How Frieda's Finest established itself as a major marketer of exotic fruits and vegetables.
How Frieda's Finest established itself as a major marketer of exotic fruits and vegetables.
How Frieda's Finest established a brand name in an industry that had never had one
Frieda Caplan, chairman and founder of Frieda's Finest, has grown a celebrated and thriving company in an industry otherwise known for being both dull and brutal -- the business of selling produce. In a field dominated by generic products and devoid of attention to marketing, she's created a brand identity and persuaded millions of Americans to buy fruits and vegetables they had never heard of. How? -- E.L.
The business of selling fruits and vegetables is tough enough, what with fickle weather, prices that change daily, and wholesale markets that open around midnight. For Frieda Caplan, it gets tougher still. Frieda, as she is known in gustatory circles, is the founder and chairman of Frieda's Finest, a pioneering marketer of exotic fruits and vegetables. In addition to all the usual pitfalls, she must cope with the inherent weirdness of the things she sells: taro root, poisonous in its raw state; passion fruit, best eaten at its blackest and ugliest; and kiwano, the strangest-looking melon ever to land on U.S. shores.
And Frieda has to deal with the likes of talk-show host David Letterman. One night she appeared on his show with a kiwano among her sampler of exotic produce. Frieda sliced the kiwano, and Letterman took a bite. Hunching suddenly at the shoulders, kiwano debris slipping from his mouth, he proclaimed to millions of late-night television watchers everywhere, "That's damn near inedible."
Despite such hazards, Frieda managed to hook America on weird stuff -- or what had seemed weird until she came along. In the 1960s, when most grocery stores sold only canned mushrooms, she helped turn the fresh variety into a national staple. Next she "discovered" the Chinese gooseberry, renamed it the kiwifruit, and helped create a new, global industry. For better or worse, she's introduced spaghetti squash and alfalfa sprouts to the U.S. market. Someday, perhaps, the blood oranges she sells will become the citrus fruit of choice in U.S. homes, and coquitos -- marble-size, mature coconuts -- the all-American lunch-box treat.
"How," asked Fred Ferretti in a column in Gourmet magazine, "can one possibly do without Frieda?"
Her success is a classic example of what happens when an entrepreneur arrives from outside the pale, bringing new ideas to an industry that had always done things its own way. She describes her company as a "market expander." Relying on instinct, simple marketing tools, and her own willingness to keep an open mind, Frieda has taken shoppers and grocers for a 25-year walk on the wild side. Hers was the first small company to brand-label all its fruits and vegetables and did so, moreover, in bright purple. Her four trucks are trimmed in purple; a big purple heart adorns her headquarters and warehouse on 20th Street in an otherwise gritty part of downtown Los Angeles. By courting and coddling the press, Frieda turned herself into a celebrity, the Kiwi Queen. She may be the only produce executive who's been photographed by both People magazine and National Geographic. She was television's original Green Grocer until a legal squabble forced her to pick a new name. Although Frieda's Finest expects revenues this year of only $20 million, the company gets mentioned in the same breath with industry giants.
"She understands publicity completely," says Ralph M. Pinkerton, a marketing consultant in Newport Beach, Calif. Says James Prevor, publisher of Produce Business magazine, "She recognized early on that as a small company she could not compete with the media budgets of the Doles and Chiquitas, but that because of the nature of the items she had, she did have the potential to generate excitement and news coverage."
Frieda virtually invents vegetables. One example: in 1983 a distributor called to say his supply of acorn squash had come in too small, only baseball size. Frieda knew that consumers had gone wild for other so-called baby vegetables. Why not baby squash? She asked for samples and found them delicious. The grower's irrigation system, she learned, had failed at an ideal point in the growing cycle. She convinced other farmers to simulate those growing conditions. In the spring of 1986 her company sold 4,000 cases of the dwarf inventions.
"To be a successful marketer of any kind, you have to be totally open to weird new concepts," Frieda says, sitting at a table in the small garden behind her headquarters. She is at this instant a living logo. Her purple dress blazes in the California sun. She is wearing purple-and-white earrings and a purple pin; she's got a purple marker in her hand and carries a purple cup, filled only with hot water. Behind her, African daisies bloom. In purple. "Just because something hasn't been done before," she says, "doesn't mean you shouldn't do it."
But the kiwano? Has Frieda at last gone too far?
