Candyman: The Story of Jelly Belly Founder, David Klein

And we continue with our American Stories. And up next, a true story of David Klein, an eccentric candy inventor from L.A., who’s the creator and founder of Jelly Belly jelly beans, my personal favorite candy. Here’s David Klein to share the story of how he lost his beans but kept his soul.

I was born in Syracuse, New York.

We left there when I was three and a half, and I remember nothing about it. We came to California. My dad was the best furniture salesman in the world, and he knew more about furniture than anybody alive. And when I was growing up, I worked in a liquor store that my aunt and grandmother owned. It was in Van Nuys, right next to a Union 76 station that was owned by Joe Punicello and Punicello’s father. And in those days, if your family owned the liquor store, you could work in there. And from the age of about seven to thirteen, I worked in the liquor store all during the summer and after school, and I got quite an experience dealing with the public. I learned how to count money at the age of seven, make change, and all the things that I learned there, I wanted to put into a book one day. And the title of the book would be, “Everything I Knew in Life, I Learned Working in a Liquor Store.” And what happened was, we had a candy section there, and I would go with my aunt once a week to Smart & Final, which was one of the wholesale candy places.

Most of the.

Candy bars back in those days, I’ll see. It was nineteen forty-six, plus seven, six for seven paper, nine fifty-one, two, nineteen fifty-three, pay for nine fifty-one, two. Yeah, nineteen fifty-three.

Uh.

Smart & Final would display the bars, the candy bars twenty-four in a box. And if there was no shrink, shrink-wrapped, on any of the boxes, if you wanted to taste one of the bars to see if you liked it, you would put a nickel right in the box.

And then take a bar out.

And that way, whoever bought that box would already have a sale. And it was, I made a study of candy at the starting, at the age of seven. I would study every bar, see where it was made, see the company who made it, and then go to the library. I did a study on Standard & Poor’s Guide in the financial reference section, and I would look to see, for example, Baby Ruth, Butterfinger. Those were made in those days by the Curtis Candy Company. And then I followed the company when it was acquired by Standard

Brands, and then when it was acquired.

By Nabisco. And through all of the, I would learn the history of every candy bar. When I was in school and the teacher had to leave the room for a few minutes, she would ask me, or she or he would ask me to come up in the front and talk about candy. And kids would yell out names at candy bars, and I would tell them the history behind that particular bar. I went to Van Nuys High in Van Nuys, California. I graduated Van Nuys High with honors and went to UCLA, graduated with a degree in economics, which is a fantastic major. While I was at UCLA, I used to sell popcorn. I was in the popcorn business with my uncle. Where I would go after school, I had already taken the backseat out

of my car.

I loaded the car with bags of popped popcorn, and I was selling those primarily to liquor stores because you can go into a liquor store till actually two in the morning. In California, you cannot sell liquor legally after two in the morning. So I would usually have my route till about eleven o’clock at night, would go in all kinds of areas that I really should not have been in at night, but I was. And nothing ever happened to me. And then I would go home, and I’d get up at six, seven o’clock in the morning, and go to UCLA. After school, I would go pop the popcorn in at Water, and I really learned

about the food business by doing that.

In order to learn a business, it’s—I mean, it’s nice to read about it—but unless you really get in there and get your hands dirty, you really need to experience the business. Here’s what happened in law school. I always knew that I would never want to be an attorney. I went there because my parents wanted me to, and I also went there so that I would have a legal background if we ever had any illegal problems. I graduated in the top of my class. When it came to take the bar, the bar was in two parts. The first part was in the morning, and then the second part. It was a true-and-false test on a legal responsibility. And I never went back for the second part. I went to get a haircut instead. I knew that if I had passed the bar, which I’m sure I would have, I would have become an attorney.

And it wasn’t for me.

It wasn’t what I personally wanted to do in my life. And it was almost as if I knew I would be in the candy business someday. It was almost like it was; there was nothing else for me to do. I would be in the candy business. And there was something about candy. I liked the idea that you could always come up with a new idea, a new creation. And when I was in the wholesale candy and not business, one day I came up with the idea of creating a gourmet jelly bean. I was watching television at age fifteen, ‘Happy Days’. ‘Happy Days’ was on the air. When I was talking to a buddy on the phone. We were talking about new businesses, because I always loved to talk, loved to talk about new businesses. And I said, “I think I’m going to open up a candy store and only sell jelly beans, nothing else.” And he said, “Jelly beans?”

I said, “Yes, jelly beans.”

No jawbreakers, no gumballs, just jelly beans. And I knew that if that’s what I concentrated on, they would have to be special jelly beans.

And that’s when the idea started.

