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“Walk Around With Your Eyes Wide Open”

At the helm of a fresh produce company that has surely introduced more fruits and vegetables to the United States market than almost any other in recent decades, Karen Caplan has a firm pulse on the industry. She recently ended a near-four-decade period as president and chief executive of Los Alamitos, CA-based Frieda’s Branded Produce, an importer, marketer and distributor of a diverse range of exotic and uncommon produce items not offered by most distributors. The company was founded in the early 60s by her late mother, Dr. Frieda Rapoport Caplan, one of the most pioneering and trailblazing women in the history of the U.S. produce industry. Karen and her sister, Jackie Caplan Wiggins, had been co-owners since 1990.

Karen studied agricultural economics and business management at the University of California, Davis, before entering the family business. From an early age, she helped her mother with creating recipe ideas for new and unknown exotic products, as well as other tasks like designing packaging and marketing. At the age of 30, she was promoted to president, overseeing the continued growth and development of the company since the mid-1980s.

In late January 2023, it was announced that the 61-year-old company had been acquired by Legacy Farms LLC and renamed Frieda’s LLC. Based in Anaheim, CA, Legacy Farms sells a range of mainstream produce and has a strong presence on the West Coast, and its CEO, Dan Madsen has been friends for many years with Karen, who will stay on temporarily in an advisory role.
Here she talks about the reasoning behind the sale of the company, the rising demand for specialty produce, trends that will impact the industry, and what excites her most about what is to come.

The following interview has been edited for clarity and brevity.

What was your life like growing up with a mother who was such a pioneer in the industry?

When my sister and I were growing up, no one had a mom who worked. Everyone’s mom stayed home. My memory is that she wasn’t around because she would get up at one o’clock in the morning to go to work and she wouldn’t get home until five or six in the afternoon. But I remember she was really interested in other people. She was really inclusive, and she always brought people together.

As a teenager, I was a little bit annoyed — my mom couldn’t cook, I didn’t have the nicest clothes, and I didn’t fit in. But as I grew older, I learned that she was the perfect mom for me. So, I finally realized the fact that she was all those quirky things, and not like everybody else’s mom, just made me into what I am today.

It’s interesting that someone who introduced so many produce items didn’t enjoy cooking.

She loved eating, but not cooking. She wasn’t very domestic; she was always a promoter. Even when she was at college at UCLA, she was known for running people’s political campaigns. When I grew up, I started cooking dinner every night around age eight. And so, I was responsible for cooking the dinner meal every day. Back then we were introducing all these new and exciting fruits and vegetables that no one had ever heard of, and no one had ever cooked with, and I was the first person who developed recipes for all of our products. I also helped to design the packaging for some products.

Do you know why your mother focused on specialty produce?

If you can imagine some 65 years ago at the LA produce market at 2 o’clock in the morning, there’s my mum and all the men, and they’re all wearing big jackets and probably smoking cigarettes. And any time someone comes to them with something new they say, ‘No, I don’t sell that. I sell potatoes,’ or ‘I sell apples.’ My mum was a natural promoter, she was open-minded and very welcoming. I think the reason she got into all these wild and wacky products is that no one else was interested, and she was like, ‘Oh, tell me more.’

What would you say has been the key or defining moments in your career?

The first defining moment in my career was when I was promoted to president and CEO of Frieda’s at age 30. I had learned about an organization called “YPO – Young President’s Organization,” which you could join when you were 30. Well, I was 30 at that time, and decided I wanted to join. So, I approached my mother about making me president (I reminded her that I was already doing the job of a president, but only had the title of vice president at that time). Well, after some discussion, she promoted me to president on July 1, 1986. Unfortunately, when I applied to join YPO shortly afterward, they made it clear that there wasn’t room for a woman (in so many words). Funny thing — a year later, I was asked to be a guest business speaker at a different YPO group, from Pennsylvania. Go figure.

