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Milton Hershey: From Bitter Start to Sweet Victory

As a young boy, Milton Hershey would have never imagined that he would one day become a household name.

Milton Hershey: From Bitter Start to Sweet Victory
Milton Hershey: From Bitter Start to Sweet Victory

IT BEGAN ON A DAIRY FARM

In 1856, Milton Hershey was born in the rural dairy farming community of Derry Township, Pennsylvania. He was a part of a rural religious farming community of Mennonites—a form of Christianity originating in Switzerland—so he was raised speaking Pennsylvania Dutch rather than English. As a young boy, Milton worked on the family dairy farm, but life was incredibly difficult. Many men living in rural areas couldn’t make enough money, and were forced to work in city factories with unsanitary conditions. His father, Henry, would disappear for months at a time, only to return to move the family somewhere new. His mother, Veronica, gave birth to his younger sister Serena, only for her to die at just 4 years old. Milton was forced to stop going to elementary school in the 4th grade so that he could work.

My experience has shown me that the people who are exceptionally good in business aren’t so because of what they know, but because of their insatiable need to know more.” -Milton Hershey

When he left school, Milton had his first apprenticeship with a newspaper printer that published in both German and English. He didn’t enjoy the work, but still continued to go, because it was a good opportunity. One day, he accidentally dropped his hat into a machine. Instead of seeing that it was just a child’s honest mistake, Milton was fired on the spot. For the young Hershey, it would likely have seemed like a huge tragedy. He may have felt like his chances of escaping a simple farming life were done. But at 14 years old, Milton Hershey began another apprenticeship that would have seemed like a dream job to a teenage boy, but which also led him on the path to his future millions. He began working for a local candy maker.

 

10 YEARS OF BAD BUSINESS

Milton Hershey had multiple false starts before his ultimate success. From the ages of 14 to 18, he worked as an apprentice. Once he was old enough, he moved to Philadelphia to open up his own candy shop specializing in individually wrapped caramels. Unfortunately, the business was a failure. At first, he thought the issue must be the location. So he moved to Chicago, New Orleans, and New York, but none of the moves helped make any money.

While in New York, Hershey decided that it was time to learn from more experienced mentors. He worked at a store called Huyler’s, and learned about all of the confectionaries that were made in the Big Apple. When he was working in New York, he obtained a caramel recipe that incorporated fresh cream into the mixture. At some point, a lightbulb went off in his head. His hometown of Lancaster, Pennsylvania was famous for having some of the most delicious milk and ice cream in the country. If he could start a caramel business in his hometown, he just might make it work.

My success is the result of not being satisfied with mediocrity, and in making the most of my opportunities.” -Milton Hershey

For 10 years, Milton Hershey had failed in running his own business, but he didn’t give up on his dream. He traveled back to his home town of Lancaster, Pennsylvania in 1883, broke and coming off of a huge losing streak. He had to borrow money from the bank in order to start up his newest venture, which was called the Lancaster Caramel Company. At the time, crawling back to your home town seems like a huge failure. But leaving the big cities to settle back in the small town is exactly what Hershey needed.

 

 

THE CANDY THAT MADE HERSHEY

Almost immediately after moving home, his candy shop started to do incredibly well. There wasn’t any competition in the local area, and he was able to use fresh cream from the local dairy cows. When he was in New York, he had learned to do things differently in his new store, and the knowledge and skills were essential for his success. He started selling caramels in bulk, instead of individual pieces for pennies. The quality of his caramels were so good, he became a well-known store. One day, a rich man from England arrived at his store to try the legendary cream caramel candy. He thought it was so good, he ordered a massive amount of caramel boxes to send back home to his friends and family. In one fell swoop, Milton Hershey was able to pay back his loan to the bank, and had money leftover for more ingredients.

By the 1890’s, The Lancaster Caramel Company had grown to 1,300 employees. They were now popular all over the world. In 1893, Milton Hershey traveled to the World’s Columbian Exposition in Chicago. This was the first time in his life that he tasted chocolate. It was so delicious, that another lightbulb went off in his head. If he could figure out a way to bring chocolate to the people of the United States, he could be incredibly rich.

Caramels are only a fad. Chocolate is a permanent thing.” -Milton Hershey

HERSHEY AND THE CHOCOLATE FACTORY

One of the best ways for an entrepreneur to make money is to identify something that people need, and figure out a way to give it to them. At the time, chocolate was extremely luxurious, and many Americans had never tasted it before. Chocolate was made in Switzerland, so you would have to either import it, or visit Europe to get a taste. At this point in his career, Milton Hershey was already doing well selling caramels. But he realized that the milk from the local Lancaster cows could be even more profitable when used to make chocolate.

