Jelly Belly Candy Co. Becomes More Efficient With Help From SCORE
One day in the early 1960's, 22 -year-old Herm Rowland was thumbing through a copy of Reader's Digest when he read an article about SCORE, then a new program that offered free counseling services to small businesses.
If there was one thing that Herm felt he and his parents needed at the time, it was good advice. They were the owners of the Herman Goelitz Candy Company, an Oakland, CA, candy manufacturing business founded by his grandfather. Despite its reputation for quality and 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, but the no-risk proposition of free counseling led Herm to give SCORE a call.
It was a decision that Herm says, "changed my life."
The Herman Goelitz Candy Company evolved into the Jelly Belly 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. Each year, Jelly Belly produces more than 34 million pounds of tasty treats, 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.
Jelly Belly's success continues as they 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 has enjoyed watching his children and grandchildren become involved with the business, making Jelly Belly a fifth-generation family enterprise. And speaking of family, Jelly Belly still makes candy corn based on Herman Goelitz's original recipe.
Herm recalls McDaniels as being "all-business," yet genuinely concerned about helping the family turn the business around. And there were no shortages of issues to tackle.
"One problem was that we were operating out of a cramped 10,000-square-foot building, which created a lot of manufacturing inefficiencies," Herm recalls. "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."
"Our profit and loss statements were practically worthless to us," Herm says. "Mr. McDaniels 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 of not."
Perhaps more importantly, McDaniel proved to be an ideal mentor for Herm, providing practical business tools and wisdom that would prove valuable as he guided the company through the ups and downs of business, and be positioned 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 gave me real-life solutions to address our challenges," Herm says. "But he also taught me that to be successful, you have to think in terms of 'us' and 'we', not 'I' and 'me'. That was a small mental adjustment, but it really woke me up to the importance of teamwork and commitment."
"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 mentor's recommendations."
Recalling that long-ago Reader's Digest article, Herm says that, "Everything SCORE promised came true thanks to Mr. McDaniel. SCORE is a wonderful resource for small businesses."