On December 2, 1952, U.S. Patent No. 2,620,061 issued to Oskar Uxa, on a Pocket Article Dispensing Container — the PEZ dispenser:

The PEZ dispenser started out as a way to dispense peppermints to help people quit smoking and freshen their breath. In fact, the name PEZ comes from the first, middle, and last letter of pfefferminz, the German word for peppermint.

Quitting smoking wasn’t quite a thing in the early ’50’s, so the company quickly pivoted to fruit flavors and began marketing the former mints as candy for children. The design of the dispenser evolved from a full body Santa, to a candy dispensing gun, to the iconic character head on top of the original dispenser.

The first design popular character designs were Popeye, Casper, and Bozo the Clown.