The Fresh Connection – The New Normal (Covid-19 crisis)
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The Fresh Connection – The New Normal (Covid-19 crisis)
The Fresh Connection: The New Normal1
April 2020, home office, Rotterdam, The Netherlands
It was some three months into the global Covid-19 crisis now. All over the news, in meetings and
family conversations people suddenly started talking about ‘the new normal’. Toni Rainbow, CEO of
The Fresh Connection, overlooked the Maas river from his apartment and realized that it almost
seemed like he could hardly even remember what ‘the old normal’ was like. For the last three weeks,
he had only been to the factory on a very limited number of occasions, complying with the rules of
“social distancing”. All meetings were taking place online, via videoconferencing.
The recent months had been incredibly hectic, a true rollercoaster of events, with such a tremendous
impact on society, politics and business that some people, jokingly or not, even had started talking
about the time BC (Before Corona) and AC (After Corona).
At The Fresh Connection they had their fair share of incidents as well: trouble with sourcing of
components from some of the suppliers, enormous swings in demand from retailers impacted by the
hoarding of products by consumers in supermarkets, and unfortunately also some of the workforce
affected by the virus itself.
But all in all, Toni was not too unhappy with where they stood now, as a company. At least, he and
his team had managed to make things work somehow and the company had been able to survive (so
far…).
Even though nobody knew how much more time this could possibly take, it was now time to look
into the future. To the time AC, as those other people would say. What would ‘AC’ look like and what
would it mean for the company? Tomorrow he would once again have his weekly videocall with Bob
McLaren, his boss. Toni had decided that the best was that he should show his most proactive side,
so he had proposed ‘AC: the new normal’ as an agenda point for the next meeting. Bob had happily
accepted the proposal and was looking forward to a fruitful discussion.
1
This case was written by Ed Weenk MSc PDEng, with the support of Chuck Nemer CPIM CLTD CSCP MA, as the
basis for teamwork and class discussion. The case is not intended to serve as endorsement, source of primary
data or illustration of effective or ineffective management. The case, though based on realistic events, is
fictionalized. It links to the cloud-based environment of The Fresh Connection business simulation game, as well
as the accompanying book “Mastering the Supply Chain”. Any resemblance to actual persons or entities is
purely coincidental.
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The Fresh Connection – The New Normal (Covid-19 crisis)
The Fresh Connection
The Fresh Connection, or TFC as it was colloquially known under its employees, was founded more
than a hundred years ago in the Utrecht area, in the center of The Netherlands. Initially it was a
distributor of a brand of locally produced drinks, serving to a wide range of stores. In the early days,
it was in fact only connected to this one particular drinks brand and responsible for distribution in
one particular geographical area.
Later on, The Fresh Connection started developing its own drinks, focusing particularly on fresh fruit
juices, expanding the amount of SKU’s in the assortment. The company was now no longer an
exclusive partner to the other brand, but it positioned itself as a premium juice brand in its own right.
Their consumer brand “Fressie” and the associated range of value-for-money fruit juices had
achieved to develop into a classic household name and a trusted value for consumers.
Consumers and customers.
TFC’s products aim at the wider consumer market. It sells to a limited set of retail customers and it
supplies those retailers directly, typically to their central warehouses. If enough product of the
agreed specifications is in stock, then the delivery is made on the next day after the customer places
an order.
Products. The Fresh Connection provides a modest range of flavors, such as Orange or OrangeMango in different pack sizes, such as 1-litre cartons and 0,3-liter PET bottles. The finished goods
have, from the moment of production, a shelf life of 20 weeks. The customers claim a significant part
of these 20 weeks, usually between 60 and 80%. This leaves The Fresh Connection with a total shelf
life between 20 and 40% of these 20 weeks. In case the shelf life expires, the product will
unfortunately have to be destroyed.
Product storage and distribution. The Fresh Connection products are stored on pallets in the
finished goods warehouse, also called the outbound warehouse. They stay there until a delivery is
made, or until their shelf life has expired. The Fresh Connection does not have its own fleet to deliver
to its customer’s distribution centers and instead outsources the transportation to an extremely
reliable partner.
The production processes. The Fresh Connection manufactures all the products it sells itself. The
fruit juices are mixed in a mixer and immediately after, they are bottled using a bottling line. Mixer
and bottling line are part of The Fresh Connection’s equipment. The different pack sizes are bottled
on the same line.
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The Fresh Connection – The New Normal (Covid-19 crisis)
The components. A finished product consists of two main components: the packaging and
concentrated fruit juice (pulp). A bill of materials that can be found within the system lists what
quantity of which component is used in a finished product. The formula - the fruit-pulp mix and
additives that give the fruit juices their unique flavor – has been one of the most closely-guarded
Fresh Connection secrets for over a century.
The suppliers. The components are purchased from suppliers. The packaging material is bought from
local and regional suppliers. Pulp is acquired either from fruit traders or producers from across the
globe. Each supplier has its own characteristics regarding for example size, basic component price,
lead time and reliability.
Component storage. The components that are delivered to The Fresh Connection cannot always be
immediately used in production, that is why the company has a raw materials or inbound warehouse
to store them. Packaging material is delivered on pallets and stored in this raw materials warehouse.
The warehouse also holds fruit pulp, if it is delivered in drums or IBCs (Intermediate Bulk Containers;
small tanks that hold 1,000 liters of pulp and are the floor-size of a pallet). The fruit pulp that arrives
in tank trucks is pumped into a tank yard. The pulp also has a restricted shelf life, although much
longer than the shelf life of the produced fruit juices (once water is added the shelf life reduces
drastically). Once expired the pulp will be destroyed.
The overall supply chain of The Fresh Connection looked like the chart shown in Figure 1.
Figure 1: the supply chain of The Fresh Connection
Organization. In terms of the management of the company, The Fresh Connection had a classical
functional structure in place, the Board consisting out of 5 members:

