999).