The Hershey Company
CorpDigest
The Hershey Company
Company History
Founded 1894 in Hershey, Pennsylvania
Last reviewed: 2026-06-06 · By Swet Parvadiya
Founded in 1894 by Milton S. Hershey in Lancaster, Pennsylvania, the company has built a multi-billion-dollar enterprise anchored by its unparalleled brand equity in the North American chocolate market, where it controls over 40% of the category. Undeterred, Milton returned to Lancaster in 1886 and founded the Lancaster Caramel Company, using the secret caramel recipe he had learned in Denver. He installed the equipment in a corner of his caramel factory and began experimenting with milk chocolate formulations, driven by a vision to mass-produce a high-quality, affordable milk chocolate bar for the American public. In 1900, Milton successfully launched the Hershey's Milk Chocolate Bar, a product that was revolutionary in its taste, texture, and affordability.
He chose a remote, rural area in Derry Township, Pennsylvania, near his childhood home, and began construction of the Hershey Chocolate Company factory in 1903.
Milton S. Hershey, born in 1857 in Derry Township, Pennsylvania, was an American confectioner and philanthropist who founded The Hershey Company and the town of Hershey, Pennsylvania. After experiencing multiple business failures in Philadelphia and New York City, Hershey found success with the Lancaster Caramel Company, utilizing fresh milk to create creamy caramels. However, his true passion lay in chocolate, and after witnessing German cocoa processing machinery at the 1893 World’s Columbian Exposition, he purchased the equipment and began experimenting with milk chocolate formulations. In 1900, he sold the Lancaster Caramel Company for $1 million and focused entirely on chocolate, perfecting a process to integrate fresh milk into chocolate without spoilage. He built a massive, state-of-the-art factory in his hometown and established the model town of Hershey to provide his workers with a high quality of life. Hershey’s introduction of the Hershey’s Milk Chocolate Bar and the Hershey’s Kiss revolutionized the American confectionery market, making chocolate an affordable, everyday treat. He also founded the Milton Hershey School in 1909, providing free education and housing to disadvantaged children, and established the Hershey Trust Company to fund the school, which today controls the majority of the voting power in The Hershey Company. Hershey’s legacy is defined by his relentless innovation, his commitment to his workers, and his creation of a brand that remains a cultural icon over a century later.
Milton S. Hershey founded the Hershey Chocolate Company as a subsidiary of the Lancaster Caramel Company, initially producing chocolate coatings for his caramels before recognizing the massive potential of solid milk chocolate.
Milton S. Hershey sold the Lancaster Caramel Company for $1 million to focus entirely on the chocolate business, retaining the chocolate department and the rights to the milk chocolate formula he had developed.
Construction began on the massive Hershey Chocolate factory in Derry Township, Pennsylvania, designed to be the most advanced chocolate manufacturing facility in the world, utilizing continuous-flow production systems.
The company launched the Hershey’s Kiss, a small, teardrop-shaped piece of chocolate that was individually wrapped in a thin strip of foil, becoming one of the most iconic and recognizable confectionery products in history.
Hershey launched Mr. Goodbar, a milk chocolate bar packed with roasted peanuts, which became a massive commercial success and established the company’s dominance in the combination chocolate bar category.
The company introduced Krackel, a milk chocolate bar with crisped rice, expanding its portfolio of everyday chocolate bars and leveraging its manufacturing expertise in rice processing.
While Reese's was founded earlier, Hershey acquired the brand in 1963, a move that would eventually create the company's largest and most profitable franchise, generating over $3 billion in annual retail sales today.
Hershey acquired Leaf Inc., adding iconic brands like Jolly Rancher, Whoppers, and Milk Duds to its portfolio, significantly expanding its presence in the non-chocolate confectionery market.
Michele Buck was appointed CEO, initiating a rigorous strategic transformation plan focused on portfolio diversification, manufacturing modernization, and supply chain resilience, which drove the company's success in navigating record cocoa inflation.
Hershey acquired Dot’s Homestyle Pretzels for $1.2 billion, a transformative deal that significantly expanded the company’s presence in the high-growth salty snack category and reduced its reliance on pure-play chocolate.
The company generated exactly $11.36 billion in net sales for FY2024, representing the successful culmination of the portfolio diversification strategy and demonstrating the resilience of its pricing power in a highly inflationary environment.
Hershey acquired Amplify Snack Brands to enter the better-for-you salty snacks category through its flagship brand SkinnyPop, one of the fastest-growing popcorn brands in the United States. The acquisition reflected Hershey strategy to diversify beyond seasonal chocolate into snacking occasions that occur year-round.
Hershey acquired Dot's Homestyle Pretzels and Pretzels Inc. to further build its presence in salty snacks. Dot's had become the fastest-growing pretzel brand in the United States through its distinctive seasoned pretzel twists that offered a flavor-forward alternative to traditional salted pretzels.
Hershey acquired Lily's Sweets, a leading better-for-you confectionery brand that uses stevia-based sweeteners instead of sugar, to enter the sugar-free and low-sugar confectionery segment. Lily's had built a loyal following among diabetics, keto dieters, and health-conscious consumers who avoided traditional sugar-sweetened candy.
After two failed candy ventures in New York and Chicago during the 1880s, Milton Hershey found success with his Lancaster Caramel Company, which generated the cash flow and manufacturing expertise to bankroll a new chocolate business. He founded the Hershey Chocolate Company in 1894, initially as a subsidiary that produced chocolate coatings for his caramels before he recognized the far larger opportunity in solid milk chocolate.
Convinced the future was in chocolate rather than caramels, Milton Hershey sold the Lancaster Caramel Company for $1 million in cash in 1900. He retained only the chocolate department and the rights to the milk chocolate formula he had developed, then used the proceeds to build a dedicated chocolate factory.
Construction of the Derry Township chocolate factory began in 1903, engineered as a continuous-flow plant capable of mass-producing milk chocolate at unprecedented scale. Milton Hershey built an entire company town around it with employee housing, schools, and recreation, and the operation launched the iconic teardrop-shaped Hershey's Kisses in 1907.
Crop failures in Ivory Coast and Ghana drove cocoa futures past $12,000 per metric ton in early 2025, roughly a 400% jump from historical averages near $2,500 to $3,000 per ton. Hershey leaned on forward contracts and hedges that lock in cocoa prices up to 36 months in advance to absorb the initial shock while protecting its market share.
Beginning in 2017, the company deployed over $2.5 billion in acquisitions to fold high-growth salty snack and better-for-you brands into its portfolio. That diversification pushed its reliance on pure-play chocolate down from more than 85% of net sales toward roughly 65%, reshaping it into a multi-category snacking platform.