After completing an apprenticeship to a confectioner in 1876, Milton Snavely Hershey founded a candy shop in Philadelphia, which failed six years later. After trying unsuccessfully to manufacture candy in New York, Hershey returned to Pennsylvania, where he founded the Lancaster Caramel Company, whose use of fresh milk in caramels proved successful. In 1900, Hershey sold his caramel company for $1,000,000 ($22,155,604 in today's currency) and began to concentrate on chocolate manufacturing. In 1903, Hershey began construction of a chocolate plant in what became Hershey, Pennsylvania. The milk chocolate bars manufactured at this plant proved successful, and the company grew rapidly thereafter.

In 1907 Hershey introduced the small flat bottomed conical shaped pieces of chocolate which Mr. Hershey would name "Hershey's Kisses." While initially they were individually wrapped by hand with squares of foil, in 1921 machine wrapping was introduced and added the small paper ribbon to the top of the package indicating that it was a genuine Hershey product. The product was trademarked 3 years later and went on to become one of the most successful and well known products ever produced by the company. Other products introduced include MR. Goodbar (1925), Hershey's Syrup (1926), chocolate chips (1928), and the Krackel bar (1938). Today, most of Hershey's chocolate products are not made using traditional European recipes, but instead use less cocoa and a higher incorporation of sugar. Though still highly popular, they are not as popular in France, Germany, or other countries with a strong chocolate tradition. Since 1988, Hershey's acquired the rights to manufacture and distribute many Cadbury-branded products in the United States. The Cadbury creme eggs sold in the U.S., however, are imported by Hershey directly from Cadbury in the U.K.

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