Hero Worship

The Candy Man

Milton Snavely Hershey

Founder of The Hershey Foods Corp. (originally Hershey Chocolate Co.)

Launched: 1894

"Give them quality. That's the best kind of advertising in the world." --Milton Snavely Hershey

During the late 19th and early 20th centuries, when ruthless businesspeople were creating steel, oil and railroad empires on the backs of a hapless rural population forced into grim factory towns, Milton Snavely Hershey followed a different path to success. Unlike the cold-blooded "robber-barons" who offered their workers callous treatment and backbreaking labor for menial wages, Hershey offered his employees dignity and prosperity, inspiring loyalty in his workers and making himself rich.

Even so, Hershey's path to sweet success was fraught with obstacles and set backs that would have crushed lesser men. But through perseverance, ingenuity and his ability to bounce back from failure, he built one of the great American fortunes from the ground up and brought joy to millions with a beneficent wonder that would immortalize his name--Hershey's Chocolate.

Hershey began his candy-making career at age 15, when he was apprenticed to Lancaster, Pennsylvania, confectioner Joseph H. Royer. Hershey blossomed under Royer's tutelage, acquiring many of the skills and tools he would later use to build his own empire.

In 1876, with $100 from his aunt, Hershey opened his first candy shop in Philadelphia. Although Hershey worked day and night making caramels and taffies, the winter of 1882 was dogged by illness and mounting debt and he sold the business and headed to Denver.

It was while working for a confectioner in Denver that Hershey learned adding fresh milk to caramel improved its quality and extended its shelf life--a discovery that would later prove crucial.

Hershey eventually left Denver to start candy businesses in Chicago, New Orleans and New York City. But none of the ventures succeeded, and Hershey wound up bankrupt. When Hershey returned to Lancaster, he found he'd been cast out by his relatives--they refused even to take him in, let alone lend him money to start another business. But Hershey soon found salvation in the form of an old friend and employee.

Henry Lebkicher, who had briefly worked for Hershey in his Philadelphia store, not only offered Hershey a place to live, but also lent him the money he needed to bring his candy-making equipment from New York. The pair then scraped together enough capital to start Lancaster Caramel Co.

Drawing from his experiences in Denver, Hershey experimented with using fresh milk in the candy-making process. Impressed with the quality and shipping stability of Hershey's new, chewy, milk-based caramels, an English importer placed an order for £500 worth of candy, enabling Hershey to secure a $250,000 loan to expand the business.

By 1893, in addition to the original Lancaster factory, the now incorporated Lancaster Caramel Co. had plants in Mountjoy, Pennsylvania; Chicago; and Geneva, Illinois; which together employed more than 1,300 workers. But that was just the beginning.

During a visit to the 1893 World's Columbian Exposition in Chicago, Hershey witnessed a demonstration of chocolate-rolling machinery from Germany. Inspired, Hershey started Hershey Chocolate Co. the very next year and produced more than 114 different types of chocolate candies, including the product that would make his name world-famous--the milk-chocolate Hershey Bar. It became an instant phenomenon, so Hershey sold the Lancaster Caramel Co. for $1 million and turned his attention solely to chocolate.

Before long, Hershey set out to build an ideal town where his work force could live, play, work and prosper. Because of its rich supply of clean water, proximity to some of the finest dairy farms in the country, and plenty of land for expansion, Hershey chose land near his birthplace, Dairy Church, Pennsylvania.

In 1903, Hershey broke ground for his factory. It was modern in every way, with high-tech machinery that eliminated the cost and tedium of making and wrapping chocolate by hand, and made possible mass production of quality milk chocolate at affordable prices.

Hershey, Pennsylvania, the town developed by Hershey for his factory and employees, featured affordable housing, a sewage system, paved streets, electricity, schools, stores, a trolley system, churches, a library, a hospital, a zoo, an open-air theater and even an amusement park. Both the community and the company prospered; by 1915, the chocolate plant alone covered 35 acres, and company sales sky-rocketed from $600,000 in 1901 to $20 million in 1921.

When the stock market crashed in 1929, Hershey embarked on a building plan devised solely to keep his workers employed. They constructed a new high school, a sports arena, a community building and a lavish 170-room hotel. Both the company and the town survived the Depression and continued to flourish, thanks to Hershey's efforts.

Hershey remained at the helm of his chocolate empire until 1944, when he finally retired as chairman of the board at the age of 87. He spent the 88th and final year of his life still experimenting with new confections, including celery, carrot and potato ice creams and a surprisingly successful beet sorbet.

After Hershey's death in 1945, the chairman of the board of the National City Bank of New York proclaimed, "Milton Hershey was a man who measured success not in dollars, but in terms of a good product to pass on to the public, and still more in the usefulness of those dollars for the benefit of his fellow man."

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This article was originally published in the March 2000 print edition of Entrepreneur with the headline: Hero Worship.

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