You’ve probably heard the old commercials: "You got your chocolate in my peanut butter!" It’s a classic trope, but the real story of the H.B. Reese Candy Company isn't some marketing fluke. Honestly, it’s a story of a guy who had sixteen kids, lost his job a bunch of times, and basically invented a billion-dollar empire in his basement because he was desperate to pay the bills.
Harry Burnett Reese wasn't a corporate shark. He was a dairy farmer from York County, Pennsylvania. He spent years bouncing around from fish hatcheries to factory floors, just trying to keep his massive family afloat. If you think your house is crowded, imagine 16 children. Yeah, 16. That kind of pressure either breaks you or makes you incredibly creative. For Reese, it meant he started tinkering with candy recipes in his kitchen at night after working 10-hour shifts.
From Dairy Cow to Candy King
Before there was a candy company, there was a man working for Milton Hershey. This part is kinda ironic. Reese actually moved to Hershey, PA, in 1917 to manage one of Milton’s dairy farms. He was good at it, too. He even ran an "experimental" round barn for Hershey. But when the farm closed down a few years later, Reese was out of a job.
He didn't give up on the town, though. He took a job in the shipping department of the Hershey chocolate factory, but the entrepreneurial itch was already there. He started the R&R Candy Company in 1919 (which bombed) and then the Superior Chocolate and Confectionery Company (which also bombed). It’s easy to forget that the H.B. Reese Candy Company we know today was actually his third attempt. Failure was basically his first business partner.
By 1923, he was back in his basement at 18 E. Areba Avenue. He was making "assorted" candies—things like chocolate-covered dates, raisins, and mints. He used Hershey’s chocolate for the coating because, well, he worked there and knew it was the best. He even had a deal where he'd buy his chocolate exclusively from Milton Hershey.
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The Invention That Changed Everything (Sort Of)
It wasn't until 1928 that the first Reese's Peanut Butter Cup appeared. But here’s the kicker: it wasn't even its own product at first. It was just one piece in a five-pound box of assorted candies. People would buy these big boxes and start complaining because they only wanted the peanut butter ones.
Eventually, Reese got the hint.
The secret wasn't just the chocolate. It was the "peanut butter plug." Reese’s peanut butter isn't like the creamy stuff you put on toast. He roasted the peanuts so long they were almost burnt, which gave them that salty, gritty, unique flavor. He also realized that by using a paper cup instead of a traditional mold, he could mass-produce them faster.
The World War II Pivot
When World War II hit, the H.B. Reese Candy Company faced a massive crisis. Sugar was rationed. Tin was rationed. Most candy companies were going under. Reese looked at his books and saw that while he had dozens of products, the peanut butter cups were the only thing keeping the lights on.
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He made a gut-wrenching decision. He killed off every other product he made—the Lizzie Bar (named after his daughter), the Johnny Bar (named after his son), the mints, the raisins—everything. He bet the entire farm on the peanut butter cup because it used less sugar than the other bars and peanuts were still relatively easy to get.
It was a masterstroke. By the time the war ended, the Reese's Peanut Butter Cup wasn't just a candy; it was a household name.
The 1963 Merger: What Most People Get Wrong
A lot of people think Milton Hershey and H.B. Reese were bitter rivals. Honestly? It was the opposite. They were friends. Reese always called his boss "Mr. Hershey," and he refused to make his own chocolate because he respected Hershey’s product so much.
H.B. Reese died in 1956, just before his 77th birthday. He never got to see his company become a global titan. His six sons took over, and in 1963, they decided to sell the company back to the Hershey Chocolate Corporation.
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The price? $23.5 million.
That sounds like a lot, but they didn't just take the cash. They took Hershey stock. Today, that 5% share of Hershey is worth billions. It’s widely considered one of the smartest "tax-free" mergers in business history. Even though Hershey owns the brand now, the H.B. Reese Candy Company actually still exists as a legal subsidiary. If you look at the back of a Reese’s package today, it still says "H.B. Reese Candy Co." on the fine print.
Why It Still Works
Why do we still care about a candy company started in a basement 100 years ago? Basically, because they haven't messed with the formula too much.
- The Texture: That slightly gritty, salty center is still there.
- The Ratios: Fans are weirdly obsessed with the chocolate-to-peanut-butter ratio. That's why the "Seasonal Shapes" (the pumpkins, eggs, and trees) are so popular—they have more peanut butter and no ridged edge.
- The Brand: They’ve leaned into the "No Wrong Way to Eat a Reese's" vibe, which turns customers into advocates.
Actionable Insights for the Modern Entrepreneur
If you're looking at the H.B. Reese Candy Company as a case study, here’s what you should take away:
- Iterate until it sticks. Reese failed twice before he hit the jackpot. His "overnight success" took nearly a decade of basement experimentation.
- Kill your darlings. If Reese hadn't cut his other product lines during the war, the company likely would have folded. Focus on the one thing people actually love.
- Strategic Partnerships. By using Hershey’s chocolate, Reese didn't have to build his own refinery. He used someone else’s infrastructure to build his own brand.
Next time you unwrap one of those orange packages, remember it started with a guy who just needed to feed a lot of kids and wasn't afraid to burn some peanuts to do it.
Check the back of your next candy bar—you'll see the H.B. Reese name is still right there, 100 years later.