According to the folks at the NWPB, J. Slice was developed using feedback from focus groups made up of adults who have daily interaction with the youth market and elementary school-aged children. The response was very positive by both groups who felt the character represented the energy and vitality of a healthy lifestyle that includes eating lots of fruit and vegetables, especially watermelon.
As for the “J,” that part of his name is a little more of a mystery, but a friend at the NWPB speculates that it stands for “juicy” as in “Juicy Slice.” That makes way more sense than “Joe,” which was my first guess for the name behind Mr. Slice’s first initial.