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Milton Hershey

Milton Hershey

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

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). □

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Hershey, Milton

Milton Hershey

Born: September 13, 1857
Derry Church, Pennsylvania
Died: October 13, 1945
Hershey, Pennsylvania
Founder, Hershey Foods Corporation

For the first part of his career, Milton Hershey struggled to succeed in the candy business. Despite his early failures, he never gave up. Hershey's fame finally came as the first American manufacturer of milk chocolate. Using the most modern methods of production available, Hershey developed, as his slogan once said, "the Great American Chocolate Bar."

"We were starting out to do something new, something that had never been done before. We had to learn by doing things, and when we did them right, we did more of it that way. And what we did wrong, well, you had to remember that, too, so you wouldn't keep making the same mistakes over and over."

On the Move

Money was not plentiful for young Milton Snavely Hershey and his family. He was born on September 13, 1857, in Derry Church (sometimes called Derry Township), Pennsylvania. His parents Henry and Fanny were Mennonites, a small group of Protestants who lived simply and opposed violence in any form. Mennonites from Germany and Switzerland had started settling in central Pennsylvania in the 1680s. Most were farmers. Henry Hershey, however, was drawn to business, and he started more than a dozen ventures, including drilling for oil. These businesses, however, always failed, leaving the Hersheys scrambling for income.

Henry Hershey's different projects kept his family moving from town to town, disrupting his son's education. He never went beyond fourth grade. When the young Hershey was fourteen, his mother arranged for him to become an apprentice to a printer. As an apprentice, Hershey's job was to help his "master" and learn the trade. After just three months, Hershey was fired.

In 1872, Hershey tried a second apprenticeship with a confectioner based in nearby Lancaster. This job went better, and in 1876 Hershey had enough skills to enter the candy business on his own. Borrowing money from relatives, he moved to Philadelphia and started making taffy and caramel, selling the candy from a pushcart. The business lasted six years, but a partnership with his father ate away Hershey's profits. Hershey left Philadelphia in 1882 after suffering a mental breakdown that kept him in bed for weeks.

After his recovery, Hershey followed his father west, to Colorado. He took a job at a confectioner's making caramel. On the job, Hershey learned how to improve the candy's taste by adding fresh milk. From Denver, Hershey moved to Chicago and New Orleans, Louisiana, before settling in New York City. He worked for a confectioner and made his own caramels on the side, using the recipe he discovered in Colorado. He eventually started his own candy company. The company failed, as Hershey tried to grow too quickly.

Milton Hershey was generous with his wealth, but some people still saw him as cheap or a harsh employer. He sometimes snuck up on workers, trying to catch them sneaking a break on the job. He also refused to spend money on advertising. One story says that when he saw Hershey chocolate-bar wrappers thrown on the ground as garbage, he turned them over so the name showeda form of free advertising.

The Chocolate Town

Returning to Lancaster, Pennsylvania, Hershey once again borrowed money, this time from Harry Lebkicher, who had worked for him in Pennsylvania. Later, his mother and her family helped as well, and in 1886 Hershey formed the Lancaster Caramel Company. The company grew quickly, and Hershey was soon rich. In his biography of Hershey, One of a Kind, Charles Schuyler Castner writes that Hershey told one business associate, "One day I looked at the books, and there was over a hundred thousand dollars in the bank, and I didn't owe any of it."

Lifelong Member of the Hershey "Family"

After his mother died in 1935, thirteen-year-old William Dearden of Philadelphia was sent to the Hershey Industrial School. Dearden learned that in many ways, the boys at the Hershey school lived better than millions of American children of the era. They received three meals every day and wore new clothes. Outside of class, the boys took trips to concerts, theatres, and the movies. In return, they helped run the school, working on its farm and cleaning the buildings. Looking in on them throughout their stay was Milton Hershey.

Only a few graduates of the Hershey Industrial School stayed to work at the Hershey Chocolate Company, just oneWilliam Deardenworked his way up and eventually ran the company. After graduating high school, Dearden spent one year at a junior college funded by the Hershey Trust, then went to Albright College, in Reading, Pennsylvania. During World War II (1939-45), he spent one year at the Harvard Business School before joining the U.S. Navy as a supply officer. After the war, he worked in New jersey, returned to military service during the Korean War (1950-53), then came back to Hershey to work at the school where he had spent his teenage years.

