Fresh Connection
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Mary Alice McKenzie began managing a declining family business in 1984. In order to salvage the meat processing facilities and the fresh food manufacturing operations, she sold the McKenzie of Vermont “brand” for funds to finance restructuring the business. Fresh Connections was founded in 1998. Fresh prepared meals and meat processing are an opportunity for growth in meal options. Within a years timeframe Fresh Connections grossed 6 million dollars in revenue. Overall this division of the food industry yielded $100 billion in sales and forecasts to produce the majority of the growth in the next five years.
Fresh Connections prepares and packages exclusive foods for their clients. The ability to customize quality food products in a timely fashion is their competitive edge. Fresh Connections treats each freshly prepared food with the desired mixture of ingredients clients request from entrees to desserts. Competitive firms are constantly reviewing business strategies and operating procedures to sustain the firms ROI and profit share. Some operating and strategic issues of concern are: 1) R&D cost is not included in customer contracts, 2) inconsistent batch processing, waste and food safety issues increase the cost of operating the kettles, 3) lack of assimilation of products for shipment may shorten fresh food shelf life, 4) lack of computer operated scales causes bottlenecks in information flow from recipe development to shipping, 5) strategic growth of the customer base is needed for product innovation and expansion into additional markets. These issues are most valuable because they impact Fresh Connections vision of quality, consumer convenience and cost of production system elements. For example, R&D costs are $3000 per test recipe which averages $25,000 to $30,000 per month that clients do not share in reimbursing a percentage. Consumers should relieve Fresh Connections by sharing the cost. Expanding the business strategically in hospital healthcare meals and school cafeterias are consumer segments providing steady profits. These segments provide opportunity for additional plants and delivery locations.
The franchise restaurants with 30 to 50 locations are the most attractive consumer segment serving fresh food. They believe in Fresh Connections vision of quality products and are willing to pay for the extra care in food preparation with a commitment of 25% revenues. Retailers / Supermarkets generate 50% of revenues with requirements of just in time delivery of delicious made to order foods at low prices. Branded firms requesting smoked meats and other processes utilize core skills and the associated facility equipment. They provide 25% of the business with little growth potential. Each consumer segment has its attractive characteristics and disadvantages. Restaurants mainly prepare fresh foods but may increase or decrease volumes due to seasonal consumer buying. Supermarkets are lease familiar with the fresh food market and want the highest quality for the least cost and may decide to cancel an order without any warning.
Fresh Connections must sustain adaptability in meeting consumer demands