The Best Idea Yet: Reese’s PB Cups – From Frog Salesman to Candy Mogul | Episode 14 Summary

Hosts: Nick Martell & Jack Crivici-Kramer
Release Date: January 14, 2025
Podcast: The Best Idea Yet by Wondery

Introduction to Reese’s Legacy

In Episode 14 of The Best Idea Yet, hosts Nick Martell and Jack Crivici-Kramer delve into the fascinating origin story of Reese’s Peanut Butter Cups, exploring how HB Reese transformed from a struggling salesman into a legendary figure in the confectionery world. The episode not only narrates the creation of one of America’s favorite candies but also highlights the innovative strategies and bold risks that fueled its viral success.

Milton Hershey and the World’s Fair Inspiration ([04:19] - [06:40])

The story begins at the 1893 Chicago World Exposition, a pivotal event that showcased groundbreaking innovations, including Milton Hershey’s impressive chocolate temple. Witnessing this monumental display inspired Hershey to pivot his caramel-focused business toward chocolate. Recognizing the complexities of chocolate production in the 1800s—where grinding cocoa beans and achieving the perfect texture required grueling manual labor—Hershey saw an opportunity. “[Milton Hershey] thinks that maybe caramel is passe, maybe taffy is too old, and maybe vanilla is vanada. Maybe the future is really chocolate,” reflects Nick Martell ([05:49]).

To streamline his chocolate production, Hershey adopted newly demonstrated machinery from the fair, which significantly reduced production time and ensured consistent quality. This technological leap, combined with strategic vertical integration—owning his dairy farms and sugar plantations—allowed Hershey to dominate the chocolate market.

HB Reese’s Early Struggles and Joining Hershey’s ([09:22] - [13:35])

Amid Hershey’s burgeoning success, a man named Harry Burnett Reese (HB Reese) faced relentless personal and professional challenges. Living in New Freedom, Pennsylvania, HB juggled numerous odd jobs—from farming frogs to managing fisheries—to support his large family of thirteen. In a moment of desperation, HB responded to a job posting from Hershey’s, setting him on a path that would intertwine his fate with Hershey’s empire.

Upon his arrival in Hershey, HB secured a position managing the experimental Round Barn dairy farm. His dedication impressed Milton Hershey, fostering a strong mentor-mentee relationship. “[HB Reese] reminds Milton of himself. He had his own fair share of failures before he founded the Hershey company,” Jack Crivici-Kramer explains ([14:10]).

Despite initial setbacks—culminating in the closure of the Round Barn due to unreliable milking machines—HB’s resilience led him to launch his own candy venture, the R & R Candy Company. However, financial strains during the Great Depression forced HB to abandon this first entrepreneurial attempt, pushing him back into multiple jobs to sustain his family.

The Creation of Reese’s Peanut Butter Cups ([15:35] - [27:46])

Refusing to succumb to adversity, HB Reese rejoined Hershey, working in the shipping department. Here, he received Milton Hershey’s blessing to start a side hustle: making and selling candy using Hershey’s chocolate, provided HB sourced the ingredients directly from Hershey. This partnership was mutually beneficial, as HB could innovate while Hershey’s maintained a steady chocolate supply.

HB’s experimentation led to the birth of Reese’s Peanut Butter Cups. Initially, his attempts to blend peanut butter with chocolate resulted in inconsistent shapes and flavors. However, inspired by Hershey’s success with chocolate bars, HB realized that using cup molds could standardize production and enhance scalability. “[HB] takes a page or two out of Milton Hershey’s book,” Nick remarks ([26:18]).

A pivotal moment occurred when malfunctioning roasting machines inadvertently burned the peanuts, creating a unique flavor profile. Rather than discarding the flawed batches, HB embraced the “happy accident,” perfecting the roasted peanut butter that would become synonymous with Reese’s. By September 1929, HB had honed his recipe, launching the first Reese’s Peanut Butter Cups amidst the onset of the Great Depression.

Overcoming the Great Depression and WWII ([31:17] - [36:44])

Releasing the Peanut Butter Cups during the Great Depression was a strategic gamble. Despite economic turmoil, the affordable $0.01 price point made them an attractive indulgence. “[Reese’s] the most popular... affordable splurge during this general economic gloom,” Jack notes ([31:25]).