Hershey reasoned that chocolate was so rare and expensive, because it was manufactured by hand. In order to be a success, his chocolate needed to be automated in a factory, just like everything else being produced during the Industrial Revolution. He was so confident in this belief that chocolate would be the next big thing, that he sold the Lancaster Caramel Company for $1 million. With the proceeds in hand, he moved forward in creating his chocolate factory.

Hershey’s Milk Chocolate Bar was their very first product, which was produced in 1900. During this time, he tinkered with the recipe to make sure he got it exactly right. So, by the time the factory opened, he was ready to make it in mass quantities. That same year, he purchased a huge property 30 miles (50km) away from Lancaster, in Derry Township, Pennsylvania. He always abided by the “golden rule”- to treat others how you want to be treated. So he was already thinking about how to create the best environment for his workers. That mindset, of always treating other people, with respect is one of the main reasons why he succeeded.

What I want to do more than anything else is to give my employees an opportunity of advancing themselves in this world, and to give them a helping hand. -Milton Hershey

 

 

THE TOWN THAT HERSHEY BUILT

Derry Township was so remote, they didn’t have very many amenities nearby. So he created an entire town so that his employees would have a nice place to live. He hired workers to build paved roads, affordable housing, as well as a quaint town square. They had their own lake, train station, ice skating rink, and an amusement park. It took 5 years of work before he could even begin opening the new business.

The factory and town both opened in 1905. This would become its own town called Hershey, Pennsylvania. After becoming fully established, the workers would write to their friends about how wonderful this place was. This within itself was great advertising. A picturesque American town that revolved around chocolate became a popular tourist attraction.

One of the biggest ways Hershey gave back to his community was by improving the local education system. Children of factory workers were given a high-quality, private education all the way through High School. He even founded the Hershey Junior College, and gave two years of free college tuition. For the less fortunate, he started The Milton Hershey Industrial School for Orphan Boys. Today, the school is no longer an orphanage, and is called The Milton Hershey School, which is a private boarding school for children from underprivileged families.

Instead of taking out ads in newspapers, he included free postcards inside of each Hershey chocolate bar. The photographs of the town looked picturesque, and enticed people to visit Hershey Park for their next vacation. Others were beautifully illustrated, and came with recipes on how to make chocolate cake, hot cocoa, and other recipes.


Give them quality. That’s the best type of advertising.” -Milton Hershey
 

As Hershey continued to succeed, he reinvested his profits in making the town better. He built a huge concert hall in 1910, which put the town on the map for tourism in a whole new way. Some of the biggest acts in the country began to perform there. It was a success in two ways. First, it gave much-needed entertainment to his rural workers that would normally only be available in big cities. And second, it also drew in tourist dollars as another income stream, when people traveled to Hershey, PA to see their favorite performers. Hershey made these decisions with his employees in mind, but they were always a win-win situation. When he put the needs of his workers first, he ended up making more money in the end.

 

 

BECOMING AN INTERNATIONAL ICON

Eventually, as the company continued to succeed, Hershey built a sugar refinery in Cuba so he could get the sugar himself, instead of from a third party. He named it Hershey, Cuba. Then, during World War II, he was commissioned by the US military to create Hershey’s Ration D Bar for the troops, as well as Hershey’s Tropical Chocolate, which was chocolate that wouldn't melt.

You can only make money by giving people what they want, and by making good use of your opportunities. -Milton Hershey

And as the years went on, opportunities continued to roll in for the Hershey company. In the years since, the corporation has been able to purchase smaller candy companies: Reeses, Kit-Kat, Rolo, M&M’s, and Twizzlers are all now part of the Hershey's empire.

But the legacy of Hershey’s goes far beyond candy. In Pennsylvania, The Milton Hershey School still exists, helping to educate less fortunate children. Visitors to Hershey Park are still greeted with smiles, and the warm fun of the founder. And today, even in the midst of trying times, chocolate sales have gone up 10%, and the company continues to thrive. Just this past year, Hershey’s brought in $8 billion in revenue, and has a net worth of $31 billion. All because of that same generous spirit of its founder, and the sweet dream that he followed against all odds.

Throughout the years, Milton Hershey demonstrated something we can all hold close to heart. By being guided by his moral compass he was always dedicated to something beyond his own success.