Sozzi: Jelly Belly Is an Easter Treat for Market Watchers

NEW YORK (TheStreet) -- Trips to stores are no longer normal for me (normal being those trips to JC Penney (JCP) with mom as a kid). They haven't been for quite some time. As a stock analyst, you are constantly on the prowl for the next great investment opportunity that could be sitting on the shelves of Walmart (WMT), Target (TGT), or CVS (CVS).

At the bare minimum, there is an ongoing pursuit to see if a well-established, publicly traded company is doing something differently, good or bad, in the marketplace. Trust me: the truth of a company's future financial statements are so very often staring at you in the everyday environment.

So with eyes wide open, per the usual, during a recent Dick's Sporting Goods (DKS) store walk I stumbled on these two nifty products from the non-publicly traded confectioner, jelly bean king Jelly Belly.

The immediate thoughts I had:

  • Since when did Jelly Belly sell sports nutrition products to workout enthusiasts such as myself? (I would later find out the quick energy sports beans have been on the market for a bit, the protein recovery crisps are a new product.)
  • Rock solid move by merchants at Dick's Sporting Goods (DKS) for sticking these innovative new products at the high-margin impulse area known as the checkout.
  • Why hasn't a Hershey (HSY) expanded into the rapidly growing sports nutrition market? All of the ingredients are there to put together a product (could be a bar, shake, or like Jelly Belly, a form of protein crisp) that creates a new growth avenue.

The total confectionary market has grown for six straight years (chocolate the fastest growth rate at 3.6% in 2013), in my opinion as household names like Jelly Belly tap into their brand equity and expand into new product lines. With the second largest holiday for the industry behind Halloween, Easter, set to hop into homes nationwide, I had the opportunity to talk with Jelly Belly's Vice President of Marketing Rob Swaigen.

5 Fun Facts on Jelly Belly to Share on Twitter & Facebook

  1. April 22 is National Jelly Bean Day. Program that into Hootsuite, have it released on Twitter at 6:00 am EST.
  2. 2014 marks the 25th anniversary of the Buttered Popcorn Jelly Belly bean flavor. When it launched, it was the world's first savory jelly bean flavor.
  3. If you laid all the Jelly Belly beans eaten this year end to end, they would stretch around the Earth 5.5 times.
  4. Favorite flavors change depending on where you are in the world. Very Cherry is the favorite flavor in America, while Lemon Lime is most popular in Asia, Tutti-Fruitti in Europe, Berry Blue in the Middle East and Bubble Gum is the favorite down under.
  5. It takes between seven and 14 days to make a Jelly Belly jelly bean.

On my new post-workout favorites, Jelly Belly's Protein Recovery Crisps/Energy Beans:

  • There is a separate effort inside Jelly Belly, or a dedicated sales team, responsible for selling the sports nutrition products. This shows the opportunity inherent to the market which Jelly Belly could reach into via a product that has proven athletic performance benefits. FYI: The global sports nutrition market was valued at $20.7 billion in 2012 and is expected to grow at a CAGR of 9.0% from 2013 to 2019, to reach an estimated value of $37.7 billion in 2019.
  • Availability of these products are expanding, and can now be found at GNC (GNC) and Walmart (WMT).
  • Specific to the energy beans, these were developed as a counter to the exploding packaged gels market. By having a product in a small, resealable package, it addresses a desire by the workout enthusiast to space (or as Swaigen put it, "meter") out ingestion as to provide a more consistent energy stream.
  • The sports product line is no marketing gimmick. Jelly Belly has had thorough research done on the athletic performance benefits of its products, which could be read here.

Yes, Jelly Belly still rocks the most authentic jelly beans in the business. New things to know:

  • The company just released a new party collection centered on decorating and baking. Key attribute of these jelly beans: they have a shiny coating so as to visually pop.
  • Yes, there is real tobacco sauce in the re-introduced Tabasco brand jelly bean that also happens to now be available in chocolate flavored.
  • No, Jelly Belly has not seen any impact according to Swaigen from large customers (think big box retailers) seeking to manage inventories cautiously. The Easter holiday should be especially kind to confectioners this year due to the later calendar date.

-- Written by Brian Sozzi CEO of Belus Capital Advisors, analyst to TheStreet.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff. Brian Sozzi is the CEO and Chief Equities Strategist of Belus Capital Advisors. He is responsible for developing and managing an equities portfolio of mid- and large-cap positions, in addition to leading the firm's digital content initiatives. He is also a personal finance columnist for Men's Health magazine.

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