RMIT Classification: Trusted

Food Services Belagaria Case

About International Food Services (IFS) and Food Services Belagaria (FSB)

Mr. Benjamin Buford Blue (known to his friends and co-workers as Mr. Bubba) is the CEO of Food
Services Belagaria (FSB). FSB is subsidiary of International Food Services (IFS), which is considered the
world’s leading food distribution company. IFS is based in Berlin, Germany and specializes in marketing,
selling and distributing food products to restaurants, lodging establishments, healthcare and educational
facilities all around the world. While FSB is a subsidiary of IFS, for years the branch has operated fairly
autonomously in Belagaria.

FSB sells a wide variety of food products including:

 Specialty Produce (Fruit, Vegetables, Herbs)

 Specialty Meat and Seafood
 Italian Specialty (Pastas, Sauces, cold cut meats, olive oils…etc.)
 European Imports (Specialty Items from all European countries)
 Dairy Line (Milk, Cream, Butter and a wide variety of cheeses)
 Bakery and Pastries

In total, FSB sells over 7,000 products from over 89 countries, which is a very impressive assortment of
food products. Since wheat is a major crop for Belagaria, FSB does not sell much of the Bakery and
Pastry line, but the other lines were very popular before the Covid pandemic and the Russian war of
aggression.

Current Situation

It has been a difficult time for both Mr. Bubba and FSB. The global Covid-19 pandemic had shut down
many businesses in Belagaria, but now the country is starting to recover. However, compounding to the
damage done by Covid-19 lock downs, is the Russia’s unprovoked war against Ukraine and its effects on
global economy and increase in prices of goods.

Belagaria has remained neutral, but is not immune to the effects of the war. Supply chains and logistics
have been massively disrupted and with high gas prices FSB’s ability to receive products has been
slowed with shipments arriving a week or two late. Ordering has also been an issue as orders have been
sporadic. Refugees from Ukraine have also come across the border.

During the Covid pandemic, schools were closed by government mandate. This caused a significant hit to
FSB’s bottom line and the quantity of orders decreased significantly. On top of that decrease in orders,
many restaurants also closed for two main reasons. First, many were unable to serve food indoors due
to laws restricting food service inside, for fear of spreading the virus. Again, this was by government
mandate. Restaurants that had outdoor seating were still ok, but only during warm months. However,
winter is very cold in Belagaria and the summer only lasts for about 3 months. Second, most of the
Belagarian public were very mindful of spending money, so eating out was a luxury many customers did
without.

The opposite side was that many restaurants, particularly lower cost eateries did very well if they were
able to convert their operations to pick-up or delivery. Some lower cost eateries actually made more
 RMIT Classification: Trusted

money during the pandemic than before due to less competition. The ones that were successful were
able to change and adapt quickly to the changing conditions. After the pandemic schools have reopened
and all children are back in classes. Some restaurants have reopened and Belagarians slowly started
going out to eat again. Unfortunately, many restaurants which had closed because of the pandemic
never reopened.

Another interesting occurrence was that some Belagarian entrepreneurs saw the situation as an
opportunity to start new businesses. With so many places closing down, there were many nice locations
for rent really cheap. Some of the entrepreneurs who had money saved and were willing take the risk
sought to open coffee shops, bars and restaurants. Other entrepreneurs purchased equipment from the
failing and closing restaurants at an incredibly low price. These entrepreneurs plan to resell the
equipment when the war is over and the economy rebounds. Still, overall, the ordering from restaurants
and other institutional buyers decreased.

The instability of the orders created issues for logistics/transportation partners and also negatively
impacted FSB’s warehousing and inventory. Early on there was quite a bit of spoilage and food that went
bad. First the fresh produce went bad. Then, over time, even the frozen foods started to expire. Mr.
Bubba tried to sell many of the products directly to local consumers (B to C), but had a problem getting
approvals from the IFS home office.

IFS had taken notice of the situation and has started tightening up control and decision making. They are
worried that FSB is in a vulnerable situation and want to support, though that support has made it
virtually impossible for Mr. Bubba to make quick decisions, which he believes is necessary given the
quickly changing situation. Virtually everything needed approval from the home office which increased
the bureaucracy and slowed down the already burdened operation.

To make matters even more complicated, many Ukrainian refugees have started coming to Belagaria to
escape the war zone. The refugees are mostly the elderly, women and young children. There is a refugee
camp within two kilometers from the FSB home office and warehouse. This has added more stress to the
local community including FSB’s employees. Some international NGOs and aid organisations have also
come into the country to help with the refugee resettlement. They work with the Belegarian
Government, but at the moment that aid is still minimal with more resources going to Ukraine.

About Belagaria

Belagaria, is about four times the size of Vietnam and has a population of approximately 64 million. The
country had a stable government and enjoyed an average five percent, or more, gross domestic product
(GDP) growth per year from 2012 to 2019. The GDP per capita in 2019 was USD$12,000, but by 2022 had
dropped by 30% to USD$8,000

Mr. Bubba is confused and doesn’t know how to manage all the different groups he has to work with
and/or manage.

Note: Belagaria is a fictitious country and FSB and IFS are both fictitious companies. Make sure you
follow the case study structure and marking rubrics when analyzing the case.