Frieda herself, now 66, has always been an exotic. She founded Frieda's back in 1962, pre-Lib America. Then as now, produce was essentially an all-male industry. Her daughters, Karen Caplan, 34, president since 1986, and Jackie Caplan Wiggins, 31, vice-president for national accounts, say Frieda's being a woman and therefore an outsider may help explain why she hit on so innovative an approach to produce marketing. Produce Business's James Prevor says her gender had a certain PR value as well. "Just the fact that she's a woman in a man's business made her different," he says. "It made her stand out from the beginning."
A contributing factor to Frieda's success has been the national trend toward more variety in grocers' produce departments. In the early 1970s supermarkets stocked an average of 65 different produce items, according to the Produce Marketing Association, in Newark, Del. Today the average is 200, with some so-called superstores carrying up to 375. Some produce managers buy exotic fruits and vegetables as much for their image appeal as for their marketability. "We don't make any money in exotics," says Harold Alston, vice-president of produce sales and procurement at Stop & Shop Supermarket Cos., one of Frieda's major customers. "We never did. We probably throw 50% of it away, and when we do get our money back, we're real happy. But it goes toward that total image as the store that carries everything. I could advertise for six months and never get the image we get just from having somebody walk in and see all these wild items."
Frieda discovered her entrepreneurial skill in 1957, when she was left on her own for two weeks to watch over the Giumarra Brothers wholesale business, one of the scores of produce suppliers that operate out of Los Angeles's three block-long wholesale markets. A buyer for a major chain asked Frieda, then only a clerk, if she'd be able to supply enough fresh mushrooms to support a Thanksgiving advertisement the chain planned to run. Although fresh mushrooms were a specialty and accounted for only a tiny share of Giumarra's sales, Frieda blithely said yes. She was unaware that demand for fresh mushrooms peaked at Thanksgiving, when supplies were most limited.
In the produce business, verbal commitments are as firm as contracts -- produce dies too quickly and prices change too rapidly for buyers and wholesalers to waste time signing and delivering written documents. Frieda hustled, pleaded, and cajoled to secure adequate supplies from growers. In some instances, she loaded her new baby, Karen, into her station wagon, drove to the mushroom farms, helped pack the mushrooms, then delivered them herself.
On April 2, 1962, Frieda opened her own business at the 7th Street Market, specializing in mushrooms. She called it Produce Specialties Inc. and hung a sign with black letters printed on a background of purple, the only color her sign painter happened to have on hand. The color became her trademark. She changed the company name to Frieda's Finest/Produce, Specialties Inc. and recently changed the labels to read Frieda's of California.
Frieda built the company in classic niche-finding fashion; she took on business that mainstream wholesalers turned away. Accustomed to big volume sales, they weren't set up to market exotics. Growers with novel items had nowhere to go. Frieda welcomed them. "What we've always done is put ourselves in a position where we heard things first," she says. "A lot of people couldn't be bothered. We got a lot of ideas by default."
Her cardinal rule: "Always have an open door; always listen to what anyone has to offer."
She listened one day when a Safeway produce buyer paid her a visit. That moment changed American cuisine.
The buyer asked if she'd ever heard of a fruit called the Chinese gooseberry. A Safeway customer had asked about it. Frieda had never seen one but promised to keep an eye out. Six months later, by sheer coincidence, a broker stopped by and offered her a load of Chinese gooseberries.
She called the Safeway buyer, then set out to see if anyone else would be interested in the fuzzy, green, wholly appealing little fruit. In a purple blaze of optimism, she ordered 240 10-pound cases. Over the next four very painful months, she tried to unload them. In the process, she says, she learned some invaluable lessons about the marketing of produce specialties.
She also learned that kiwis have a long shelf life.
What the fruit needed, Frieda decided, was some good PR. She gave the gooseberry a new name, one suggested by a broker at the market: kiwifruit, derived from kiwi, the name of a New Zealand bird and the nickname New Zealanders use to describe themselves. She convinced Vickman's -- a popular produce-district restaurant -- to make a kiwi pastry and persuaded produce buyers to display kiwis in their stores. She developed posters that explained to shoppers what a kiwi was and how it could be used. In retrospect, this seems the most obvious of steps. At the time, it was a path-breaking idea.
Frieda impressed one influential retailer, Dick Gladden, the retired president of Alpha-Beta Stores Inc., who was then the chain's director of produce operations. To help Frieda entice shoppers to try this new fruit, he sold it at or below his own cost. "To be honest with you, I really liked Frieda," he says. "She was a female at the produce market when there weren't any. She was down there at one or two o'clock every morning, working her tail off."
