Magic Beans At The Jelly Bean Factory
29th May 2014 Paul Andrews
Fun and failure are unique ingredients that have helped Peter and Richard Cullen taste success at confectionery company Aran Candy, better known as The Jelly Bean Factory.
A tour of The Jelly Bean Factory production facility in Blanchardstown outside Dublin, Ireland, will drive your sweet tooth into paroxysms of delight. The air is sweet — quite literally — and perfumed with grapefruit, kiwi and raspberry, among the 36 available flavors.
If you thought these jelly beans were just like any other, then think again. The Jelly Bean Factory beans are altogether different. They are a smaller size, and the entire bean is naturally flavoured, providing a richer, more intense taste. Most other jelly beans contain a generic centre made of starch and sugar, which is wrapped in a flavoured outer casing.
The company’s founders and Joint Managing Directors are 70-year-old Peter Cullen and his son Richard, who is 49 — otherwise known as “Old Bean” and “Big Bean,” according to their business cards. The perfect partnership, father and son have split their roles to match their complementary strengths, with Peter heading operations and Richard putting his business andmarketing skills to use in sales and promotions.
They are proud to point out that theirs is very much premium confectionery. Just as consumers have responded positively to the offer of gourmet chocolate, coffee and ice cream, The Jelly Bean Factory’s success is largely based on its position as a high-end, naturally sweet product.
Lessons from failure
Following the failure of Peter’s previous employer, Clara, a wine gum producer that also specialised in large-scale production of mainstream gummies, Peter partnered with Richard to create The Jelly Bean Factory. They had a vision to manufacture a branded product with added value and recognized a niche market in Europe for high-quality confectionery. “Premium products are more difficult to manufacture, but they can also be more profitable,” Peter explains.
Peter started his business career in food distribution in the 1970s and gradually moved to confectionery. He became Managing Director of Irish confectionery factory Clara in 1982, and Richard joined the company in a sales and marketing capacity in 1987.
A decade later, the venture collapsed when the sterling pound suddenly fell on the currency markets and the company found itself priced out of the UK, its main market. “When you’re faced with adversity like that, you’ve got no choice but to start from scratch,” says Peter.
Picking themselves up, the Cullens established Aran Candy in 1998 from an office consisting of the family’s dining table, a couple of computers and, most importantly, a list of contacts and their combined 40 years’ knowledge of the confectionery market. The company began as a marketer and broker of a variety of confectionery products, including the brands JollyTime gummies and The Jelly Bean Factory gourmet jelly beans.
When the popularity of the gourmet jelly beans began to build, Richard and Peter saw potential to grow the brand further and decided to drop the other products from their line. With a product they believed in, the Cullens set about creating a marketing strategy to take the brand to new markets, feeling the smaller, more flavorsome, high-end bean had global appeal.
“We decided to focus on building The Jelly Bean Factory brand, even though it meant our turnover halved,” Richard continues. “We had a clear belief that this was where the potential for growth lay and not in trading commodities. My passion is all about building the brand with a product and packaging that breaks boundaries.”
Peter takes up the story: “In the early stages of the company, we didn’t have the financial resources to set up production for a small, niche product, so we took the decision to subcontract the manufacturing to another confectionery company. This allowed us to concentrate on marketing activity to develop the brand in the trade.”
They controlled the product formulations and packing operations until the business grew to a level that made subcontracting no longer commercially viable.
In 2003, an opportunity arose for the duo when a confectionery company in the UK, which they had planned to partner with, decided to sell its manufacturing facility. It allowed the Cullens to purchase the equipment and set up their own dedicated manufacturing plant in Dublin to make this difficult product.
It was a tough time to be starting a manufacturing operation in Ireland. It was at the height of the Celtic Tiger — a period of rapid economic growth from 1995 to 2007 that caused property prices and labour costs to soar. “Securing an affordable property to work in and a workforce to staff it was one of the business’s early challenges,” says Richard.
“It was an uphill battle, but our suppliers were great,” says Peter. “We kept our overheads very low. From year one we started to make a profit, but it was small and we didn’t pay ourselves much.”
By controlling costs, working closely with their existing customers and identifying new markets that would be relatively low risk, the father and son managed to build up sales year by year. But the Cullens have not forgotten those who have stood by them. Walking through the factory with the pair, the respect and care they have for their employees is clear. The company has low staff turnover and a warm, family atmosphere, with great camaraderie as Richard and Peter greet each worker by name.
The demise of Clara, their early employer, was not easy and taught both men the value of sound financial management. Today the company has no debt, and waste in the factory is less than 1%. Their original business influenced them in other ways, too, including the culture of the company and its core values.
“Losing my job in the early days was tough,” says Richard, “and then I bumped into a friend who said, ‘This is the best thing that could happen to you.’ He was right. You build up your resilience and your determination to succeed after an experience like that.”
Both men believe there needs to be more of an acceptance of business failure in Europe. “In America it counts in your favor if you’ve been through adversity — you learn so many lessons,” Peter says. “That’s the real test of an entrepreneur.”
Global gourmet appeal
As a premium product, The Jelly Bean Factory beans do not contain gelatin or genetically modified organisms. The beans are also halal, vegetarian and kosher. The Cullens have put great effort into standardizing their product so that it complies with regulations in all markets. Expanding internationally was a long and well-planned process, with the Cullens undertaking substantial travel to assess each market’s individual needs.
They found, unsurprisingly, that tastes vary greatly among their export markets. Mango-flavoured beans, for instance, are big in Indonesia. The French hate cinnamon while the Americans go wild for it, along with cotton candy and popcorn.
Taking these insights back to headquarters, they used them to shape their strategic growth plan and marketing activities, trying to exploit the different opportunities in individual markets. Offices have since been established in the UK and the Middle East, and each distributor in these markets have a strategic plan to grow the brand with year-on-year sales growth. That’s something the Cullens monitor closely, providing support and advice where needed to help that growth continue.
Currently, their key growth markets are the UK, Europe, Scandinavia, South Africa, Australia and New Zealand, with a two-year, multi million-euro investment programme looking at strategic partnerships, trade marketing campaigns and product development, which is predicted to grow export sales by a further 50%. They’ve looked closely at exploring South America, but they’re cautious about moving into this vast and fast-growing region too quickly, wanting to be firmly established in earlier target markets first to guarantee sustainable growth.
And the business has grown rapidly — it’s about to move from its 98,000-square-foot facility to one that is nearly one-and-half times as big.
Thanks to the growing visibility of the brand, the company has received a number of overtures recently. “In the past few months, we’ve been offered opportunities that would double our capacity,” Peter reveals. These include collaborations with other confectionery manufacturers and retailers. “But we’d be busy fools,” says Richard, who is dismissive of manufacturing own-label brands for supermarkets and other companies:
“All you’re doing is competing with yourself. We’re looking for strategic alliances, but it’s important that we also get our own brand exposure,” he continues.
“We’re constantly striving to break boundaries with the product, to do things that are difficult and haven’t been done before.”
To that aim, they currently partner with a large Finnish confectionery company that looks after all Finnish distribution, and they market a co-branded product in the US, The Jelly Bean Planet.
“The candy business is about fun and nice things, and that makes it enjoyable,” Peter concludes.
Nevertheless, the Cullens have clearly been steeled by their experiences. Focus and financial discipline are two qualities they frequently stress. As Richard puts it: “This is a fun brand, but it’s a serious product and a serious business.”
Reproduced with permission from Ernst & Young. First published in Exceptional Magazine January - July 2014. Visit their website to find out more.