As the nation grappled with unemployment and rationing during World War II, Hershey’s robust vertical integration—owning sugar plantations and securing military contracts—shielded it from supply chain disruptions. Conversely, Reese’s, reliant on market-driven peanut butter supplies, faced challenges. However, the lower sugar content in peanut butter cups became an unexpected advantage, allowing Reese’s to thrive even during rationing.

A turning point came when Milton Hershey personally stepped in to reestablish HB’s chocolate credit line, providing the necessary resources to sustain production. This act of mentorship cemented the bond between Hershey and Reese, propelling Reese’s into a period of significant growth.

Acquisition by Hershey’s and Legacy ([36:54] - [39:39])

By the mid-20th century, Reese’s had cemented its place in America’s confectionery landscape. Despite internal family conflicts among HB’s six sons managing the expanding business, the decision to sell to Hershey’s in 1963 proved transformative. For approximately $200 million (adjusted for inflation), Hershey acquired Reese’s, integrating it into their portfolio seamlessly. “[Reese’s] at one point, they're Hershey's best-selling product with more than 300 million cups sold that year,” highlights Nick ([38:57]).

This acquisition is hailed as one of the most successful in corporate history, with Reese’s outperforming many parent products and establishing itself as a cultural icon. The continued innovation and unwavering focus on quality ensured that Reese’s Peanut Butter Cups remained a beloved choice across generations.

Key Takeaways

1. Dynamic Sensory Contrast: The success of Reese’s lies in its perfect balance of contrasting flavors and textures—sweet chocolate paired with slightly salty peanut butter. As Jack explains, “The smooth sweet chocolate with the slightly crunchy, salty peanut butter... creates a tension that your taste buds love” ([31:09]).

2. Mentorship and Collaboration: Milton Hershey’s willingness to support and invest in HB Reese underscores the importance of strong mentorship and strategic partnerships in business success. Nick emphasizes, “The best bosses treat their employees leaving as a graduation... When you send an employee off to do great things, they may come back in a big way” ([42:02]).

3. Embracing Failure: HB Reese’s journey demonstrates that setbacks can lead to greater innovations. By embracing the accidental burning of peanuts, Reese created a unique product that defined his legacy.

4. Focus on a Hero Product: Drawing from Milton Hershey’s advice, HB initially diversified his product line but ultimately found unparalleled success by concentrating on perfecting the Peanut Butter Cup.

Additional Facts

• Reese’s Pieces and Popular Culture: Introduced in 1978, Reese’s Pieces saw a surge in sales following a $1 million product placement in the 1982 film E.T. the Extra-Terrestrial, resulting in revenue jumps of 65-85% ([42:54]).

• Volume of Sales: By 1969, six years post-acquisition, Reese’s had sold over 300 million cups, surpassing even Hershey’s original chocolate bar in popularity ([38:57]).

• Marketing Genius: HB Reese’s strategic packaging—offering two small cups per package—was a deliberate move to enhance customer perception of value without increasing costs. “He could have given you one large cup, but instead gave two smaller cups. Same cost, but better feeling” ([40:17]).

Conclusion

Reese’s Peanut Butter Cups epitomize the blend of innovation, resilience, and strategic partnership. From HB Reese’s humble beginnings and relentless pursuit of his dream to the iconic status of Reese’s today, this episode of The Best Idea Yet illuminates how bold ideas and perseverance can create lasting legacies. As Jack aptly puts it, “Reese’s Peanut Butter Cups are pretty universally loved. They’re still the number one most popular Halloween candy in the country” ([40:17]).

For those inspired by Reese’s story, the episode underscores the value of embracing contrasts, learning from failures, and fostering meaningful mentorships to achieve extraordinary success.

Notable Quotes:

• Nick Martell ([05:49]): “Maybe the future is really chocolate.”

• Jack Crivici-Kramer ([14:10]): “Milton stops by every couple weeks to check in with HB to admire the cows and to see how the dairy experiment is coming along.”

• Nick Martell ([31:09]): “The contrast of savory and sweet in the peanut butter cup tells a story.”

• Jack Crivici-Kramer ([42:02]): “When you send an employee off to do great things, they may come back in a big way.”

• Jack Crivici-Kramer ([40:17]): “He could have given you one large cup, but instead gave two smaller cups. Same cost, but better feeling.”

Stay Tuned:
In the next episode, Nick and Jack explore the fascinating history of the Fender Stratocaster and its impact on rock and roll. Subscribe to The Best Idea Yet on the Wondery App, Apple Podcasts, Spotify, or wherever you get your podcasts to continue uncovering the untold stories of the products you love.