The second key moment in my career was in 2001, when I was asked to be the first woman chair of the United Fresh Produce Association. It was the 99th anniversary of the oldest produce trade group — it only took 100 years to have a woman chair! It was so exciting to represent the industry. I recall testifying in front of the Senate Agricultural Committee and holding up fresh produce and talking about the importance of accessibility of fresh fruit and veggies to children. It was such an awesome experience to lead our industry for that year, and I think I made a real difference.
And finally, I grew up as “Frieda’s daughter,” working side by side with my mother since 1977. In 2011, my eldest daughter, Alex Jackson joined Frieda’s, and after watching her develop and mature in her role in our company and our industry, I am now known as “Alex’s Mom.” It is very special to watch my daughter become the third generation of leaders of the company and our industry.

Why did you and your sister decide to sell the company to Legacy Farms?

My daughter, Alex, had a baby a little over two years ago, and when she came back from maternity leave she let me know that she had done a lot of thinking and that she loves the company and the industry, but she didn’t want to be an owner of Frieda’s. Jackie and I had been thinking about what kind of succession plan we would have, and coincidentally to that, Legacy’s CEO Dan Madsen on an unrelated matter asked if we would ever consider joining forces.

We thought about it, and we decided to get some advice on this, so we worked with a firm that helps companies sell their businesses. At the end of the process of reviewing the more than 100 companies that had an interest in Frieda’s, it actually came back to Legacy Farms. The culture is really important to us, and we know that about 85% of all mergers and acquisitions fail because of a clash in culture, so we put that right at the top. When we asked Dan and his team what was of interest in Frieda’s, they said our branding and our culture.

As an aside, as we went through this process and they met my daughter Alex who was our director of sales and procurement, they recognized her talents and that she was the key to the future growth and success. The first order of business was Dan telling Alex that he wanted her to be a part of his team and that she would get a promotion. She is now vice president of sales and procurement for Frieda’s, LLC.

It’s probably no coincidence that their company name is Legacy, it is a really nice matchup with Frieda’s philosophy of honoring our mom’s legacy.

How would you describe being a successful woman in such a male-dominated industry?

I want to share something that someone else said to me many years ago: I don’t really know of any industry that’s not male-dominated. I think produce was predominately male-dominated because back in the day, farmers were almost all men. Now there are a lot of women farmers, as opposed to them being behind the scenes or only in a supportive role. I have always been a take-charge kind of person. And like my mom, ‘Success came to me because I didn’t know obstacles existed.’ I feel really fortunate that way.

What qualities do you think are important for produce industry leaders to be successful?

Well, I haven’t been in any other industry, so my perspective is unique. First of all, you have to be hands-on. Still to this day, I walk the warehouse often and I notice things because I’m hands-on. That’s super important when you work with produce. You can’t do business with a remote control. I’ve also learned that you can never let go of paying attention to your gut-level reaction. And I think one of the challenges – mostly on the customer side – is that companies have brought in a lot of people who are very data-oriented and analytic-oriented. There is an art and a science to produce. Numbers don’t always tell the whole story. This means that big grocery chains may be solely focused on the numbers, but might not link weather-related issues in production regions, for example. You have to be: eyes wide open.

How did Frieda’s Branded Produce evolve over recent years?

For our first 50 years or so, we took advantage of every product that was offered to us, and eventually, our product line grew to more than 600 products. After all, we were known for introducing more than 200 new fruits and vegetables to American consumers, including Sugar Snap peas, red seedless watermelon, habanero chile peppers, shallots and Stokes Purple sweet potatoes, to name a few.

But as we became more data-driven, and so did our customers, we realized we would be better off if we focused on the best-selling products and the products that consumers were really looking for. When the coronavirus pandemic began in early 2020, it was the perfect timing to implement a more focused product offering. The efficiency in our operation was palpable, and we found the timing was perfect with our clients. We streamlined our offering. And our business grew as our retail customers were on the same page — less is more.

We also used this time to do consumer research to learn about what resonates with consumers. We did a brand refresh to our packaging in alignment with consumer preferences, and the results were amazing. Actually, we have found with this new strategy that our brand grew to have a 30% faster sell-through velocity at retail than the next leading specialty brand on our top-selling items. The most pleasant surprise was that some retailers, who have not purchased from us in years, are now contacting us because they’ve noticed. I guess, fast selling, attractive, good-tasting, quality produce is a great success story.

