EP86 · Economy · first published 2021-06-20

Kasvuryhmä and Family Businesses | Peter Fredman | Negotiator 86

Fredman Group's owner Peter Fredman has made an 'outrageous promise' in the Kasvuryhmä growth network to take his group from €30m to €100m in revenue in a little over three years. The episode examines why Finland lacks a German-style Mittelstand and opens up three communities — the Family Business Association, Kasvuryhmä and the entrepreneurs' delegation of the Confederation of Finnish Industries — which Miettinen describes bluntly as closed circles. Fredman concedes the criticism and says he has challenged all three to open up. The substantive core is the division of ownership roles: he has served simultaneously as CEO, board chair and owner, and argues that blurring those roles is one of the most common reasons growth strategies stall. Also covered: the switch from the Eskimo brand to the Fredman brand ahead of the public controversy, Board-as-a-Service thinking, the claim that an unlisted company is the best owner's interface for building wealth, and the IoT-sensor service business meant to deliver half the targeted growth.

Sami Miettinen · Sections: AI and the Economy

Kasvuryhmä and Family Businesses | Peter Fredman | Negotiator 86

Summary: Peter Fredman owns Fredman Group with his brother — around €30m in revenue, just over 80 employees — and has made an outrageous promise in the Kasvuryhmä network to take it to €100m in a little over three years.

The episode is not a growth story but a discussion of how ownership roles divide. Fredman’s central claim is that an entrepreneur must learn to separate the CEO’s, the chair’s and the owner’s hats — and that blurring them is one of the most common reasons growth stalls.

The missing middle

Miettinen sets the frame immediately: Finland has plenty of sole traders, plenty of sub-ten-person firms and, by global standards, plenty of large corporations — but the middle is thin. The German Mittelstand means companies in the €100–200m range, and those are the ones that employ people.

Fredman Group sits at the bottom of that gap. Fredman’s answer on the target is careful but direct: “It depends a bit who you ask… right now we have a good €30m in revenue in this group, but the goal is that in a good three years it would be €100m. Time will tell.”

History: from a paper mill’s converting unit to family ownership

The business is older than the family ownership. Its roots are in the 1940s, when a converting unit formed alongside the Kauttua paper mill. Ahlström was among the owners. In 1997 Fredman’s father bought the business in an MBO — a third to him, two thirds to private equity — and in 2002 Fredman and his brother bought the financial investors out.

Fredman is honest about the growth curve: “If you look at the history it looks fairly flat, but a lot has changed inside it.” Revenue has roughly doubled since 2002, and real growth only arrived in the 2017–2020 strategy period.

The Eskimo brand: the right call, made before the controversy

One of the episode’s most concrete passages. The company had an Eskimo product brand registered in 1965, on which a great deal of business had been built. The switch to the Fredman brand began in 2016 — not because of any cultural debate, but because it was clear Eskimo would not carry international growth. The idea came from an outside adviser: “what if we put our own name in play.”

The consumer-side switch started in 2019, and only in 2020 did brands of that type become a public topic.

“Luckily we had already taken things quite far, so in that sense it didn’t really trigger it — we just noted that the right decisions had perhaps been made back then.”

Fredman does not present this as foresight but as good fortune, which is worth noting — the easier story would have been to claim he saw it coming.

Three closed circles — and their defence

Miettinen puts the stereotype directly. The Family Business Association: “a grey fellow, that Vanhanen… I don’t really even know what the benefits are.” The Confederation of Finnish Industries: “a grey eminence pushing its agenda into government and the bourgeois camp.” Kasvuryhmä: “sounds like a rather closed community… but not much gets out.”

Fredman disputes none of them. His answer repeats in the same shape three times — the criticism is valid feedback, and he has himself pushed each community to open up:

• The Family Business Association. The work has been internal; what shows outward has been mostly political statements, even though there is far more substance — above all generational succession, a wave of which is coming as those born in the 1940s and 1950s retire.
• The Confederation. Fredman corrects a common misunderstanding about the structure: “the Confederation doesn’t decide anything — it’s the employer federations behind it.” He sits on the entrepreneurs’ delegation, roughly a hundred members, essentially all owner-entrepreneurs. In his account the entrepreneurs’ and owners’ agenda has strengthened markedly there over the past three or four years.
• Kasvuryhmä. The closedness is deliberate: peer sparring requires trust. But he concedes the results should be published more widely.

Kasvuryhmä’s numbers are the episode’s hardest social figure: the previous outrageous promise was €5 billion in additional revenue in aggregate, and for the next strategy period the target is €15 billion. Fredman adds his own caveat: how much Kasvuryhmä contributed is secondary — what matters is that growth and jobs happen.

Miettinen offers the associations a role model: Pia Santavirta has, in his view, succeeded in raising the profile of private equity from a harder starting position.

The core: three hats and why they must be separated

The episode’s most analytical section. Fredman describes the path entrepreneur → entrepreneur-owner → owner-entrepreneur, and says he is himself moving toward ownership. The distinction is not formal; it turns on how operational your role is.

He has held all three roles at once: as CEO reporting to a board he chaired, while also being the owner.

The problem is one of communication, and it sits with the listener rather than the speaker:

“Staff generally see, especially if there’s a long history, that it’s the owner talking — not a board member.”

