Jelly Bean Giant

It's easily the most well-known jelly bean, thanks in part to President Ronald Reagan, but the Jelly Belly Candy Co., despite its lasting success, is just coming into its own in merchandising."For 20 years, we were developing different displays at different times with slightly different styles and functions, and then three to four years ago we realized that we had kind of a hodgepodge of displays, and some were more effective than others," says Pete Healy, vice president of marketing, who has worked for the company for 12 years.President and Chief Operating Officer Bob Simpson concurs, saying that two distinct points seeded a resurgence in Jelly Belly retailing. One, he realized that the brand deserved better treatment in-store. Two, Jelly Belly retailers were telling the company to "provide merchandising solutions," not only to continue to bombard them with new items."Those two things converged: We weren't very good at what we were doing, and then there was a need. That's when we went into serious retooling and making a firm commitment to a new merchandising strategy," Simpson says.Simpson, who trudged with Healy through those early years of merchandising, found help with the addition of Kathy Hemphill, merchandising and promotions manager for Jelly Belly. A member of the company for roughly two years now, Hemphill took the reins and Jelly Belly has a new focus on merchandising. "I really believe this is going to be the year of the display for us," she says. "We're monitoring our inventories and it's really taking off."Last year, the company came out of the gate with a classic-looking floor display dubbed the "wave display," a 68-inch tall, curvy metal unit that holds 252, 31/2 ounce bags of jelly beans. The display went to all channels: drug, mass, specialty, department stores, Ace Hardware, record stores, sporting goods stores, everywhere. It's the flagship piece for the brand and has set the tone for all of its latest merchandising that rolled out this summer from power wings to massive in-line and freestanding, full-blown candy centers.Simpson says the department knew it had to build off the success of that first display, not rush into a candy center. "We told Kathy the moment she walked in here, the temptation will be great. Resist the temptation, be practical in your approach and let's do the first one right in every possible way." The wave display exceeded sales goals, and continues to refill orders.The Reagan Connection A brief history on the company reveals that a happy accident -- becoming President Reagan's favorite candy -- helped skyrocket the company to success.Jelly Belly is a fifth generation, family-owned business that originally began in 1869 in Belleville, IL, by Gustav Goelitz. A telephone call from an entrepreneur in Los Angeles brought Goelitz Confections to California to make jelly beans using fruit purees and juice concentrates, and in 1976 the Jelly Belly bean was born.Today, based in Fairfield, CA, with a second distribution center in Chicago, the Jelly Belly Candy Co. boasts 645 total employees and a headquarters with the top-rated factory tour in America, according to Reader's Digest.But back in 1976, Goelitz Confections was still virtually unknown until, as Simpson says, a friend of the company had a cocktail party conversation with Reagan, and led him to Jelly Belly. Reagan was trying to quit smoking a pipe through his penchant for jelly beans. He termed out as Governor of California and became president in 1980, and immediately used red, white and blue jelly beans as a gift to those attending his inauguration (consequently, that's how the Jelly Belly blueberry flavor was created). For the next eight years, Reagan used Jelly Belly beans as gifts to guests of the White House, and set bowls of beans in meetings and at state parties.Simpson notes it was prohibited for any company supplying product to the White House to benefit in any way through marketing. "They put the fear of God into you," Simpson jokes. The CEO of Goelitz Confections, Herman Goelitz Rowland, who remains CEO, had to keep quiet, despite news crews calling to find out about the jelly beans in Reagan's office. Eventually, with White House permission, Herman spoke and stories ran on Jelly Belly's association with Reagan."We were already 20 weeks behind on orders, and as a result of the story and it becoming the president's favorite candy, we went up to 72 weeks behind in a matter of a month," Simpson says. Hemphill adds, "If you filled out an order, it would be a year and a half before you got any.""Certainly no brand has ever had that kind of launch. This isn't in the marketing books on how to launch a brand, 'get your president behind the brand,'" Simpson laughs. "We had one of the most, pure accidental things happen. You can't buy this."While Reagan was in office, Simpson says the brand scored multiple moments of political product placement. He cites one example, when The Challenger went to space and Sally Ride was on board. On television, audiences could see live pictures from inside the cabin, and then President Reagan announced that there was a gift on board. The crew opened up a box and there were Jelly Belly beans floating around on live television.True to Life FlavorsWith the overnight success of the brand, a new challenge arose to maintain the quality of the brand. "What started out as a novelty -- the president's favorite candy -- created trial," says Simpson. Jelly Belly says it maintains its following through real flavors. Many of its ad campaigns are centered on flavor including one titled, "True to Life Flavors," and another, "It Tastes Like a Jelly Belly."It takes seven to 10 days to make one jelly bean. "Our competition would probably take one or two days," says Simpson. The jelly bean goes through a staged process, requiring the bean to rest and contain enough moisture content to be ready for its next stage.The most successful flavors are ones with a unique taste, such as buttered popcorn or cotton candy. There are 50 total flavors with more being tested (currently on trial are apricot, buttered toast and roasted garlic.)When launching a new flavor, the company has a "tasting." Top management and employees gather and submit opinions, and a bean isn't ready until they all confirm the taste hits the mark. Choosing what jelly bean to make is difficult, too, as each flavor has to be unique."We can make a spaghetti flavor, but people have a personal connection to how your mom makes spaghetti or what not," says Simpson. "But if you say, Franco-American SpaghettiO's, we can knock that off."It's about instant recognition of flavor, he says. "When you bite it and chew it, for a split-second, when that flavor is released, it has to be recognized instantly," he says.Oddly enough, Simpson could be talking about P-O-P, hearkening back to the popular notion that a display