In this highly inflationary environment, what things has Frieda’s been doing to reduce the financial impact on the business?

I wish there was an easy answer to that. Everyone’s input costs have gone up significantly – pallets, boxes, electricity, wages. You think you better raise your prices, but then there is pushback from the buyer if you already quoted them a price earlier. But, if you keep the original price you’re going to go out of business. Our approach has been to be honest and ask them to be reasonable, show them how our input costs have increased, and then, we chose not to sell to them if they aren’t willing to negotiate or show flexibility. About 10 years ago I predicted the No. 1 challenge for big retailers would be security of supply. Some of them back in the day were quite predatory in the way they approached pricing and quality standards. I told my team I think they’re going to need to be nicer to their vendors. As you can tell, I am honest and direct – I see both sides. And I think those qualities have made a difference.

Do you see rising demand for specialty produce amid increased consumer focus on health?

It’s funny because back in the eighties when I was just working for my mom, I would get invited to give speeches. I remember having a talk called ‘Food as Medicine,’ and talking about how consumers with high blood pressure are trying to cut back on salt. So they’re looking for all these specialties we sell that would add flavor, like fresh herbs and garlic and mushrooms.
We were one of the first companies selling those products, and nutrition-wise, many of the specialty fruits and vegetables we sell are a source of micronutrients. So, I would talk about how the produce buyer may not personally like what we sell, such as purple potatoes, but actually, consumers are looking for those products because of the health qualities. I encouraged buyers to be more open-minded. And, as a woman, I represented the majority of their shoppers, and this gave us terrific credibility. And today, consumers are so much more willing to try new things – more than even just 10 or 15 years ago.

What future do you see for specialty produce?

There are some opposing forces. Most people still get food from a physical trip to a grocery store or they use a service like Instacart, and they buy online. The store can’t handle all these wild products, so I think you’re going to see fewer products in store – the best sellers. Alongside that, there’s a strong and growing local movement – lots of people are going to go direct to the farms. So, you’ve got that movement, and then you have people that want every crazy ingredient.

You have all these different juxtaposed possibilities. I’ve always known consumers vote with their dollars. You have to follow the consumer patterns. How are they voting? Where it used to be double-digit growth, in the past few months online food shopping has declined as a percentage of purchases. So, my perception of the future of the industry is: Don’t assume anything. Don’t do whatever the trend line is. Don’t assume whatever the status quo is — that it will continue. Walk around with your eyes wide open. Be curious and hands-on and notice things. That’s going to be the key to someone’s success in the future.

What are some lesser-discussed trends that you think will be important moving forward?

I’ve noticed more data orientation. In the non-fresh produce and CPG industries there was always lots of data. In the fresh produce industry, most business decisions were based on gut feelings. Now, one trend is data mining, looking for the hidden gems. The second trend is relationships. We have always been a relationship business, but what I’m seeing – and it’s been a bumpy trend line – is that relationships are even more important than ever before. You just can’t make a deal in the produce industry without a relationship. I think that people need to double down on relationships.
Looking ahead to the next decade, what most excites you about what is to come, and what worries you?

What excites me the most is that the compelling story for fresh produce is still the same. After all, everyone has to eat. And eating fresh produce, crunchy veggies and juicy fruits still gets me excited. I’ve always loved the stories of farmers, family businesses and how produce grows. There is nothing like walking a field and experiencing produce growing, firsthand. I don’t think I will ever lose that heart-racing experience.

As far as worries — I would rather characterize them as ‘food for thought.’ How do we keep young people interested in our business? It’s not for the faint of heart, and thanks to mother nature, you can always count on a few hiccups due to weather, climate change and other modern challenges. How do we emphasize the importance of eating whole, healthy, fresh foods as a way to improve our planet’s and our body’s health? How do we keep our business relationships strong and not let the invasion of the ‘number crunchers’ de-personalize our business? Produce has always been a relationship business, and I think it always will be. People do business with people they trust and people they like. We are a people business. That will never change.

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