3b. Milton Hershey (9/7)

What We Did: Our very first BSE field trip was spent in Hershey, PA where we visited not only the wonderful Hershey Park, but also the Hershey museum and school. Surprisingly, Milton Hershey did not always sell chocolate. He started his first business, Crystal A Caramels, in 1876 until it ended up going bankrupt after growing too fast. This was when Hershey first learned the importance of taking time developing a company.

In 1894 he experimented with chocolate making as a coating for caramels. Eventually, Hershey started to observe people completely sucking the chocolate coating off and then spitting out the caramel. It was then, in 1990, that Hershey used this association to influence his smart but risky business decision to sell his successful caramel company and focus on making chocolates. This was the first indication that Hershey was a disruptive innovator.

Hershey marketed his products by creating aesthetically pleasing window displays in his shops to attract wide audiences. The goal of mass production of chocolate was actually made it affordable to the American public. Milton Hershey was able to create a monopoly of the chocolate business. Growing demand + limited supply = opportunity.

The decision to move production back to his hometown of Derry Church was because it was much cheaper and richer in labor and natural resources. As Hershey’s success grew, he turned the town into a prosperous community based on culture, recreation, and education. Perhaps the most admirable action taken by Hershey was his commitment to give back to the community. In 1909, he established the Milton Hershey School for orphan boys. Nine years later, he donated all of his wealth and ownership of the company to the school.

Key Takeaways and Future Applications: Hershey was able to succeed because he learned how to innovate and create a name for himself. He questioned why each step in the chocolate making process was not focused on individually. This is how he came up with the idea or separating factory buildings by function. He also adopted the assembly line process after observing its success in the car making industry. He had his very own recipe for double-condensed milk, responsible for the signature Hershey milk chocolate taste. A work environment where workers could have creative input was widely advocated my Milton Hershey. This was because employees knew firsthand the challenges in production and they would have valuable ideas for making things run more smoothly.

The most important thing I learned from this outing was repeated failure can and will lead to success. Because he wasn’t schooled in the business field, he was essentially making everything up as he went along. He made sure to learn from his experiences and failures so as to know what to do differently next time. It was a relatively grueling process for Hershey to get on his feet in the candy-making world. He faced obstacle after obstacle but never gave up.  For example, he had to move his company several different times due to competitors trying to get rid of him through price restraints. Wartime rationing had a big impact on Hershey from 1942-1949 because of the value of aluminum foil. Hershey kiss production during this time was halted. Eventually, Hershey became the top chocolate company in the world. Hershey’s modesty is not something we see as often anymore. I never knew how generous he was to the community around him. Visiting the Hershey museum has definitely caused me to value good companies even more. After seeing all that Hershey gave back, there is no excuse for other successful companies to not be doing the same.