I had $800 to my name, no credit cards back then. The only credit card that was available was Diners Club. The year was 1976, and.

You’ve been listening to David Klein tell the story well of Jelly Belly, and what a story it is. His father, as he said, was the best furniture salesman in the world. He learned so much about life simply working the register and working, in essence, at the local family liquor store where he would buy supplies, products, services, and goods. He learned how to run a business, or be a part of a business run by a family. When we come back, we’re going to find out what happens next as one man pursues his dream. David Klein’s story, the story of Jelly Belly. Here on our American Stories. And we continue with David Klein’s story, and he is the founder and inventor of Jelly Belly. And when we last left off, he had $800 to his name, and he set out to create the world’s first gourmet jelly bean. Let’s pick up when we last left off, here’s David Klein.

I approached the company that was in Oakland, California. Their name was Herman Golitz (G-O-E-L-T-Z), and I asked them if they would be my contract manufacturer. And I told them what the idea was, and they said, “Sure, let’s give it a shot.” And in the beginning we had a very hard time selling the product. Most of the beans back in those days, our competition, they were selling for about forty-nine, fifty-nine cents a pound. And that’s exactly what I was paying my contract manufacturer—fifty-nine a pound—but that’s what every other bean was retailing for. I realized that in order to get the product off the ground, I would have to get some publicity for it. So one day I called up the Associated Press, talked to a young man by the name of Steve Fox. He was in charge of the business section. Associated Press was huge back in those days, and I realized that they could make or break the product. I could have started with a local newspaper, but I figured I’d at the top. I didn’t have enough money to rent a store, so I called on one of my wholesale customers who I sold walnuts to, and almonds that they put in their ice cream. They had an ice cream factory at 1824 West Main in Alhambra. And I said to them, “You have your medals from the county fair over in the corner.”

“I would like to have that space. This is my new product.”

“It’s going to be called Jelly Bellies, and I would like to put a little stand in there, which I will pay for.” So he said, “Okay, how much rent do you want to pay?” And I said, “I can’t really pay any rent because I just don’t have the funds.” And I said, “How about if I pay you a dollar for every that has sold? One dollar—the first dollar—goes to you.” He said, “Well, how much are they going to sell for?” I said, “$2 a pound.” I said, “I will split whatever comes in.” “You get the first dollar,” and he said, “It sounds good.”

So I put the stand in there.

I had. The daughter of one of the men who owned the ice cream parlor was an exceptionally good graphic artist, and she called me up and said she needed a project for her ArtCenter School. She was at the College of Art and Design, and she would like to use Jelly Belly as her term paper, and I left it up to her. She was the one that picked out the colors, and she did the Jelly Belly logo that is still in use today. A young lad came in one day on a bicycle, and he said, “I would like to try one of your strawberry jelly beans.” So I had a little spoon there. I spooned out one, and I said, “Here, what do you think of it?” And he said, “That doesn’t taste like strawberry.” I said, “Okay, what does it taste like?” He said, “That tastes like cotton candy.” And as soon as he left, I had one of the sign makers there make me a sign that said, “Cotton Candy.” And from then on in, there was no strawberry flavor. It was cotton candy. And I never got a chance to thank that young lad out there somewhere. The first order of jelly beans that I got in there were eight flavors. Root Beer was one of them.

I always loved it. Root Beer.

The soda. I loved Root Beer, and I love Cream Soda. So we had a vanilla one. And instead of calling it vanilla,

I named it Cream Soda.

I always liked to have creative names to all of the flavors. Instead of calling one Chocolate, it was Chocolate Pudding. So I tried to create as many names that were different just to distinguish them

from other products.

So when I told them what I wanted, I said, “I want to make a miniature jelly bean. I didn’t want the big one like they used to see in Easter baskets.” And I told them that the beans have to be flavored on the inside as well as on the outside shell. That way I could do double flavors. I could do like Chocolate Banana and do the outside Chocolate and the inside Banana. I told them I wanted a watermelon bean, and I wanted it green on the outside and red on the inside. Prior to Jelly Bellies, every jelly bean that you used to see used to be white on the inside because they made only one center, and then they put the flavor into the shell. If they put any flavor at all, most jelly beans tasted the same, except for the black one. The Licorice one. And so, I was really the first one to come up with the eye idea of flavoring the outside as well as the inside.

And that’s how Jelly Belly got its start.