has only seconds to grab a consumer's attention.Consistency, ModularityWith its P-O-P, Jelly Belly aims for a consistent look. There is no set audience; the brand appeals to ages "4 to 94." The merchandising isn't targeted toward an edgy teen, it gravitates to a classic, American look each time."That's our objective, to give a consistent message to the minds of the consumers because they run into these displays in different classes of trade," Simpson says. Its latest displays, which launched in the summer, use 3-D jelly bean lug-ons that scream branding. The beans mimic the variety of colors of the jelly beans. The displays also use quality materials like metal, wood and wire to convey a premium look.The permanent materials may be pricey, but it's important, Simpson says. "We don't cut corners manufacturing. There are no short cuts. Otherwise, we can engineer ourselves right out of a brand," he says. "So I think the materials we use speak volumes about who we are and what the brand is." There is no better example of quality than Jelly Belly's modular candy centers. Built to go in-line, at the end of an aisle as an endcap, or as a freestanding display, the full service units are large, in-store candy shops. The units carry bulk candy, pegged packaged candy, boxed candy or tins, and any combination of the above. The centers have storage areas, brochure and information holders, aisle violators, and leverage graphics of the colorful beans and the Mr. Jelly Belly character. Retailers are allowed to choose how they'd like to merchandise the units; part package, part bulk, and in different presentations."The brand is a myriad of things, and we wanted to show that off in one display," says Hemphill. The display was designed and built to last for a long time. If a retailer no longer wants the display, Jelly Belly's retail services department will pick up the display, refurbish it and use it elsewhere. That department already services and restocks displays once a week minimally for food stores, drugstores and mass merchants.Covering all Channels The line of candy centers also completed Jelly Belly's goal to have displays for every channel. With its modular components, and ability to change its product mix, the all-in-one candy shops fit most store settings. The signature wave display does roll out to all environments.However, some channels such as department stores may call for a more elegant looking display. Jelly Belly created its "hutch" display, which has a "gourmet" candy look with gold-painted metal and carries gift packages. The display carries more than Jelly Belly beans so the header says "From the Makers of Jelly Belly" to leverage its name. Jelly Belly makes more than 100 other products that used to fall under Goelitz Confections, but now is signaled by "From the Makers of Jelly Belly."Jelly Belly also has a large global audience, which Hemphill must consider. The candy is sold in more than 20 countries and the United States. Simpson says the international market is growing at a faster pace than any other segment.Other new Jelly Belly display options are a carousel rack, countertop spinner rack, power wings and a cooler rack, all of which are influenced by the look of the wave display."As displays were being developed," Hemphill says, "everyone [in sales] was so hungry for them." She said the biggest challenge when she first got to Jelly Belly was to satisfy that need, and provide merchandisers for every channel of trade and make them multipurpose."There were some internal challenges to convince people that there was a better way, too," Simpson says. "That things could be simpler, and better." The marketing department at Jelly Belly is roughly 20 people. The company does as much in-house as it can, including creative services.Jelly Belly does very little television marketing, and does hire an agency to help with that, but all print applications, online ads and outdoor ads are in-house. Included in that are the sales cars, distribution trucks and racing cars wrapped in Jelly Belly branding.The Vendor ProcessEarly on, when Hemphill began working on the P-O-P, she sat down with the different departments covering specific channels and found out what footprint she was working with and what type of product was purchased there and then would write a detailed project brief, complete with specs, for her list of vendors. She would also ship them packaging samples. The vendors then would build concept renderings for her team to review. Eventually as the concept boards came in, Hemphill said SMP Display & Design Group, Chattanooga, TN, continued to hit home run after home run. "No one could hold a candle to them." After about three or four different projects, SMP pretty much earned its place as Jelly Belly's exclusive vendor, Hemphill says."They have been here and worked directly with all of us," Simpson says. "It's a very hands-on relationship that we have with them." Hemphill says SMP has been able to integrate graphic production with structural design."When SMP came back with the 'wave,' it was obvious at a glance that they looked at our packaging, looked at our website, and really got the style and the personality of the product," Healy says. "When the renderings came in, it was like having a Porsche in front of you, when you were used to an old Studebaker."As an old hand in the early Jelly Belly display days, Healy can appreciate the steps the company has taken. "I think for most of us as shoppers, whether we realize it or not, when we see a display that captures those intangibles, that personality and reflects that in the very structure of the display, something's happening there, something resonates."With the new merchandising, Healy says there is room to branch into some areas that may have been lacking, such as seasonal promotions and sweepstakes. He says the new displays are more versatile, with the ability to switch out graphics and side panels. This flexibility will allow their team to focus on seasons such as Easter, which is the number one jelly bean season, with Christmas a close second. Healy says they have done a modest amount of seasonal advertising with new labels for bulk bins during Valentine's Day, or Easter and others."Also, keep in mind, we consider ourselves to be first, an everyday selling product, and secondly a seasonal product," Simpson adds, which is important because there was a time when jelly beans were strictly a seasonal product for Easter.Healy says the new display may also open a better opportunity to create larger, integrated campaigns. "We've really been building our overall marketing effort the last year," he says. "We're still in an early phase, but as we build our efforts, and our people, bringing Kathy and others on board, we're in the best position we've ever been in to do more of that."

Jelly Bean Giant

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