Vice President of Sales, heading the commercial side of the company

Vice President of Operations, responsible for warehousing and production
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The Fresh Connection – The New Normal (Covid-19 crisis)

Vice President of Supply Chain, responsible for planning

Vice President of Purchasing, taking care of the supply side of the company

CEO, the final responsible for The Fresh Connection
Each VP had some area leaders reporting into them, but as a Small-Medium sized Enterprise (SME),
the organization was in fact very flat. The Board had weekly operational meetings every Monday
morning with the main team leaders and typically had quarterly meetings to take a look at the longer
horizon.
Getting ready for the videocall with Bob McLaren…
Toni Rainbow got himself a glass of fruit juice. After Bob McLaren had confirmed his interest in the
discussion point about the business post-Covid, Toni had asked Jaqueline, the Head of Marketing for
the Group to which TFC belonged, to send him her thoughts about what the future juice business
could look like. She had been very productive and imaginative, Toni thought, as he was going through
the information he had received from her.
Hello Toni,
First of all, I hope you and your dear ones are OK in these difficult and strange times. I heard
even some of the workers at TFC might be affected by the Corona-virus, how terrible! Please
know that Bob asked me to tell you that from the Group we’re here to provide support to those
people if necessary, so just let us know, OK? Please do, because Bob is really taking this one
seriously.
Even though it seems other priorities might exist at this stage, as per your request, pls. find
below my thoughts on “the new normal”. FYI, I have been going through some industry reports,
I have spoken to some of our customers and studied reports from some of the big
consultancies Seems like we will have quite some thinking to do, I think it’s not just “the new
normal”, it’s “the new us” as well!

Out-of-home: across the board, there is a lot less travel and companies observe a big
reduction in out-of-home consumption. Numbers mentioned oscillate between as little
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The Fresh Connection – The New Normal (Covid-19 crisis)
as 30% up to as much as 60%. If this is only temporary and will bounce back after the
so-called lockdowns are over is not clear yet. Some sources think it will be back to
normal between 6 and 12 months after lockdown is over, others fear that “the new
normal” means this could be pretty much permanent, especially for local and regional
car traffic;
 for us, the most directly affected is our customer Dominick’s, the chain of gas
stations;

Economic problems at the family level: obviously many families are suffering
because of the recent crisis. Retailers are finding a shift in demand towards lower
priced products, some speak of a 10-30% increase. Potentially, there could also be an
impact on variability of demand throughout the month, since particularly the people who
lose their jobs now, might be forced to do their shopping only around the time they get
their Unemployment Check paid.
 for us this could affect our sales to our customer Land Market since they are a
Discount Supermarket chain, as well as the lower priced products at Food & Groceries.
We might also look into developing additional products into this category;
 internally, I could see clear implications in terms of increased pressure on costs:
rationalization of the product portfolio (categories), and the need for identification of
cost savings along the entire supply chain, including our own operations and logistics.
Potentially this would even include a great opportunity for pushing towards further
digitization in our supply chain.

