Milton Hershey

Summary

Before he became America's chocolate king, Milton Snavely Hershey was a serial business failure. Born in 1857 in rural Pennsylvania and largely self-taught after leaving school in the fourth grade, he apprenticed to a Lancaster confectioner and then struck out on his own. His first candy shop in Philadelphia limped along for several years before closing around 1882. He chased opportunity to Denver, Chicago, New Orleans, and New York City, and watched each venture fail in turn.

Hershey came home to Lancaster broke and, in the eyes of relatives who had lent him money, something of a disappointment. But two things he had picked up on the road would prove decisive: in Denver he learned to make caramel with fresh milk, and the experience taught him that quality dairy was the secret to candy that customers came back for. In 1886 he founded the Lancaster Caramel Company on that insight.

This time it worked, and spectacularly. The fresh-milk caramels won large orders, and within a few years the company employed well over a thousand people. In 1900 Hershey sold the caramel business for a reported $1 million, an enormous sum, and kept the chocolate-making equipment he had been experimenting with on the side.

He used the proceeds and his Hershey Chocolate Company to do something no American had done at scale: mass-produce an affordable milk chocolate bar. To make it, he built an entire town, Hershey, Pennsylvania, around his factory, and he poured his fortune into the Milton Hershey School for orphaned children. When he died in 1945, the failed shopkeeper had become one of the most generous industrialists in American history.

Timeline

The First Fortune

Milton Hershey was born on September 13, 1857, in Derry Township, Pennsylvania, into a Mennonite farming family. His formal schooling ended after the fourth grade, and at fourteen he was apprenticed to Joseph Royer, a Lancaster confectioner and caterer, where he spent roughly four years learning to make candy by hand.

In 1876, at nineteen, Hershey borrowed money from his aunt and opened his own candy shop in Philadelphia. He worked punishing hours making caramels and taffy by night and selling by day, but the shop never turned a real profit. After about six years he closed it, broke and exhausted.

What looked like a dead end was the start of an education. The trade he had learned was sound; the problem was capital, scale, and a product good enough to build repeat business. Hershey would spend the next several years, and several more failures, learning the rest.

The Fall

After Philadelphia, Hershey went west to Denver to join his father and took work with a local confectioner, where he learned the lesson that would later make him rich: caramel made with fresh whole milk tasted far better and kept longer. Armed with that knowledge, he tried again in Chicago, then New Orleans, then New York City, where he trained in the candy trade and opened another business.

Every one of these ventures failed. The New York shop struggled for about three years before closing around 1886. Undercapitalized and competing against established makers, Hershey could not convert his skill into a sustainable business, and the repeated collapses drained both his own resources and the patience of family members who had backed him.

He returned to Lancaster in the mid-1880s with little to his name and a reputation as a man who could not make a business stick. Relatives who had lent money were wary of lending more. By any conventional measure he was a failure approaching thirty, with a string of shuttered shops across the country behind him.

The Comeback

In 1886 Hershey founded the Lancaster Caramel Company, built squarely on the fresh-milk caramel technique he had learned in Denver. A large order, reportedly from an English importer, gave him the working capital and credibility he had always lacked, and the superior product did the rest. Demand grew quickly, and within a few years the company employed well over a thousand workers across multiple plants.

At the 1893 World's Columbian Exposition in Chicago, Hershey saw German chocolate-making machinery and became convinced that chocolate, not caramel, was the future. He bought the equipment, founded the Hershey Chocolate Company in 1894 as a subsidiary, and began experimenting with milk chocolate, then a costly luxury made mostly in Europe.

In 1900 he sold the Lancaster Caramel Company for a reported $1 million but deliberately kept the chocolate operation and its machinery. Working for years to perfect a milk chocolate formula that used fresh milk and could be made cheaply at scale, he turned an imported delicacy into an everyday American treat. The nickel Hershey bar made him a second, far larger fortune than caramel ever had.

The Turnaround

Legacy

Hershey did not just build a company; he built a town. Around his factory in the Pennsylvania dairy country he laid out Hershey, Pennsylvania, with homes, schools, parks, trolleys, and an amusement park for his workers, a model industrial community that survives today. The Hershey bar and, from 1907, Hershey's Kisses became fixtures of American life.

Having no children, Hershey and his wife Catherine established the Hershey Industrial School in 1909 for orphaned boys, and in 1918, three years after Catherine's death, he quietly transferred the bulk of his fortune, his controlling stake in the chocolate company, into a trust for the school. Renamed the Milton Hershey School, it remains one of the wealthiest endowed schools in the country, still funded by Hershey company stock.

Milton Hershey died of pneumonia on October 13, 1945, at age 88. The man who failed at candy shops in five cities left behind a global confectionery brand, a thriving town that bears his name, and a school that has educated thousands of disadvantaged children, an enduring monument built on a fortune that began with fresh-milk caramels.

Lessons

References

• Milton S. Hershey Wikipedia
• Milton Hershey The Hershey Company
• Milton Hershey | Biography & Facts Encyclopaedia Britannica
• Our Founder, Milton Hershey Milton Hershey School