You know that scene. The one where a terrified but curious Elliott drops a trail of orange, yellow, and brown candies to lure a wrinkly brown alien out of the tool shed. It’s iconic. It’s basically the DNA of 80s nostalgia. But honestly, the E.T. movie Reese's Pieces partnership wasn't just a cute cinematic moment; it was a desperate, last-minute gamble that fundamentally changed how movies make money.
Before 1982, product placement was kinda the Wild West. Most brands didn't really get it. They thought seeing their logo on screen for three seconds was a nice "extra," but they didn't realize it could literally save a failing product line. Reese’s Pieces were struggling back then. Seriously. They’d only been on the market for about five years, and they were lagging way behind M&Ms. Then Steven Spielberg called, and everything flipped.
The M&Ms Rejection That Cost Millions
Here is the part that still makes marketing executives wake up in a cold sweat. Spielberg didn't actually want Reese's Pieces at first. He wanted M&Ms. It made sense. M&Ms were the king of the mountain.
Mars, Inc. was approached by the production team with a simple request: let us use your candy in the film. Now, legends vary on exactly why Mars said no. Some say they thought the alien was too ugly and would scare kids away from their candy. Others claim they just didn't want to pay the licensing fee or didn't trust the script. Whatever the reason, they passed. It is widely considered one of the biggest blunders in corporate history.
Imagine being the guy who said "no" to the highest-grossing film of the decade. Ouch.
When Mars bailed, Universal Studios reached out to Hershey. Jack Dowd, who was the VP of New Product Development at Hershey at the time, didn't even see a full script. He just knew Steven Spielberg was involved. That was enough. Hershey agreed to spend $1 million on advertising to promote the film in exchange for the E.T. movie Reese's Pieces placement. No money actually changed hands for the placement itself—it was a pure "you scratch my back, I'll scratch yours" trade-off.
The Explosion: What Happened After the Premiere
The movie came out in June 1982. It was a juggernaut. People weren't just watching the movie; they were living it. They wanted to do what Elliott did. They wanted to feed the alien.
Within two weeks of the film's release, sales of Reese’s Pieces skyrocketed. We aren't talking about a 5% bump. We are talking about a 65% to 85% increase in sales depending on which regional distributor you ask from that era. Some theaters actually ran out of the candy because kids were buying bags just to hold them while they watched the "trail" scene.
It was a phenomenon.
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Hershey didn't just sit back and watch, either. They leaned in hard. They ran "E.T. Earth’s Favorite Candy" displays in grocery stores across the country. It was the first time a brand and a blockbuster film moved in such perfect lockstep. If you were a kid in '82, you didn't just eat Reese's Pieces; you ate "E.T. candy."
Why the Placement Felt Different
Product placement usually feels gross. It’s a character holding a soda can with the label perfectly facing the camera, or a slow-motion shot of a car logo. It takes you out of the story.
But the E.T. movie Reese's Pieces scene felt... real.
Elliott used the candy as a tool. It was a bridge between two worlds. Because the candy was integral to the plot—literally the mechanism for communication and trust—it didn't feel like an ad. It felt like a character trait. That is the "Holy Grail" of marketing. When a product becomes a plot point, the audience doesn't build up a wall against it. They embrace it.
The Ripple Effect on Hollywood
Before this, movie tie-ins were mostly about toys and lunchboxes. After E.T., every brand on the planet wanted their "Reese’s moment."
Suddenly, scripts were being written with specific brands in mind. Think about Back to the Future and Pepsi, or Cast Away and FedEx. These aren't accidents. They are the direct descendants of Jack Dowd’s gamble with Hershey. It created a multibillion-dollar industry where brands compete to be the "hero" item in a blockbuster.
It also changed how Hershey approached their business. They realized that their candy wasn't just food; it was pop culture. It gave them the leverage to expand the Reese's brand into the powerhouse it is today. Without that alien in the shed, Reese's might have stayed in the shadow of the peanut butter cup forever.
The Technicality of the "Trial"
Let's get into the weeds for a second. The way the scene was shot matters. Spielberg is a master of visual storytelling, and he used the high contrast of the orange and yellow candy against the dark, shadowy forest floor to guide the viewer’s eye.
- The colors popped on 35mm film.
- The sound of the "clink" as they hit the ground was foleyed to be distinct.
- The repetition of the action—drop, wait, move—built a pavlovian response in the audience.
By the time the movie was over, your brain had associated that specific color palette with the emotional high of a boy making a new friend. It’s genius, honestly. It’s psychological conditioning disguised as a family movie.
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Common Misconceptions About the Deal
People often think Hershey paid millions to be in the movie. They didn't. As mentioned, it was a promotional tie-in. Hershey spent their money on the marketing of the movie, which in turn marketed their candy. It was a closed loop of profit.
Another myth is that the candy was always supposed to be Reese's Pieces in the book. Nope. In the original treatment and the early stages of production, the "bait" wasn't even specified as a brand; it was just "sweets." The specificity came only when the business deal was inked.
Actionable Takeaways for the Modern Era
If you're looking at this story and wondering what it means for today, the lessons are surprisingly fresh. Even in a world of TikTok ads and influencer marketing, the E.T. movie Reese's Pieces case study proves a few timeless points.
Authenticity beats visibility. If your product doesn't fit the "story" of the person using it, people will sniff out the BS immediately. Reese’s Pieces worked because a lonely kid in the suburbs would actually have those in his pocket.
Risk is required for massive rewards. Mars played it safe. They protected their "prestige" brand and lost out on the cultural moment of the century. Hershey took a risk on a "weird alien movie" and won big. In marketing, the "safe" choice is often the most expensive one in the long run.
Integration over interruption. Don't just show the product; make the product do something. If you can solve a problem for the character using the product, the audience will remember it.
The next time you see a bag of those orange, yellow, and brown candies, remember that you're looking at a piece of business history. It’s the snack that saved Hershey’s bottom line and taught Hollywood how to sell us stuff without us even realizing it was happening.
To apply these insights, start by auditing how your own brand or project integrates into the "stories" of your customers. Are you an interruption, or are you the trail of candy leading them to something great? Look for "unconventional" partnerships that align with your core audience's emotions rather than just their demographics. Sometimes the "ugly alien" project is exactly where you belong.