Healthy food: since Covid-19 is basically a health-driven crisis, there seems to be an
increase in attention from consumers for products related to health and wellbeing, such
as vitamins, minerals and supplements. Although this is still a niche segment, most
sources indicate double-digit growth;
 for us this could mean an increase of sales for our Vitamin C products. We might
also consider developing more products for this same category.

Hoarding: you surely remember the awful scenes at the supermarkets some weeks
ago with people getting into fights about who would be the one getting their hands on
the last packs of toilet paper, hand soaps, etc. Turns out that retailers in response to
this are now defining a new product category of “hoarding products”, which are prone to
potential hoarding and will get separate treatment in the retail outlets, e.g. by putting
maximum purchase quantities to consumers for these articles;
 honestly speaking, I’m not sure yet what this might mean for us. Who knows if juice
would potentially enter into this category, and we need to act now. Or, because it
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The Fresh Connection – The New Normal (Covid-19 crisis)
doesn’t enter into the new category, we might be missing out on a bit of attention by the
retailers, since they will be focused a lot on this new category and its implications for
the time to come. In any case, we know it’s gaining visibility in the retail world, even
though the outcome might still be highly uncertain, but we should follow it closely if only
just to see where this is going.

Consumer awareness about people and planet: due to Corona, many experts
expect increased consumer awareness for the world’s larger problems, such as public
health, climate change and inequality. Possibly, reinforced by new legislation in some
places. This may lead to more attention for brands who show their positive impact on
for example society and the environment;
 for us this could mean that we should critically look into what position we want to
take here, e.g. with respect to existing products and categories. Potentially an
accelerated move towards becoming more socially responsible, or even becoming
circular?
 additionally, but I’m not such an expert in that area, I would imagine “responsible
sourcing” gaining relevance, i.e. training / educating / auditing / controlling / certifying
suppliers.

Social Distancing: the term “social distancing” is becoming commonplace very fast
now and even though different governments seem to hold different standards about the
distance between people to be maintained, it seems a reality, particularly in the short
and medium term.
 for us I could see this negatively impact current productivity levels in our own
production, so ultimately affect our total available production capacity. If people cannot
get within a certain range of each other, then how would that impact their work at the
machines we have, or in our (tight) warehouse spaces?
 although we’re too small a company to be greatly “unionized” and no pressure is to
be expected from that side, I could even imagine individual people from our fixed
workforce having fear of getting back to work…

Reshoring: the Covid-19 crisis is showing in a pretty painful way that there are also
some downsides to globalization. As a response, many companies are reconsidering
their supplier footprint and focus sourcing on a more regional or even local basis.
 for us, I see various potential implications. We could of course consider the same as
other companies thinking about reshoring: wouldn’t we be better off with more local
sourcing of raw materials? If we would want to do that, we’d better be fast, because it
might then get crowded on the local supply side;
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The Fresh Connection – The New Normal (Covid-19 crisis)
 on the other hand, this movement of reshoring might also affect our current far away
suppliers. They might potentially see demand for their products to other regions drop,
so we might in fact be able to get much better deals as a consequence.

Accelerated adoption of e-Commerce: in many places citizens are discouraged or
even not allowed to leave their homes, due to the lockdowns. This is causing a huge
increase in online grocery sales. The phenomenon of e-Commerce itself is of course
not new, but this health crisis is speeding up the process big time, some sources even
speak of this being the tipping point for grocery e-Comm. One can see the emerging of
new specialized online retailers in the retail landscape taking a bigger share.
Also, there is the emerging of more sophisticated omni-channel approaches by
incumbent brick-and-mortar grocery retailers and, as a consequence of this increased
complexity on their end, they seem interested (or even obliged) to pushing part of the
complexity back upstream into the chain towards e.g. logistics providers, but also
suppliers like ourselves;
 for us, I could see new potential customers, i.e. the specialized e-Comm grocery
retailers, with subsequent increase of potential demand (think plus 30-50%);
 in addition, I think we should seriously consider the opportunity for developing new
value propositions towards brick-and-mortar retailers, such as supporting new stuff like
BOPIS (Buy Online Pickup In-Store);

Accelerated adoption of robotization: due to the ‘social distancing’, many companies
throughout the supply chain (producers, logistics operators, retailers) are implementing
robots. This is done not only for product handling at factories and warehouses, I have
also already seen examples in delivery and even at stores. As with e-Comm, some
people are already talking about the tipping point for the large scale arrival of robots;
 for us, I think we need to evaluate if such technology is necessary for us and/or
could help us become more efficient or effective;
 secondly, and maybe even more importantly, we need to find out how likely it is that
robots will be implemented if in our downstream supply chain and evaluate the potential
impact for further standardization of packaging, labeling, but also e.g. implications for
our whole internal picking-&-packing process.