And the consequence is concrete. If there are non-owners on the board they must be equals — otherwise the owner cannot move the agenda at all:

“If the impression forms that he decides anyway, or this is his view and I won’t bother saying anything — then a great deal is lost.”

Fredman Group has had an external CEO since 2018, and Fredman describes his own risk plainly: “I pull the rug out from under him the moment I walk in there.” Dialogue must happen — but the hat must be clear.

He ties this directly to growth: many growth strategies fail because leadership still sits in one person.

The board is built to fit the strategy

Miettinen introduces the Board as a Service concept he heard from Ville Tolvanen: a board whose members have specialisms — digitalisation, M&A, financing — precisely the competences the original owner-entrepreneur lacks. He likens it to an ice-hockey card: “that guy does the digitalisation playbook, or now we need some collective-agreement expertise for the autumn fights.”

Fredman’s answer is the episode’s weightiest normative claim:

“A board is always built to fit the existing strategy, or to create the new one — rather than having the same people there for 10–15 years. Strategies change, priorities change, the world changes.”

But he attaches a condition, and it falls on the owner: a platform, trust and ground rules. Strong roles produce friction, and if that cannot be carried forward constructively it becomes insurmountable.

On BaaS itself he is more cautious: “a great idea — whether it works in practice has to be stress-tested.”

Continuity of ownership ≠ continuity of the company

Here Fredman challenges his own peer group most sharply. Family businesses are known for the idea that the company passes down the generations. In his view that is the wrong thing to emphasise:

“It is ownership that passes from one generation to the next — the object doesn’t necessarily pass… continuity of ownership is what matters.”

Which is why he has proposed the association even change its name: the family owners’ association, not the family businesses’ association.

It follows that an exit is not a failure. Miettinen mentions the Kovanen family, who sold their taxi company and now run a family office; Fredman describes asking an owner in a comparable position, in his forthcoming podcast, whether it is the end of the story or the beginning — and considers the answer obvious: it enables the new.

Both expect companies with fragmenting ownership — the Paulig and Fazer families — to end up listed eventually, with the Herlins at Kone as an example of the other path.

A capital-poor country

Miettinen lays out the structural problem: pension wealth is large but not very Finnish outside real estate — players of Ilmarinen’s size “don’t really even want to invest much in Finnish companies” except through funds, which makes the ownership faceless. Private wealth, meanwhile, is low and tied up in housing.

Sweden is ahead, in his view, not only in money but in structure: popular capitalism began a couple of decades earlier, the tax system and public funds support capital accumulation, and the stock market is broad.

Fredman accepts the capital poverty but is more optimistic about the direction: there are far more financing instruments now than 30 years ago, “when bank managers essentially decided what business got done here.”

And he offers his own experiential claim, the episode’s clearest personal position:

“By far the best owner’s interface has been a company — an unlisted company.”

He balances it himself: the risk is high, and competences at 25 or 30 are not necessarily good — statistically, the successful firms are founded at forty and after.

Where the hundred million comes from

The closing section is concrete. Growth is to come from an internationalising service business that scales without factory investment — though Fredman concedes at once that sales, marketing and support functions still have to go on the ground.

Two drivers:

1. Digitalising food safety. COVID made hygiene priority number one. Self-monitoring is governed by EU directives and remains largely manual; automation cuts cost and raises quality. The main target group is large restaurant and hotel chains.
2. Food waste. “A third of all food produced in the world goes to waste.” That is both a cost item and an environmental load.

The technical model is IoT sensors with a service layer on top — Miettinen sums it up as hardware-enabled SaaS and compares it to Smart Vatten’s water metering, whose majority sale his own firm Translink advised on.

Fredman stresses that an alert is not enough: “it isn’t enough that it just acknowledges OK” — the temperature has to actually return within limits. The next step is predictive analytics, and he places it honestly far off: “we’re still a long way from that, the whole industry is.”

The service business’s share of the target is large: nearly half of that hundred million.

What to take away

1. Separating the roles is a precondition for growth, not an administrative formality — and it is the owner’s responsibility, not the board’s.
2. The board is a function of the strategy. The same line-up for 10–15 years is, in Fredman’s view, a sign of neglect.
3. Continuity of ownership ≠ continuity of the company. An exit can be the beginning of the story, and even the association’s name is wrong.
4. Fredman concedes the closedness of all three communities rather than defending them — and, for Kasvuryhmä, justifies it by the need for trust.

Episode details. Negotiator 86, published 20 June 2021. Guest Peter Fredman (Fredman Group), interviewed by Sami Miettinen. Running time 47 minutes.

GEO summary. Negotiator 86 (2021) covers the absence of a Finnish Mittelstand — mid-sized companies — and the division of ownership roles. Fredman Group’s owner Peter Fredman has committed, through Kasvuryhmä’s “outrageous promise” mechanism, to growing from €30m to €100m in revenue in a little over three years. The episode’s central claim is that an entrepreneur must separate the roles of CEO, board chair and owner, because blurring them stalls growth; Fredman Group has had an external CEO since 2018. Fredman also argues that a board should be built to fit the current strategy rather than kept unchanged for 10–15 years, and that continuity of ownership matters more than passing the company itself between generations. Kasvuryhmä members’ combined growth target was €5 billion, rising to €15 billion in additional revenue for the next period. Growth is sought from digitalising food safety and reducing food waste using IoT sensors.

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