How the 5-Cent Candy Bar Revolutionized an Industry: The Story of Milton Hershey

Chocolate is probably one of my favorite things in the world.  Often times I would say that there really are only 4 basic food groups: bread, butter, cheese and well, you guessed it, CHOCOLATE! I know you’re laughing but it’s true!

What can we learn about life, business and risk-taking from chocolate? A LOT.  Since chocolate is a great love of mine, I thought I’d share a tremendously inspirational story about how the 5-Cent Candy bar revolutionized an industry and created completely new avenues of success and enjoyment for many.  It’s stood the test of time and is a stellar example of the constant need for businesses to “change, adapt and grow”.  Not to mention they have made many millions over.  I’m using Hershey’s as a study because their business has spanned more than a 100 years.  Which means they have to be doing something right!

What few people know is that in 1897, Milton Hershey was a caramel maker. At that time he went to an industrial fair where he viewed some very expensive chocolate making machinery.  Back in those days, chocolate was reserved for the elite, being considered a luxury item.

However Hershey has a different thought on the matter.  What if he could bring this luxury item to the main stream?  What if he could create and market a 5 cent candy bar? Would people buy it?

He promptly sold his caramel factory for $1 million in 1900. A kingly sum in those days!  He spends several years to develop just the right formula and the 5 Cent Candy bar was born.  That little piece of heaven endured the depression.   It was a piece of comfort that was sent to soldiers during the war.  And then it morphed into many other things:  Reese’s Peanut Butter Cups (my personal favorite), Mr. Goodbar, Whoppers, York Peppermint Patties and the beloved Hershey’s Kiss.  Who doesn’t love a Hershey’s Kiss!?  Doesn’t just the thought of it make you smile!?

So that’s part one of this story.  Taking something seemingly luxurious to the masses was very creative and kind of sexy.  After all, everyone wants something luxurious.  Diversification and expansion can happen within a specific product category. You just have to think about it differently; as Hershey did.  This one single idea birthed an entirely new business in this country and later spurred off to create a new company in the UK called “Cadbury” and “Mars” here in the US.  More followed suit as you can clearly see.

Now here comes something really interesting that happened along the way.  In 1985 an up and coming film Director approaches the Mars Company, who is the maker of M&M’s, and asks if they could use their product in his film.  The Mars Company declines.  That Director then goes to Hershey’s and asks them if they can use their similar, yet different product, Reese’s Pieces, as a product placement.  Hershey’s agrees.

What happened next?

Reeses Pieces becomes the food of choice for the alien in Steven Spielberg’s mega hit movie ET. As for Hershey’s, that product placement boosted sales by 65%. SIXTY FIVE PERCENT people!  I’ll say it one more time – SIXTY FIVE PERCENT.  The birth of product placements as a viable marketing tool was born and spurred a whole new stream of income for movie makers, TV shows and other forms of entertainment beyond the maker of the featured product.

The point is this:  stepping outside the box works!

  • Taking a calculated risk is necessary in achieving success - both internally and externally.
  • Looking at opportunities that may be a little off the wall just may bring a tsunami of profits
  • Never underestimate peoples desire to connect with a product or service that brings JOY, SMILES & HAPPINESS or makes them feel a little more elite and pampered!
  • Trust your instincts when an idea pops up!

My parting questions to you are:

  • What opportunities are you over looking to shift your products and services?
  • Why are you over looking them?
  • Wouldn’t you like a 65% jump in YOUR profits?
  • And finally……what’s it gonna take for you to get out of your way? Success is really only one left turn away!

Now, I’m off to eat some chocolate!
No, I don’t share! : D

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3 Responses to “How the 5-Cent Candy Bar Revolutionized an Industry: The Story of Milton Hershey”

  1. Dare To Be Different at It’s A Mompreneur’s Life Says:

    […] brings me to a great blog post about diversity and business. How many businesses fail because they didn’t diversify or dare […]

  2. Patrick Says:

    Wonderful story!

  3. mariagamb Says:

    Thank you both!
    Hershey was a humanitarian as well. Truly an excellent example of not only an innovative spirit but a powerful leader!

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