Covid-products: maybe a bit of a crazy one, but shouldn’t we consider developing
specific Covid-related products, like some other manufacturers are doing? Frankly
speaking, I don’t see us producing masks or ventilators, but wouldn’t there be assets at
TFC we could take advantage of?
 for us, I could see us using our mixing or bottling equipment for other products.
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The Fresh Connection – The New Normal (Covid-19 crisis)
Think specific drinks for hospitals or homes for the elderly. Or maybe even plain water.
Or soap or other hygiene products. My hunch at the moment is that there might be
interesting additional sales potential there.
As said, I think there’s quite some thinking we need to do. It’s a pity that the occasion that
sparked the thinking is so sad, but I’m really excited about where this could take us. Happy to
contribute where and when I can, you can count me in!
Best, stay healthy, and please remember to give some thought to Bob’s offer about providing
support for your workforce. Looking forward to continuing the conversation, talk soon!
Jaqueline E.
Figure 2: the email from Jaqueline, Group Head of Marketing
Although not on a flipchart this time, but on a virtual whiteboard he was preparing for his videocall,
Toni had written a large question mark. Next to it he wrote the words “AC: the new normal (the new
us?)”. He had agreed to speak with his own Board in a few hours from now, to prepare for the
meeting with Bob tomorrow morning.
The information from Jaqueline was partially ambiguous, some of it even contradictory. Not because
of her, of course, but because of the different trends and developments going on at the same time.
And the fact that no one knew how much longer the existing pandemic would last. And if there
would be a second wave. Or a yearly return of the virus.
It seemed to Toni that there were a number of urgent topics they needed to get more clarity on:

Customers, products and categories: what about the potential implications of the ‘new
normal’ for existing product categories and products. What about the potential development
of new categories and/or products? And of potential new e-Commerce customers? What
about the implications of all of this for future demand?

Capacity: as a consequence of changes in products and categories, and therefore of demand,
which potential implications could there be for production capacity? Existing production
capacity of course had its limitations, capacity was constrained and expansion, if required,
could be done in many different ways and would certainly take time. Which methods would
make sense and why?
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The Fresh Connection – The New Normal (Covid-19 crisis)

Cost: if future developments would indeed push (certain categories) towards lower-price
products, how could cost in the chain be reduced accordingly in order to maintain healthy
margins? Could digitization play a role here and if so how?

Value propositions: what could be the elements of new value propositions towards e-Comm
and what would be the potential implications of these new elements for TFC?
It was time for some good old-fashioned what-if thinking…
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The Fresh Connection – The New Normal (Covid-19 crisis)
Exhibit 1: template for reporting on scenario’s
After: Weenk, E. (2019) Mastering the Supply Chain, Figure 14.4
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The Fresh Connection – The New Normal (Covid-19 crisis)
Annex: getting access to TFC data
(Please note: if you already have an account, then you only have to follow steps 4-6.)
To get access to The Fresh Connection (watch only), please follow the instructions below:
1. Go to the webpage https://my.inchainge.com and click on the link "No account yet? Register
as a new user".
2. During the registration process you can define your own password, which should meet the
following requirements:
 minimum of 8 characters, of which:
 minimum 1 CAPITAL
 minimum 1 number (123)
 minimum 1 non-alphanumerical symbol (!?#)
3. After registration you will receive a confirmation email on the email address you have
specified as username. Follow the instructions in this confirmation email.
4. After registration has been completed, you can now log into the platform again at
https://my.inchainge.com, using the specified email address and the password you created.
On the screen that opens then, there is a field called "Code entry". Here you can insert the
course code NEWNORMAL and click on submit.
5. After inserting the course code and potentially refreshing the page, you should now find a
widget on the right-hand side of the screen called TFC - Teaching Case The New Normal
Student.
6. By clicking on Enter Simulation, you can get into the system and see the screens with the
required company data.
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