Manufacturers
Exclusive interview with Bob Simpson, COO of Jelly Belly

Jelly Belly exec: Stand out in nontraditional retail formats

20-Feb-2014
Last updated on 20-Feb-2014 at 16:47 GMT - By Maggie Hennessy
For us, there’s always what we call a ‘nontraditional’ customer to be found—a customer that isn’t in the candy business today that we’d like to put in the candy business because it’s an impulse buy,” said Bob Simpson, Jelly Belly's COO.
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For a company the size and scope of Jelly Belly—the confectionery giant sells more than 100 flavors in 80 countries (and growing) and across multiple market segments—finding untapped channels in the domestic market has become an “out of the box” endeavor. That’s where candy’s inexpensive, multifaceted appeal comes in handy, chief operating officer Bob Simpson says.

Jelly Belly’s international division has been growing by leaps and bounds in recent years, now accounting for about a quarter of sales. With a strong presence in Europe, the UK and growing footprints in the Middle East, China, Japan, Korea and Australia, the company is looking to widen distribution in developing markets as well.

“Growth internationally continues to be double digit,” Simpson told FoodNavigator-USA. “There are also maturing markets, like Vietnam, India and others where we have opportunities. People in other countries enjoy Western brands, Jelly Belly specifically.”

At home, he said, growth is more about seizing on the impulse nature of candy to find new distribution channels. “Domestically, there are still plenty of places where Jelly Belly isn’t. For us, there’s always what we call a ‘nontraditional’ customer to be found—a customer that isn’t in the candy business today that we’d like to put in the candy business because it’s an impulse buy.”

There’s always that ‘nontraditional’ customer that isn’t in the candy business today

One example—which is now one of Jelly Belly’s biggest customers—is TJ Maxx. “Ten years ago, TJ Maxx was not selling any candy in either of their clothing stores [TJ Maxx and Marshall’s] or Home Goods,” Simpson said. “But we convinced them. It hasn’t interfered with anything else they’re trying to do. It’s impulse, offered in gift bags or other smaller consumer packaging. It drives their business, helping them maximize every visit a consumer makes to their stores. They don’t care if they sell a belt or a bag of candy.”

Today sales to TJ Maxx are “up there Walmart, Target and Costco,” Simpson said. “So what’s the next TJ Maxx of the world? The next nontraditional way to sell candy—we’re always looking for that.”

The company also invests heavily in innovation to stay top of mind, not just in exciting new flavors, but in additional product lines and creative packaging. Indeed, new product development represents 20% of sales in year-on-year growth. "The Grab & Go line is the most innovative way that Jelly Belly has positioned itself from a packaging and price point standpoint. We offer varieties and mixes; gummies, chocolate and licorice items all marketed on a fixed price point. That’s how we broadened our reach and got into convenience stores."

Jelly Belly has also long been known as a pioneer when it comes to new flavors. “Over the years, we’ve become known as a leader in our industry when it comes to innovation. We first introduced cocktail inspired flavors back in the late 1970s—mai tai and pina colada. We dedicate a lot of resources toward product development.”

Finding the wow factor: ‘not by mistake, by design’

So it's unsurprising that the company's latest flavor, the draft beer jelly bean, took three years to develop. 

“It is quite an involved process. Our folks in R&D have to work with flavor companies to develop a flavor that captures the essence of those unique flavor qualities. We call it that ‘wow’ factor. When you taste toasted marshmallow, for example, it is absolutely toasted marshmallow. We will not market anything other than a 10, flavor wise.”

Beer was especially challenging because, “like spaghetti sauce”,  everybody likes what they’re used to having, he said. So Jelly Belly focused on a particular flavor of beer people could identify with—in this case, a (non-alcoholic) wheat-enhanced, Hefeweizen flavor.

“Once we smelled and tasted that, we had to go ‘Wow!’ It’s hard to do, because it’s sugar. That sweetness comes pretty quickly into the mix in your mouth. Beer doesn’t have that kind of finish, so that was the hard part. We really tried to balance that and get people to say, ‘That’s beer.’ From a food science aspect, that takes a lot of time. It was not by mistake, but by design.”

Once the flavor is perfected, the company works on scaling it up for manufacturing “without losing its essence,” and develops a marketing and business plan, which involves a lot of back and forth until consensus is achieved internally. Then it’s on to packaging and distribution.

Jelly Belly launched draft beer globally this month at the International Sweets and Biscuits Fair in Cologne, Germany. Within two days, it had gone viral and the company had sold out of product. “We didn’t anticipate it, but people got on our e-commerce site and bought it,” Simpson noted.

The oft expensive lessons of navigating retail channels

The company expects draft beer will sell well in both the specialty (gourmet candy stores, gift shops, high-end department stores) and mass, food and drug channels, though it often targets the specialty channel first with new rollouts.

“Specialty retailers like getting the product put into unique packaging that gets them differentiation from the mass market,” Simpson said. “Then we get buyer feedback to develop the next phase of distribution. We might make some tweaks, which is partly why the whole process takes so long. We don’t want to put the product in a package or price point that won’t work at retail. We’ve learned that over the years—and they’ve been some expensive lessons. But we’ve gotten better at it,” he added with a laugh.

                

Related topics: Markets, Manufacturers, Confectionery, Chocolate and confectionery ingredients