Frieda also persuaded California growers to give the fruit room in their fields, and in 1971 she introduced the first domestic kiwi. In the late 1970s and early 1980s a new breed of hip, nontraditional chefs likewise discovered the kiwi. The business took off and has yet to peak. "We call the kiwi our 18-year overnight success story," Frieda says.
Of the lessons taught by the kiwi, the most fundamental was this: once a specialty becomes well accepted by consumers, it ceases to be a specialty. As demand for kiwi grew, growers around the world began planting it, glutting the market and turning it into a commodity. Frieda's still sells kiwis, but it isn't the money-maker it once was; the company can't compete against the bulk wholesalers now dominating the kiwi business. The same thing happened with fresh mushrooms. Although Frieda's still sells the exotic varieties, the company halted sales of common mushrooms in 1981. "We breed our own competition," Frieda says. "We know if something takes off, we'll only have the franchise on that business for a limited period of time."
The kiwi also underscored the crucial need to win the hearts and minds of produce buyers -- more crucial even than courting the shoppers themselves, whom Frieda believes to be far more adventuresome. "The single key to success is the produce man in the store," Frieda says. "Unless he's convinced, specialties haven't got a chance."
But how do you convince him? Especially when, as is sometimes the case, he may not make a dime from selling your product?
The cup on Karen Caplan's desk says: The Boss. A Dale Carnegie devotee, she talks in terms of DBMs (dominant buying motives) and PIs (primary interests). She also studies neuro-linguistic programming: the audio, visual, and kinesthetic characteristics of people. In assessing her own personality, using a personality-profiling technique called Performax, she describes herself as results-oriented, aggressive, pioneering, bold, inspiring, and a host of other exhausting traits. She is the Sigourney Weaver of the alien vegetable business. "Nothing's tough," she says, eyes large and frank. "Things do not faze me. I can sell anything."
Something Karen does must work. When she became president, sales were $11 million. In the three and a half years since, the company's sales have increased by more than 60%. She wants her salespeople, all Dale Carnegie graduates, to analyze the buyers they talk to, learn what makes them tick. If a client's PI is to look good to his boss, make him look good; if her DBM is to get out of the office early, help her do so. She employs an all-women sales staff. She asks, "If you were a buyer, would you rather talk to a woman or a man?"
This psycho-emphasis aside, however, the company takes practical steps to overcome the balkiness of buyers. Karen personally conducts retail supermarket seminars for produce buyers and managers in cities around the country, first touring and inspecting their stores, then candidly critiquing them in open assemblies. She lectures, too, on produce theory -- how having more variety and better displays draws customers to a store and boosts the store's overall profit, if not the profit of the department itself. A major goal of the company's marketing strategy is to position Frieda's as the authority on the subject of specialty produce. "We not only sell specialty items," Karen says. "We counsel produce managers on how to be successful."
She believes one of the company's most effective tools is the weekly "Hot Sheet," a one-page bulletin on purple paper that the company sends to some 2,000 produce people and 1,000 food editors and writers. (The company also publishes "Club Frieda," a newsletter for consumers.) Frieda writes the "Hot Sheet" each Wednesday afternoon, telling readers what's selling well, how the weather is affecting growing regions, and what the supply status is for various items.
Frieda, seated in the company's test kitchen, opens a huge binder of past "Hot Sheets." "This is probably the major weapon we have," she says. She flips the pages to find the most important issues. Each spring she ranks the 60 items that sold best during the previous fiscal year. In July she presents a tally showing what the top-15 items were in each of the preceding 12 months. "If you're introducing a retailer to your program, he's going to want a sure thing," Frieda says. "He doesn't want something that's going to bomb."
One of the hottest "Hot Sheets" contains the company's annual analysis of the letters that consumers write. The company takes these letters seriously and considers them tangible, invaluable assets. Every Frieda's label invites shoppers to write for recipes and advice. Karen Caplan reads every letter. The company's marketing services division, which she founded, answers all the letters. Shoppers who complain receive a full refund.
In the January 22, 1988, "Hot Sheet," Frieda announced the company had received 14,107 letters in 1987, up 22% from the year before. Compliments and complaints comprise a tiny fraction of the total: 88 consumers complained and 332 sent their compliments in 1987, according to an unpublished tally. Requests for recipes and information made up the difference.
Such attention to the consumer is a novel practice in the wholesale produce business. As far as most wholesalers are concerned, their jobs end once the produce is loaded into the buyer's truck. On the most elementary level, these letters help Frieda's keep tabs on quality. The letters, for example, once helped the company figure out why consumers were complaining about the taste of cherimoyas, a tropical fruit. The company tested several varieties and discovered they had markedly different taste characteristics.