And most days we took in about $20. That was the average day until the article came out in Associated Press. And then I started getting calls from department stores, such as Marshall Field’s in Chicago. They said, “We want to buy your beans.” I said, “We’re here in California.” “How did you hear about them?” “Well, it was just in the ‘Chicago Tribune.’ It was also in the ‘Detroit Free Press.’ It was in the ‘New York Times.’ It was in the ‘L.A. Times.'” The article broke on the wire, and it went everywhere, and the product really started to take off. It took off to the point where sales were just incredible. My contract manufacturer actually could not keep up with the orders. When I initially had talked to them, I asked them; I said, “This is going to be big,

guys.”

I said, “Are you going to be able to keep up with all the orders?” And they said yes. And I did not realize that they were primarily a small candy corn manufacturer. In Oakland, with about 10 employees, and somehow or another, in my mind, I always pictured them as a larger company. The biggest mistake I ever made was not flying up there in the beginning to see what their factory looked like, because if I had seen it, I would have known that they never would have been able to keep up with production.

And you’re listening to David Klein tell the story of Jelly Belly, and he’s an innovator. No other jelly bean. I’ll eat at Jelly Belly, and I don’t care how much more expensive they are. And I know a lot of you listening feel the same way about your beloved beans. When we come back, more of the story of Jelly Belly here on our American Stories. And we continue with the story of Jelly Belly and its founder, David Klein. And when we last left off, thanks to Klein’s round-the-clock promotion, Jelly Belly sales skyrocketed, but his contract manufacturer in Oakland couldn’t keep up with the orders. Klein told us, quote: “The biggest mistake I ever made was not flying up there in the beginning to see what their factory looked like, because if I’d seen it, I would have known that they would have never been able to keep up with production.” Here’s Klein with the final installment of his story.

And then O.J. Simpson was on the cover of ‘People’ magazine, the issue that I was in. And when my contract manufacturer saw the picture I had on bathing shorts and nothing else, he turned to his sales manager and said that I had ‘blown the whole golden goose,’ because nobody would buy a product from somebody that would pose half-naked in a magazine. And so at that point in time, he instructed his sales manager. They also made candy corn, and it was made on the same equipment as the jelly beans. He instructed him, without telling me, to sign as many contracts as he could to be selling candy corn at 29 cents a pound just to keep the factory open. And I was never told that. So here I am trying to promote an item that I can—I’m wondering why there’s no production on.

And what it did.

It created a void in the marketplace that other manufacturers were just happy to fill. One day, I got a call from the owner of my contract manufacturing company, and he said, “We’re coming to town.” And I said, “Okay, great, I’ll pick you up at the airport.” “What airport are you flying into?” And he said, “It’s not going to be one of those kinds of meetings.” And I said, “Well, what kind of meeting is it?” He said, “We’re coming to buy your trademark, and we’re not going to leave until we do.” As soon as I signed the contract where we were turning the name over to them, we were driving on Rosemead Boulevard to the bank to get the contract notarized. And while on the way there, I was sitting in the back seat. Herm, my contract manufacturer, was in the front seat, and he turned around, and I said, “Herm, I have one question for you.”

“If we were not on

our way to the bank to have this contract notarized, what would you have done?'” And he said, “You really want to know?” I said, “Yeah, tell me what would you have done?” He said, “We would have flown back to Oakland, and on Monday morning, we would have shut off production to you on Jelly Bellies.” “We would have cut you off completely.” “You would not have any more product.” “We know you would have sued us, but by the time it got to court, you would have been broke.” Those were his exact words. I can remember them today like they were yesterday. “We would have cut you off.” In fact, they told me, as we were going to get it notarized, they had another name already picked out that he had on the other side of his—on a piece of paper on his lap. He said, “You want to see that name that we would have called it?” And I said, “Sure,” and he showed it to me. I don’t remember what that name was, but anyway, they took over ownership of the name. They paid us 17 cents a pound for the first 120,000 pounds per month royalty maximum. Once the product reached that level, there was no royalty at all. So we only got paid on the first 120,000 pounds at 17 cents a pound, which came to $20,000 per month. I split that with my partner, and then Uncle Sam obviously got his share of it. And right from the beginning, when I sold it, it was almost like selling a member of your family, a child: Jelly Belly. I spent four years of my life going around the country promoting the product, being on radio shows, on talk shows, on television shows at least once a week, and giving interviews in magazines and all kinds of media. And losing the ownership of it was heartbreaking for me. The minute they took over, they started packaging the product, and the prior packaging had my signature on there: Mr. Jelly Belly. About two months later, I went into a supermarket, and I looked at the package, and there was a computer-generated Mr. Jelly Belly instead of Mr. Jelly Belly’s signature. When they came out with a book called ‘The 30-Year History of Jelly Bellies,’ I was not even mentioned in that at all. So they pretended that I never existed. As soon as Colonel Sanders sold out, he was still Colonel Sanders.