Dearden began working at the chocolate company in 1957, serving as an assistant to the chairman, John J. Gallagher. In 1965, he took the newly created position of director of sales and marketing. Dearden led Hershey's first efforts to actively promote the company's products. In 1976, he was named chief executive officer (CEO) of the company. Despite his success, Dearden never forgot his roots or lost touch with workers and employees.

When Dearden stepped down as CEO of Hershey in 1985, the company had regained some of the ground it had lost to Mars, Inc., during the 1970s. To Dearden, strengthening the company was his way of repaying Milton Hershey. In an oral history about his life, Dearden said, "I felt I owed Mr. Hershey for what he did for me as a boy."

As the Lancaster Caramel Company grew, Hershey turned his attention to other foods. In 1892, he visited Switzerland, hoping to learn how to make cheese. On the trip, he discovered milk chocolate. The next year, Hershey bought equipment to make chocolate and began selling it along with his caramels. Perfecting his own milk chocolate, however, took several more years.

By 1900, Hershey was happily married to Catherine Sweeney. He and his wife enjoyed his riches from caramel, often traveling abroad. But Hershey was ready to try something new, and he sold his caramel business to devote himself to chocolate. Hershey did not necessarily want to increase his wealth. Instead, he planned to build his own town, where workers at his factory could make enough money to enjoy a good life. The idea struck his friends and family as odd. His wife, according to Joel Glenn Brenner in The Emperors of Chocolate, said her husband "ought to go have his head examined."

Hershey, however, was determined to build his own "Chocolate Town," on land he bought in his birthplace of Derry Church. He opened his chocolate factory in 1905. Work had already begun on the town, with Hershey planning neighborhoods and naming the main streets: Chocolate Avenue and Cocoa Avenue. Workers moved into the homes he built for them, and Hershey served as the town's fire chief, police officer, and mayor.

Life beyond Chocolate

In the factory, Hershey and his employees perfected their version of milk chocolate, then began selling it across the United States. Hershey's modern plant sped up the production of milk chocolate, which had previously been made by hand. Hershey put a long-time employee, William Murrie, in charge of the business, and he and his wife continued their travels. They also used their wealth to start the Hershey Industrial School for orphans. In a 1923 interview with the New York Times, Hershey explained why he founded the school: "I have no heirs; so I decided to make the orphan boys of the United States my heirs."

In his later food experiments, Milton Hershey made sherbet out of such vegetables as beets and onions. He also invented an ice cream that did not contain milk. Made mostly from rice flour, peanut oil, and sugar, this non-dairy ice cream was half the price of regular ice cream and came in chocolate, vanilla, and strawberry.

Hershey showed his commitment to "his" boys (girls were admitted later) in 1918. Three years after the death of his wife, Hershey gave almost his entire fortune to the trust that ran the school. Hershey, however, still worked closely with Murrie and others on how the company was run. During the Great Depression of the 1930s, Hershey hired hundreds of out-of-work Pennsylvania residents to construct new buildings in his town.

In 1937, on the night he celebrated his eightieth birthday, Hershey suffered a stroke. By some reports, he had only a few days to live, but Hershey recovered and kept busy looking for new crops to plant in Hershey and new candies to make and market. He kept an office in the Hershey plant and lived in two rooms at his former mansion, which he donated to the Hershey Country Club. Hershey also continued to travel, although he stayed close to Pennsylvania instead of traveling the world as he once did. Hershey remained active until his death in 1945. The company and town he founded continued to grow, the product of a man driven to give the world pleasure through chocolate.

For More Information

Books

Brenner, Joel Glenn. The Emperors of Chocolate. New York: Random House, 1999.

Castner, Charles Schuyler. One of a Kind: Milton Snavely Hershey, 1857-1945. Hershey, PA: The Derry Literary Guild, 1983.

Periodicals

Altman, Henry. "Hershey's 'New' Ingredient." Nation's Business (June 1983): p. 42.

"Hershey Foods to Close Some Plants and Cut Jobs." The New York Times (October 25, 2001): p. C4.

Novak, Janet. "The High-profit Candy Habit." Forbes (June 29, 1987): p. 76.

Wawro, Thaddeus. "The Candy Man." Entrepreneur (March 2000): p. 114.

Web Sites

Hershey Entertainment & Resorts Company. [On-line] http://www.hersheypa.com (accessed on August 15, 2002).

Hershey Foods Corporation. [On-line] http://www.hersheys.com (accessed on August 15, 2002).

Hershey Trust Company. [On-line] http://www.hersheytrust.org (accessed on August 15, 2002).

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