Lancaster Caramel Company

History

The business was first located in a warehouse on the west side of South Duke Street near Vine Street. However, the facilities lacked a boiler to cook the caramels and Hershey soon moved to an old factory building on Church Street that had once housed the Edison Electric Plant. The early months were a struggle, but a British candy importer placed a large order and the cashier at the Lancaster County National Bank backed a loan, enabling Hershey to purchase supplies. As the business began to grow, Hershey expanded into other parts of the factory building. By 1894 the Lancaster Caramel Company employed approximately 1300 workers.

In 1891 Hershey acquired three lots and a small factory in Mount Joy, Pennsylvania and the new factory soon began caramel production. In 1892, Lancaster Caramel Company expanded, opening a western branch in Chicago, which later moved to Bloomington, Illinois. The Bloomington factory operated until 1900 when it was sold to the Paul F. Beich Company. Shortly after establishing the Western Branch, Hershey set up a third caramel factory in Reading, Pennsylvania.

The Lancaster Caramel Company was incorporated on February 8, 1894 and the Hershey Chocolate Company was formally organized as a subsidiary. In the Spring of 1900, believing caramels were a fad, Milton Hershey sold the assets of the caramel business including the factory, the machinery, the confectionery formulas, stock on hand and the Crystal A trademark for $1 million in cash to the American Caramel Company. Hershey kept the Hershey Chocolate Company subsidiary plus the chocolate making equipment because he felt that there was a larger market for chocolate confections.