Knowledge and Foresight
Mr. Hershey became fascinated with German chocolate-making machinery on exhibit at the Chicago International Exposition in 1893. He bought the equipment for his Lancaster plant and soon began producing his own chocolate coatings for caramels.
In early 1894, the Hershey Chocolate Company was born as a subsidiary of his Lancaster caramel business. In addition to chocolate coatings, Mr. Hershey made breakfast cocoa, sweet chocolate and baking chocolate.
In 1900, Mr. Hershey sold the Lancaster Caramel Company for $1 million. However, he retained the chocolate manufacturing equipment and the rights to manufacture chocolate, believing a large market existed for affordable confections that could be mass produced. He proceeded to prove his case.
He returned to his birthplace, Derry Church, and located his chocolate manufactuing operation in the heart of Pennsylvania's dairy country, where he could obtain the large supplies of fresh milk needed to make fine milk chocolate. In 1903, with the money he received for his caramel business, he began to build what is now the world's largest chocolate manufacturing plant. It opened in 1905, and Mr. Hershey's great contribution to the American food industry had begun -- the mass production of milk chocolate. Milton Hershey's employees were manufacturing and selling products which would become American traditions.
The chocolate business continued to thrive under Mr. Hershey's guidance, as did the community he established around it. A bank, department store, school, park, churches, golf courses, zoo, and even a trolley system (to bring in workers from nearby towns) were all built in rapid succession. Although the town was well established by its 10th anniversary in 1913, Mr. Hershey started a second building boom in the 1930s. During the Depression, he kept men at work constructing a grand hotel, a community building, a sports arena, and a new office building for the chocolate factory.
Mr. Hershey's belief that an individual is morally obligated to share the fruits of success with others resulted in significant contributions to society. Together with his wife, Catherine, he established the most prominent of his philanthropic endeavors -- the Hershey Industrial School -- in 1909, now called Milton Hershey School. Saddened because they had no children of their own, the Hersheys were anxious to put their growing fortune to good use.
Today, the 10,000-acre school houses and provides education for nearly 1,100 children whose family lives have been disrupted. Through the Hershey Trust Company, the School owns 31.4 percent of Hershey Foods' Common Stock classes outstanding, controls 76.0 percent of the corporation's voting shares, and is a direct beneficiary of Hershey Foods' success. (In addition, Hershey Trust Company owns 100 percent of the stock of Hershey Entertainment and Resort Company, another firm developed from several smaller businesses established by Milton Hershey.)