SCORE Minnesota

Jelly Belly Scores Sweet Success

November 28, 2009

In the 1960s, Herm Rowland and his parents owned the Herman Goelitz Candy Company, an Oakland, California candy manufacturing business founded by his grandfather. Despite its reputation for quality and a modest annual growth rate, the company yielded only a minimal profit.  A disappointing experience with a paid consultant had made the family leery of seeking outside help. However, all that changed when Herm read an article about SCORE in Readers’ Digest’s and their no-risk proposition of free counseling, Herm’s decision to give them a call “changed my life.”

That’s when the Herman Goelitz Candy Company evolved into the Jelly Belly Candy Company, maker of the world-famous, flavor-rich gourmet jelly beans that have delighted everyone from toddlers to adults, including President Ronald Reagan, for more than 30 years. Jelly Belly produces more than 34 million pounds of tasty treats annually, including more than 50 varieties of jelly beans ranging from bubble gum to kiwi.  With nearly 800,000 square feet of production facilities in its two U.S. factories, Jelly Belly also makes candy corn, chocolates, gummies, sour candies and other tasty confections.

Such staggering success seemed unimaginable when the Rowlands first began having lunchtime meetings at the family factory with a gentleman Herm remembers only as “Mr. McDaniel,” a SCORE counselor who had previously worked in operations and finance for a Utah salt manufacturer.

“Everything SCORE promised came true thanks to Mr. McDaniel. SCORE is a wonderful resource for small businesses.”

~ Herm Rowland, Chairman/CEO, Jelly Belly Candy Company

Herm recalls McDaniel as being “all-business,” yet genuinely concerned about helping the family turn the business around.  And there were no shortage of issues to tackle.

According to Herm, “One problem was that we were operating out of a cramped 10,000-square-foot building, which created a lot of manufacturing inefficiencies. Mr. McDaniel told us that we needed to expand, even though we weren’t making money.”  Ordinarily, we wouldn’t have even considered taking such a bold step.  But we trusted his judgment and decided to move forward.”

Obtaining funds to implement the expansion was far more challenging than the Rowlands had expected. So, McDaniel provided the guidance they needed to secure financing, and revamp their merchandising and costing system

“Our profit and loss statements were practically worthless to us,” Herm says.  “Mr. McDaniel helped us define our overhead expenses, which formed the basis of a costing system we still use today.  We know the exact amount of overhead for each of our products, whereas other companies often just add a fixed percentage.  They don’t know if that’s their true overhead cost or not.”

Perhaps the most important service McDaniel provided to Herm was as his mentor providing practical business tools and wisdom that would prove invaluable as he guided the company through the ups and downs of business. As a result of McDaniel’s mentoring, Herm learned valuable lessons that he used to help Jelly Belly achieve an enviable level of fiscal discipline and position the company for the once-in-a-lifetime opportunity to introduce gourmet jelly beans in 1976.

“There’s no doubt that Mr. McDaniel helped save our family’s company because he provided practical solutions. But he also taught me that to be successful, you have to think in terms of ‘us’ and ‘we,’ not ‘I’ and ‘me.’ That really woke me up to the importance of teamwork and commitment. My name may be at the top of the organizational chart, but it’s our 650 employees who are truly doing the work and making things happen.”

Jelly Belly recently announced plans to build a plant in Thailand to better serve its growing international customer base.  Now the company’s chairman and CEO, Herm enjoys how his children and grandchildren have become involved with the business, making Jelly Belly a fifth-generation family enterprise. And, to preserve the family tradition, Jelly Belly still makes candy corn based on Herman Goelitz’s original recipe.

“I have many fond memories of Mr. McDaniel, and we were so fortunate to have his help and support,” Herm says. I’ve told many other small business owners that they too can get the same kind of valuable advice by calling SCORE.  But, remember that SCORE won’t do the work for you.  You must be willing to listen and follow through on your counselor’s recommendations. SCORE is a wonderful resource for small businesses.”

If you would like SCORE  to assist your efforts and help you build your success story, attend our workshops and/or contact SCORE by clicking the link on the right to the office nearest you or click here to request free face to face counseling and/or mentoring.

Do you have the experience and skills necessary to become a volunteer SCORE counselor? Can you be a “Mr. McDaniel”? If so, why not join us and help us rebuild America one small business at a time? Click here to learn more.

Greg Boettner, St. Paul SCORE
View more posts by Greg Boettner

Filed under: SCORE Success Stories

Tags: gourmet jelly beans, Herm Rowland, Herman Goelitz Candy Company, Jelly Belly, SCORE Advice, SCORE Advisors, SCORE Counselors, SCORE Mentors, SCORE Volunteers