- Here are all the things you wanted to know about where your favorite chocolate comes from.
If you haven’t read The History of Chocolate: Part One, click on the link. Otherwise. if you’re ready, this is part two.
Peanut Butter
Reece sold dozens of different products but not enough to make a name for himself or to support his family.
His break through came when he started experimenting with peanut butter, a cheap nut butter. In the 1920s, nut butters aren’t as popular. This makes peanut butter new to the scene.
Aztec and Inca cultures used paste made of peanuts and it was patented in 1884. Originally peanut butter was used as a health food/medicine and a high protein option for people who couldn’t eat meat.
In the 1920s most peanut butter was still made by hand and in small batches.
Reece starts experimenting with it and hoped peanut butter would work as an ingredient in his candy. He worked around the clock to figure it out.
He tried making the candies by hand but they were sloppy
and didn’t work right. Reece put it into a confectionary cup, layered chocolate, added the peanut butter and put another layer of the chocolate on top.
Before this, there was no Reece’s peanut butter cup. Ever since, there has been. This is the history of chocolate and the most popular chocolate, all in one fact.
One day it would generate 2 billion in annual sales and popularize chocolate and peanut butter across the world.
In Chicago in the 1920s, the demand for Babe Ruth was soaring and they were closing in on Hershey sales.
No more Babe Ruth bar?
Babe Ruth wanted his name back, so to fight back, he came out with his own candy bar, the Homerun Bar. He launched an attack at Schnering and in turn, Schnering sues Babe Ruth. He is served with a cease and desist order to stop producing the candy bar with his own name on it.
Reece’s Peanut Butter Cup or Bust
Back in PA, Reece drops everything else out of his product line but the peanut butter cups. And to keep up with high demand, he takes out loans to open a factory. He has industrial peanut roasters to make his signature ingredient.
He created his own peanut butter.
Accidently over roasted peanuts happened accidently and a worker came to him and said that the batches were coming out burnt and the ovens needed to be recalibrated. But Reece kept the recipe and ovens just as they were as the “over roasted” peanuts created a unique, granular, toasted, almost smoky flavor. To think it all began with “an accident”
Schnering was in battle with Babe Ruth for months and the verdict was in. He had won. He told people name was after Grover Cleveland’s daughter who passed at age 12 from diphtheria. However, everyone who knew him and worked for him knew the truth, the real story, that it was named after the Babe Ruth.
Schnering puts everything he has into a rapid expansion wanting to become the biggest candy company in the nation. He was profitable but money went back into the business.
On October 28, 1929, it all came crashing down.
Stock Market Crash Hurts Everyone
The stock market crashed and plummeted 25% in the following 3 days, setting off the great depression.
During this time, 25-50% of the population was unemployed. People didn’t trust the banks, credit, or others.
Schnering’s sales halt and aggressive expansion leaves him with a lot of debt. He was almost faced with being pushed out of the company and could have lost everything he built. He was running out of time to turn it around.
Back in Pennsylvania, Hershey lost 50% of sales and many smaller companies had shut down.
Reece sales were also in free fall and he too was sitting on piles of loans after the start of his business. So many unpaid loans caused a warrant for his arrest. He has no choice but to flee and leave town.
The Butterfinger
Schnering risks every penny he has to create a new candy bar with peanut butter crunch. He names it the Butterfinger and he needs it to be as big as the Babe Ruth.
In 1934, the former piano salesman places the Butterfinger in a movie, a smash hit with movie star Shirley Temple. He associates Butterfinger with the girl everyone already loves, Shirley Temple.
Sales surge to over $25 million dollars (equal to over $48 million today,) even in the midst of the depression.
Product placement was never done before this, he innovated for himself but innovated on a product scale that no one had ever seen before. This is more than just the history of chocolate.
Schnering is now poised to beat out Hershey.
Reece has a new loan to pay down his other debts and he returns home. He sells to people he knows has the money to spend, like Hershey’s own employees.
Hershey Backs Reece
Reece is seen for his talents and Hershey says he wants to back Reece, he likes his product that much. Hershey knows he needs Reece and his peanut butter cup to fight against the Baby Ruth and Butterfinger.
Reece is only to use Hershey chocolate in his cups and they strike a deal. The peanut butter cups sales take off.
Priced at only a penny a cup, they soon surpass Baby Ruth and Butterfinger in sales
Scherning changed not only the history of chocolate but the face of product marketing itslef. By the 1960s he was grossing $60 million a year in sales. (Almost $520 million today.)
By Reece’s death in 1956, his company is worth $13 million dollars, (equal to $125 million today.)
He would be shocked to know that even today, the cups make $2.5 billion every year.
Do you love that peanut butter and chocolate combination? Personally, Reece’s Pieces are a huge hit. Yum!
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