ENTERPRISE : LEARNING CURVE: FRIEDA’S INC. : Producing Results : Sisters Grow Family Food Business

Sisters Karen Caplan and Jackie Caplan Wiggins took over Frieda’s Inc., a wholesale fruit and vegetable business founded by their mother, in 1990. Since then they have made changes to expand the business while taking special care to preserve family ties. Caplan and Wiggins were interviewed by Karen Kaplan.

Our mom, Frieda, founded this wholesale produce company in 1962.

When we were kids, we worked at the business in the summers and over school vacations. We both went away to college, and there was never any discussion with mom about making it a family business. Then Karen joined in 1977 after getting a degree in agriculture economics and business management from UC Davis, and Jackie joined in 1983 after getting a degree in business and marketing from San Diego State University.

The business was very basic when we started. We were doing $5 million a year or less and there were only 12 employees. Now Frieda’s has 45 employees, and our sales will reach $25 million this year.

Karen became president in 1986 and runs Frieda’s like a professional organization. She instituted a team of managers, whereas when mom was running the company, it was much smaller and you could have one person trying to oversee everything. You have to give up control to grow your business. The reason sales doubled when Karen took over was that she didn’t have to look at every single piece of paper the way mom did.

A year and a half ago, we moved 25 miles from downtown Los Angeles to Los Alamitos. Even though the wholesale produce market is downtown, that’s not necessarily where our customer base is anymore. Now we sell 85% of our products outside the state of California.

The business is so completely different. We’ve given the company our own flavor. We really give Mom credit for allowing us to grow the company this way.

After Karen was made president in 1986, we spent the next four years trying to talk our parents into selling the business to us. Mom was fine with selling the company. She saw us at work every day and she knew we would be OK--plus she got to take a two-week vacation for the first time in her life. But Dad didn’t see that.

We spent four years with our CPA talking our dad into selling the business. We convinced him that from a financial standpoint, it was cheaper to let us buy the company rather than waiting for us to inherit it and having to pay more taxes.

After we bought the company, Jackie continued in the vice president position. In any company, there can only be one leader. The ownership is split 55%-45%. We could not imagine being co-CEOs. That is just a recipe for failure.

If we don’t agree, we may be very vocal about it, but that doesn’t happen very often.

We separate our business lives from our personal lives. When we’re here at work, it’s all business, and when we’re at home, it’s personal. When things don’t go well with family businesses, it’s because people let their personal lives interfere with their company.

On remaking the company in their own image . . .

“The business is so completely different. We’ve given it our own flavor. We really give Mom credit for allowing us to grow the company this way.”

On making changes to promote growth . . .

“You have to give up control to grow your business. The reason sales doubled when Karen took over was that she didn’t have to look at every single piece of paper the way Mom did.”

On the importance of having a leader . . .

“After we bought the company, Jackie continued in the vice president position. In any company, there can only be one leader. The ownership is split 55%-45%. We could not imagine being co-CEOs. That is just a recipe for failure.”

AT A GLANCE

Company: Frieda’s Inc.

Owners: Karen Caplan, 40, and Jackie Caplan Wiggins, 37

Nature of Business: Wholesale produce company

Location: Los Alamitos

Number of employees: 45

Annual sales: $25 million