The letters have a more subtle value, however. They help the company court the all-important produce buyers.
Letters that mention particular stores or chains are forwarded to the produce buyers in charge. This adds that extra bit of persuasion, concrete evidence that shoppers in a given area really do want exotic produce. "One of the biggest problems you have as a retailer in a supermarket chain is trying to get your 116 stores to order all of these specialty items and stock them," says Stop & Shop's Alston. He, too, needs a way to demonstrate consumer demand and sends the letters on to the managers in the appropriate stores. "It's a value to Frieda," he says, "but it's a value to me, too, because now at least I know the customers are interested."
In many cases, produce buyers can purchase their exotic fruits and vegetables more inexpensively from other wholesalers. They say they buy from Frieda's, however, because of the package of services the company provides.
For one thing, Frieda's offers a predictable standard of quality. The company trusts only a few growers to pack under the Frieda's label and packs the rest itself at headquarters. The plant pathologist, Jennifer Armen-Bolen, continually tests the items stored in the warehouse to make sure the quality doesn't erode. At the peak of the squash season, the different squashes are taste-tested every day. When Frieda's own buyer, Greg Hess, makes his early-morning rounds through the L.A. markets, he is treated like a celebrity, lots of backslapping and toothy smiles. On one recent tour a wholesaler told him not to bother looking at his stock that morning because it wasn't good enough.
The company, moreover, markets its wares as product lines, not individual commodities. This offers produce buyers the luxury of one-stop shopping for hard-to-get items. Frieda's oriental foods line, for example, includes everything from egg-roll wrappers to precut vegetables for stir-frying. The company supports these product lines with merchandising bulletins that propose display and demonstration strategies, and with promotion packages including camera-ready advertising materials for use in newspaper ads.
This year's Chinese New Year package for buyers included Frieda's logos, product names, and drawings of serpents, 1989 being the year of the snake. As an added incentive, the company ran a Chinese New Year sweepstakes, offering prizes ranging from a set of Frieda's posters to a fax machine. You win by accumulating points; you get the most points, up to 500 at a shot, by listing Frieda's products and using the Frieda's logo in your newspaper ads.
"The price is absolutely high," says Richard Spezzano, vice-president of the produce division of The Vons Cos., a large supermarket chain based in southern California. "Most of the time I can buy cheaper, but I'm getting a marketing program. I get the 'Hot Sheet,' I get labels, recipes, 'Club Frieda.' Her color is marketing; when you see purple, you know exactly what it is. She's on TV, she's on the news all the time. That's marketing."
Frieda's sells more than 300 items now: jicama, cherimoya, passion fruit, purple potatoes, elephant garlic, tamarindos, tamarillos, cilantro, sapote, babaco, chayote squash, and burpless cucumbers. No one at Frieda's goes out looking for strange produce. "People think we travel all over the place," Frieda says. "We don't. Everybody brings us things."
She's in the test kitchen again. She speeds over to a bank of shelves. "Come here," she commands. But nicely, in a motherly way. "I want to show you something." She plucks a tarantula from an envelope on the shelf.
This is the part of the business Frieda likes best, the newness and discovery. She's left the business of expanding the company to daughter Karen, who is more given to dreams of bigness and power ("I want to be famous," Karen confesses). "I have my original excitement," Frieda says. "This is where I get turned on. I don't get my excitement from thinking about size. I get my excitement from innovation."
She holds the tarantula in her palm. She breaks off one of its legs. "This," Frieda says, "is a pepper. From Nigeria. You crush it, and inside are these peppercorns."
Frieda rummages through another envelope. She holds up two lilliputian heads of garlic, each fully mature but only the size of a small brussels sprout. "These are from Nigeria, too," she says. "Aren't they adorable?"
When Frieda thinks something's going to be a hit, she says, "I feel it in my elbow." The company is small and nimble, the process of introducing new items refreshingly direct -- marketing done at treetop level. Go by the gut, then let it fly. It leaves the company perpetually in a test-marketing phase. As Karen puts it, "Test marketing and regular marketing are the same thing at Frieda's."
Consider the company's April 1988 introduction of the coquito, the tiny, coconutlike fruit of the chilean palm. A grower sent samples, hoping Frieda's would like them and order more. "We just put them in the kitchen on the shelf," Karen says. "We waited to see what people's reactions would be."
