Frat parties actually played a role
JELL-O, for its part, has done nothing but reinforce the connection with Mormons, and overall family wholesomeness. In the late '70s and early '80s, JELL-O shots and the rarely seen but much beloved "JELL-O wrestling" matches rose to prominence in sloppy frat houses around the country, giving JELL-O a negative association with debauchery... a decidedly un-family-friendly look.
Naturally, the family-centric brand would much prefer being linked to a state known for being as straight-laced as Ned Flanders at a Wonderbread convention, rather than gratuitous drinking and naked wrasslin'.
So, the company welcomed any link with Mormon culture.