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Daughter Prepares to Chair at Ruiz Foods

What a difference a decade makes. The past 10 years have brought a blend of stability as well as change to Ruiz Foods and the Ruiz family of central California.

Fred Ruiz’s leadership has propelled his El Monterey brand into the country’s top choice for frozen Mexican foods even as he is preparing to leave the business he co-founded in 1964. He’s delighted that his 37-year-old daughter, Kim Ruiz Beck, is readying herself to serve as chairman and work in tandem with a non-family president and CEO whose strengths balance her own.

And Kim’s younger siblings – who’ve dubbed themselves RG3 (Ruiz Generation Three) – are actively making financial decisions to position the 39-year-old business for aggressive competition with international corporations hungrily eyeing Ruiz’s market share.

Kim has spent the past decade learning every department in the family business. She managed sales, marketing, research and development, human resources and logistics. She also returned to the classroom, earning a master’s degree in organizational development because she knew Ruiz Foods would benefit from that knowledge.

“I’m never going to be an expert in the finance department,” says Kim, who holds an undergraduate degree in marketing. “My job is to bring very talented individuals together and get them to perform as a team.” Empowering a core of strong managers to handle day-to-day operations freed her to focus on strategic initiatives, always a key challenge for top executives.

Kim was named vice chairman in the fall of 2001, a promotion that reflects her father’s confidence in her leadership ability. Her responsibilities include working with the board of outside directors and the sibling partnership group.

She is preparing to pick up her father’s duties when he retires in five years at age 65. At the suggestion of a consultant, Fred is easing out of Ruiz Foods. Each year he’ll cut one day a week from his work schedule to gradually distance himself from the company he launched with his father, Louis, 84, the chairman emeritus.

Fred has been using his time away from the business for golf and to serve on the boards of non-profit organizations. He’s also been active in the Institute for Family Business at California State University, Fresno. It hosts seminars and programs that bring together owners, successors and families to share experiences and brainstorm.

“Family business is a very private affair,” says Fred. “When you go to these institutes, it’s semi-rewarding to realize all family businesses have their issues.” The biggest challenges for Ruiz Foods have been preparing for the succession of leaders and successfully managing growth. A decade ago, annual sales of frozen Mexican treats such as burritos, tamales and enchiladas totaled $94 million. That figure has nearly tripled in the past 10 years, thanks to astute leadership, the growing population of Hispanics in the United States and Americans’ increasing familiarity with Hispanic foods.

Ruiz Foods’ El Monterey entrees are the best-selling frozen Mexican foods in the country. About 40 percent of sales are to supermarkets, and the balance is to restaurants, warehouse clubs and competitors. The market has consolidated considerably in the past decade, Fred says, noting that Ruiz Foods’ competition was once small, privately held manufacturers. Today, it’s multinational corporations.

Ruiz Foods in comparison is a dot on the map with about 1,200 employees, up from 800 a decade ago. Nearly all work at the company’s headquarters, a 300,000-square-foot facility on 40 acres in Dinuba, a central California town near Fresno. Fred and Kim anticipate building a second site in another part of the country in two or three years, perhaps in connection with an acquisition, to aid their national distribution and production.

The company is thriving, yet Kim insists she does not want to oversee that growth as president and CEO. That post has been held since mid-2002 by John Signorino, who came to Ruiz Foods from sunflower seed marketer David & Sons, part of ConAgra Foods. He had also worked for Anheuser-Busch Inc.

Kim and Fred felt Signorino was an ideal leader for Ruiz Foods because of his experience in organizational leadership and because he had successfully managed a food brand. It was essential to them that the new CEO respects the unique aspects of a family business.

“He has an appreciation for the differences between a big company and a privately held company,” Kim says. She also wanted a chief executive willing to share his business knowledge with her through mentoring and provide feedback. The Ruizes have a history of hiring top executives like Signorino who have honed expertise that family members lack.

Kim continues to sharpen the leadership abilities she’ll need to succeed her father as chairman; a post he feels will capitalize on her talents. She serves as the bridge between the business, the board of directors and the family. As Fred’s oldest child and the one most active in the business, she also leads the third generation of Ruizes.

Fred has been gifting shares to his four children to boost their involvement in the business and transfer ownership. His children, who now own the company, leveraged stock to build a 55,000-square-foot freezer that Ruiz Foods needed. Their willingness to take a financial stake in the company, Fred says, “is a sign to the organization that the family very committed to the organization and their personal careers.”

The four members of RG3 are Kim and her youngest brother, Matthew, 17, a high school senior who’s spent summers at the Ruiz Foods factory; sister Kelly, 32, who remains involved with the board but not daily operations; and Bryce, 27, who expects to return to the family business this spring after completing his MBA. His undergraduate degree was in food science and he grew up working in the business.

Bryce and Kim got a valuable lesson in the pitfalls of business about five years ago when Ruiz Foods lost a customer that accounted for 20 percent of its sales. Fred resisted layoffs, saying, “We’ve got to get the business back so we’re not going to downsize completely. We’ll tough it out.”

After three years and three painful bouts of downsizing, Ruiz Foods recovered – but at a cost of morale and the bottom line. “We put the company at risk by not cutting back right away to sustain profitability,” Fred says. “It took three years to accomplish what should have been done in a few months.”

The silver lining for him was that his children learned from the outcome and were strengthened as leaders by the experience. Kim agrees: “We really pull together in tough times and do what needs to be done…. Quitting’s not an option, so you do what it takes.”

As Fred loosens his control on the business he founded, he feels increasingly confident that his children’s dedication bodes well for the future of Ruiz Foods and the Ruizes themselves.

“There’s something magical about a family that’s been able to grow a business and keep it together,” he says.

The original profile on Ruiz Foods was published in the July 1993 issue of The Family Business Advisor and can be found by searching the articles index at our web site.

 

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