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A Hill of Beans, Jelly Belly on CNBC

Herman Rowland, Sr.: Leave No Stone Unturned

The story of a California candy company that ultimately sent their product to the White House is part of a larger story about entrepreneurship, dedication and perseverance. When Herm Rowland, Sr., stepped into his family’s small business in 1959, known then as Herman Goelitz, Inc., remarkable changes began to take place and the company grew from 23 employees to more than 800 today.


Early Training Makes a Difference

I've spent my whole life in the candy business. I always thought I'd go into the business, too. My father had me sweeping floors at the age of 13. He had me take apart large machinery and then put it all back together – it took me months.

In 1959 I was 18 years old when I joined the company. My first real job was making wooden trays for the depositor. The company was founded by my grandfather, Herman Goelitz. Our lifeblood was making mellocremes, mainly candy corn. I got to work at 5 am to fire up the kitchen, worked a full shift. Then I went to work driving a tractor in the afternoon to support my family.

Looking at every detail of the business and how the candy was made had a big impact on me. I used those early days to really understand the company.


Expect to Grow and Invest in Quality

I always expected to grow [the business]. That's what we wanted to do. In the 1960s, we worked out of a 10,000-square-foot factory in Oakland, Calif. We didn't own a forklift, so we loaded 40-foot-trucks by hand. That's 1600 cases, and we did it in less than an hour. We worked our butts off.

We had to expand into other candies, ones that had a higher profit margin than candy corn so we could earn a few pennies more per pound. We started to make all types of candies from gum drops, orange slices, and jelly beans of all sizes.

We wanted to make the best candy with the best ingredients and the best practices. The best quality is what we expected to do and what we wanted to be known for. One of those new products was a small and very flavorful Mini Jelly Beans. The flavor was more than the typical jelly bean at the time –it's what made us different in the marketplace. The work to develop the proprietary flavor and formula for those Mini Jelly Beans eventually became the basis for the first Jelly Belly beans more than a decade later.


If You're not a Goofball, People Will Have Trust in You

I believe it's important to approach every situation with integrity and honesty, and to always speak openly and clearly. Those ways of working, along with quality products, will give people trust in you.

We did business at a local bank in Oakland where the manager, an older fellow with a heavy Italian accent, would see me come into the branch pretty regularly. He'd say to me, "Herm you must open a Christmas account. You must save $10 a week." What? I was a young guy and only made $68 a week - $10 was half my food budget. But I took his advice and he got me into the habit of saving. He knew we were reliable and met our obligations. If you're not a goofball, people will trust you.

Our expansion into new candies really began to make a difference to the company. We had more production throughout the year, and the new candies filled our production capacity to the limit. Around this time we found a SCORE advisor [Service Corps of Retired Executives]. Mr. McDaniels was his name. He would come in on Saturdays and analyze every area of the business. He said we had to expand production.

The local banker helped by loaning us $61,000 to build the plant expansion in the 1960s so we could grow even more. His bank headquarters in San Francisco turned us down, but when we came back discouraged, he said, "Herm how much do you really need for the building?" He made the loan because he knew us, trusted us and saw what we were doing.


Do the Right Thing, Even if it Costs you

As it turned out, one of our friends in the business met Ronald Reagan while Reagan was campaigning for California governor in 1966. He learned Reagan was eating jelly beans to stop his pipe smoking habit, and we sent him Goelitz Mini Jelly Beans. Reagan was elected, and we began shipping those Mini Jelly Beans to Sacramento in 1967.

We never promoted this connection because the office asked us not to, and we honored that. Even when President Reagan went to the White House we did not promote our connection out of respect for the man and the office. The media discovered us and told the story anyway. Our friendship with Ronald Reagan continued for forty years and it has been the most important and remarkable experience for me.

Sometimes doing the right thing can be costly. We've thrown out candy when it wasn't right even when the candy was perfectly fine to eat. I tell our people to make every piece as perfect as you can because each one of those jelly beans goes into someone's mouth. We want everyone to have a “wow” experience when they eat our candy, it is tastes that good. If we make a mistake and something doesn't come out right, we deal with it, and then improve it even more on the next run.


Toughest Decision

The most difficult decision I ever made was to leave the original factory in Oakland where we had grown into three buildings, all of them disconnected. By 1984 we had reached capacity, and we had two plants working all the time. It was a huge stretch to find a new location and build a new 100,000-square-foot factory from the ground up. Our employees were important to us, and we didn't want to leave them behind. We had to do it to keep growing.

We found a location not too far away in Fairfield, Ca. It was way beyond our financial stability to make such an investment in the future. Almost all of our employees came with us, which was important. We didn't know if business would keep growing, but we planned for room to grow. I poured every bit of profit back into the business for years. In 1992 we more than doubled the size of the original factory and built again.

It's important to keep looking forward, to keep looking for ways to grow. I approach every situation thinking about how it will take us further, while maintaining our quality. That is a challenge as you grow. We leave no stone unturned.