The staff fell in love with them. A produce buyer wanted to place an order as soon as he learned of them. Frieda's started promoting them to food editors and produce buyers. "Now, we can't get enough of them," Karen says, conceding, however, that some customers balk at the price -- about $6 retail for a six-ounce package.
Some fruits and vegetables dearly loved in their native cultures arrive at Frieda's test kitchen but just don't make the cut. The durian, for example, is treasured in Thailand. The sample sent to Frieda's had porcupinelike spines; inside, it had the aroma of a sewer on a hot day. "We cut it open, and -- you cannot imagine -- it just stank. It had this cheesy texture. When we threw it out, we took it all the way to the dumpster."
Frieda's elbow is not foolproof. Some products have been out-and-out failures. Her fruit-flavored fortune cookies bombed everywhere except Dallas, one of the few places where produce buyers could be persuaded to stock them. Some shoppers there, however, were rumored to have bought the cookies for their dogs. Colored walnuts also failed. Produce buyers refused to see either item as anything but a seasonal novelty.
But if colored nuts and fruit-flavored fortune cookies fail, why does this kiwano thing persist?
The kiwano is the Elephant Man of produce. The only things the kiwano shares with the kiwi are its New Zealand origins and three letters of the alphabet. It is a mottled orange, exactly the color of boiled lobster, and is covered with pointy horns that rise from its skin like spikes from the skull of a punk rocker. Cut it open and the view is no better. It is packed with masses of emerald-green seeds. At its best it tastes like cucumber soaked in lemon juice. Even the company's PR officer finds it hard to warm up to a kiwano. In a letter accompanying a shipment of three, she suggested using one as a paperweight.
Yet Dominick's Finer Foods, a 95-store chain of supermarkets in the Chicago area, sells 50 cases of kiwanos every week. Harold Alston of Stop & Shop admits it "tastes terrible," but his chain sells it, too.
Herein lies the Frieda trump, the card to play after all the other cards -- taste, nutrition -- have been retired.
"You sell the sizzle," says Karen. Or in this case, the horns.
The kiwano sells as a novelty, the fruit equivalent of a wax nose and mustache. Use it as a centerpiece. Scoop out the insides and fill the shell with something else, something good. Send a basket to the IRS. "If you want to have a dinner party and be a little exotic," says Alston, "that's the thing to put out there."
But he's got one last piece of advice. "Just don't sit on 'em."* * *
Erik Larson is a San Francisco-based free-lance writer.
'WHAT CAN I DO FOR YOU?'
The Frieda's secret: give retailers and shoppers what they need
In the beginning there was the produce guy (and he was a guy), whose idea of marketing was bringing his broccoli to a store and putting it on a shelf. You want some? Fine. No? That's OK, too. If his stock got sold, he'd bring more. If not, he wouldn't.
Frieda Caplan, it might be argued, changed all that. For one thing, she employs an all-women sales force in a business in which wholesale buyers are male. More important, she decided she could exploit a produce industry niche -- specialty items -- and take steps to separate herself from the generic lot. She could offer not just mushrooms, but Frieda's mushrooms. And rather than simply throwing them on a shelf and waiting for customers to walk down the vegetable aisle, she realized she could actually market them.
The core of the company's marketing strategy? Add value to the products -- from the perspective of consumers and retailers alike. The company helps retailers to sell Frieda's products and to leverage specialty produce for greater storewide sales. And it offers consumers any information it can to help them enjoy Frieda's not-always-recognizable fruits and vegetables. Here are some of the company's value-adding tools:
* Explanatory labels. When Frieda introduced kiwifruit, she developed posters and then labels that explained to shoppers what kiwi was and how it could be used. Now, such information is integrated into all her packaging.
* Correspondence. Every Frieda's Finest label invites shoppers to write for recipes and advice, and every letter gets a personal answer. Shoppers who complain get a full refund.
* Newsletter. The company publishes "Club Frieda," a free newsletter for any consumer who asks to be on the mailing list.
* Seminars. Company officers offer free consulting services, critiquing stores and providing ideas in chainwide seminars.
* Product selection assistance. Frieda's produces a weekly "Hot Sheet" newsletter, which tells what's selling.
* Bulletins on display and demonstration. Frieda's does the thinking for store produce managers, providing them with product-specific strategies for merchandising.
* Advertising assistance. Promotion packages come with in-store merchandising aids and with camera-ready advertising materials for use in newspaper ads. -- The Editors
"Strange Fruits" by Erik Larson. Published in Inc. magazine, November 1989 issue. Copyright © 1989 by Erik Larson. All rights reserved.