HERSHEY FOODS CORPORATION

Milton S. Hershey, the founder of Hershey Foods Corporation, was born in 1857 in central Pennsylvania. As a young boy Hershey was apprenticed to a Lancaster, Pennsylvania, candy-maker for four years. When he finished this apprenticeship in 1876, at age 19, Hershey went to Philadelphia to open his own candy shop. After six years, however, the shop failed, and Hershey moved to Denver, Colorado. There he went to work for a caramel manufacturer, where he discovered that caramel made with fresh milk was a decided improvement on the standard recipe. In 1883 Hershey left Denver for Chicago, Illinois, then New Orleans, Louisiana, and New York, New York, until in 1886 he finally returned to Lancaster. There he established the Lancaster Caramel Company to produce "Hershey's Crystal A" caramels that would "melt in your mouth." Hershey had a successful business at last.

In 1893 Hershey went to the Chicago International Exposition, where he was fascinated by some German chocolate-making machinery on display. He soon installed the chocolate equipment in Lancaster and in 1895 began to sell chocolate-covered caramels and other chocolate novelties. At that time Hershey also began to develop the chocolate bars and other cocoa products that were to make him famous.

In 1900 Hershey decided to concentrate on chocolate, which he felt sure would become a big business. That year he sold his caramel company for __BODY__ million, retaining the chocolate equipment and the rights to manufacture the chocolate products he had developed. He decided to locate his new company in Derry Church, the central Pennsylvania village where he was born, and where he would have a plentiful milk supply. In 1903 Hershey broke ground for the Hershey chocolate factory, which today is still the largest chocolate-manufacturing plant in the world.

Before this factory was completed in 1905 Hershey produced a variety of fancy chocolates. But with the new factory he decided to mass-produce a limited number of products, which he would sell at a low price. The famous Hershey's Milk Chocolate Bar was born, the first mass-produced chocolate product in the United States.

In 1906 the village of Derry Church was renamed Hershey. The town was not simply named after the man or the company: it was Milton Hershey's creation, the beneficiary of and heir to his energy and his fortune. At the same time he planned his factory, Hershey began planning a whole community that would
fulfill all the needs of its inhabitants. A bank, school, recreational park, churches, trolley system, and even a zoo soon followed, and the town was firmly established by its tenth anniversary. One of Hershey's most enduring contributions was the Hershey Industrial School for orphans, which he established in 1909 with his wife Catherine. After Catherine's death in 1915 the childless Hershey gave the school Hershey stock, valued at about $60 million. Today the school, which became the Milton Hershey School in 1951, still owns 31 percent of Hershey Foods Corporation's stock and controls 76 percent of the company's voting stock.

In 1907 Hershey's Kisses were first produced, and the next year the Hershey Chocolate Company was formally chartered. In 1911 it had sales of $5 million, more than eight times what it had earned 10 years earlier. The Hershey company continued to prosper, producing its milk chocolate bars (with and without almonds), Kisses, cocoa, and baking chocolate. In 1921 sales reached $20 million, and in 1925 Hershey introduced the Mr. Goodbar Chocolate Bar, a chocolate bar with peanuts. In 1927 the company listed its stock on the New York Stock Exchange.

By 1931, 30 years after the company was established, Hershey was selling $30 million worth of chocolate a year. As the Great Depression (1929–1939) cast its shadow on the town of Hershey, Milton Hershey initiated a "grand building campaign" in the 1930s to provide employment in the area. Between 1933 and 1940 Hershey's projects included a 150-room resort hotel, a museum, a cultural center, a sports arena (where the Ice Capades was founded), a stadium, an exotic rose garden, and a modern, windowless, airconditioned factory and office building. Hershey liked to boast that no one was laid off from the company during the Great Depression.

Though Hershey's intentions seem to have been wholly sincere there was always some suspicion about his "company town." Labor strife came to the company in 1937, when it suffered its first strike. Though bitter, the strike was soon settled, and by 1940 the chocolate plant was unionized.

In 1938 another famous chocolate product was introduced, the Krackel Chocolate Bar, a chocolate bar with crisped rice. The next year Hershey's Miniatures were introduced, bite-sized chocolate bars in several varieties.

During World War II (1939–1945), Hershey helped by creating the Field Ration D for soldiers, to sustain them when no other food was available—a four-ounce bar that provided 600 calories and would not melt easily. The chocolate factory was turned over to the war effort and produced 500,000 bars a day. Hershey received the Army-Navy E award from the quartermaster general at the end of the war. Hershey died soon after, on October 13, 1945.

After Milton Hershey's death, the chocolate company continued to prosper and maintain its strong position in the chocolate market. By the 1960s Hershey was recognized as the number one chocolate producer in the United States. In the middle of that decade the company began expanding beyond candy for the first time, acquiring two pasta manufacturers, San Giorgio Macaroni and Delmonico Foods Inc., in 1966. The company changed its name to Hershey Foods Corporation in 1968. An end of an era was marked in 1969 when the company raised the price of Hershey's candy bars to 10 cents. The bars had been priced at five cents for the past 48 years. Another key change came in 1970, when Hershey launched its first-ever national advertising campaign, having previously relied mainly on word of mouth advertising.

In 1977 Hershey bought Y&S Candies, Inc., the nation's leading manufacturer of licorice. Hershey acquired Peter Paul/Cadbury in 1988, thereby gaining such brands as Peter Paul Mounds, Almond Joy Candy Bars and York Peppermint Patties. Through the 1996 purchase of the North American operations of Leaf, Inc., Hershey gained the Good and Plenty and Jolly Rancher brands. By 1999 the company decided to concentrate solely on chocolate and candies, and it sold its pasta business that year. At the end of the twentieth century Hershey Foods was the number one candy manufacturer in the United States.

HERSHEY FOODS CORPORATION

FURTHER READING