Thursday, February 25, 2010
Hershey traced its roots to Lancaster Caramel Company, founded in 1886 by Milton S. Hershey. A subsidiary, Hershey Chocolate Company, opened in 1894. Milton Hershey retained the chocolate business when he sold the caramel operation for $1 million in 1900. He used the money to open what would become the largest chocolate factory in the world. He also founded a utopian community named Hershey, Pennsylvania, for the company’s workers, and he established an orphanage and ensured that it would continue to receive a large percentage of the firm’s profits after his death. By the 1990s the company was called Hershey Foods. It manufactured ice cream toppings, chocolate syrup, chocolate chips and other baking products, milk products, and various brands of pasta. The company led the U.S. candy industry with brands such as Hershey’s milk chocolate bars, Hershey’s Kisses, Hershey’s Nuggets, Kit Kat chocolate bars, Cookies ’n’ Creme white chocolate bars with cookie bits, York Peppermint Patties, and Twizzlers licorice. In 1996 Hershey also acquired Leaf North America, which made Jolly Rancher, Milk Duds, Whoppers, and PayDay candies. In 1998 Reese’s was the largest and most popular of Hershey’s brands and was valued at $350 million, according to Advertising Age.
Reese’s Peanut Butter Cups were launched in 1928 by Harry Burnett Reese, the founder of H.B. Reese Candy Company. Hershey acquired the firm for $23.5 million in 1963 and began marketing Reese’s Peanut Butter Cups nationally. The product consisted of specially processed peanut butter in a disk-shaped, milk chocolate shell with fluted edges. It was packaged in bright orange wrappers that contained two peanut butter cups. The first line extension, Reese’s Crunchy Peanut Butter Cups, was launched in 1976. Other line extensions introduced over the years included small candies called Reese’s Pieces, peanut butter Easter eggs and Christmas trees, peanut butter baking bits, peanut butter in a jar, peanut butter ice cream, and peanut butter puffs cereal. According to Brandweek, Hershey’s total advertising budget for all its Reese’s products was $33 million in 1997, up from $22.6 million in 1996.
From 1969 to 1988 Reese’s Peanut Butter Cups were promoted with the tag line, ‘‘Two great tastes that taste great together.’’ In 1988, after market research showed that consumers had developed individual, ritualistic ways of eating Reese’s Peanut Butter Cups, the company launched a humorous campaign called ‘‘There’s No Wrong Way to Eat a Reese’s’’ that was still running in 1999. The new ads highlighted the candy’s unique qualities and the many eccentric ways it could be eaten. One magazine advertisement that ran in 1998 showed two miniature peanut butter cups above two captions that both said, ‘‘‘I eat them just like my brother.’’’ A second line of text explained, ‘‘(Don and Dan, identical twins.)’’
In 1995 Hershey supported its recently introduced Reese’s Nutrageous candy bar—a crunchy combination of chocolate and peanuts—with a $9.5 million advertising campaign. In 1997 the company spent an estimated $10 million to launch another line extension, Reese’s Crunchy Cookie Cups, which contained peanut butter, milk chocolate, and a chocolate cookie. The promotion included the distribution of 50 million coupons and 8 million free samples of the product. Later in the year Hershey began selling ReeseSticks wafer bars in limited markets. The ‘‘The Crisp You Can’t Resist!’’ campaign was launched early in 1998 to support the national introduction of ReeseSticks.