pestle analysis for food and beverage industry pdf
The US ranks amongst the topmost housing, earnings, education, personal security, and physical well beings but it ranks below the average in work-life balance. The last and most important segment of the food and beverage industry is the consumers, who control the demand in the industry. These factors assess the extent to which government policies interfere in the business. Further legal issues include areas such as financial reporting and corporate governance. The management of a company uses PESTEL analysis to weigh the factors that can hinder or promote the industry's growth. In fact, some countries have already increased the minimum wage. Food and beverage businesses and companies should be aware of the diet preferences of the market where theyre going to launch their product. If you are looking for additional support andresources related to PESTELAnalysis, please find more PESTEL Analysisresources below: To export a reference to this article please select a referencing stye below: Our academic writing and marking services can help you! The farmers are the food producers and they supply it to the food processing factories, vegetable markets, andhotels, and restaurants. Thus, affecting the prices on the menu. Companies must plan their finances well, keeping this factor in mind. Also, red meat production has immensely increased. Economic factors which impact on Innocent drinks include the level of taxation which may impact, either positively or negatively, on the level of its profits. Purchase the PEST Analysis: The Philippines Country Profile as part of our Commodities research for April 2022. . So, the Industry must shift towards greens. In this PESTLE analysis, we'll look at the Political, Economic, Sociocultural, Technological, Legal, and . The legal external factors relevant to PepsiCos business are as follows: Genetically modified organisms (GMOs) are now increasingly regulated worldwide, particularly in Europe. But its not good for the food businesses, because they have to give up their profit. The slaughtering of the animal should be according to the faith of Islam. April 11 [online] Available from, Food and Drink Innovation Network (2016) 'Loyalty and values: a technically strong combination at innocent' [online] Available from, Innocent (2017) 'Being sustainable' [online] Available from, Johnson, G., Whittington, R., Scholes, K., Angwin, D. and Regnr, P. (2014), Leahy, S. (2017) 'Innocent Drinks app helps Spain's strawberry farmers slash water use', O'Carroll, L. (2016) 'British strawberries could be wiped out by Brexit, farming leaders warn', O'Reilly, L. (2014) 'How Innocent and Coke have influenced each other', Withers, I. It's achieved this level of growth because of the many brands under their belt. Technological advancement such as accepting payments via smartphones, ordering food online, and operating CCTV cameras from mobile phones has opened up, new revenues for the restaurant industry. It will help to lower the risks of environmental damage, which can occur because of them. Roper, K. (2012, November). Currently Nestle operates in 12 different segments of the consumer products market, including baby foods, bottled water, cereals, candy, coffee, prepared and prepackaged foods, dairy, drinks, food service, healthcare and nutrition, ice cream and pet care.Its staple of brands includes some of the best-known names in the industry, such as Stouffer's, Dreyer's, Haggen-Daz, Purina, Aero . The practice of agriculture started when people started to plant crops and fruits to meet consumers demands. The food and beverage industry entered the growth stage in the 19th century when canning and pasteurization developed. So lets proceed further and conduct the food and beverage industry SWOT analysis. PESTEL is the most vital factor affecting the expansion of country. There has been increased automation in the food industry. Restructuring of existing strategies can help the brand bounce back to the hot spot it was initially enjoying. The technological external factors significant to PepsiCo are as follows: Based on moderate research and development (R&D) investments in the industry, PepsiCo can boost its own R&D investments to improve its competency in this business aspect. Weather affects the food industry as it impacts the area, intensity, and yield of crop production. 12 trillion dollars yet spent on the food industry, are expected to increase up to 16 trillion dollars in the upcoming years. PepsiCos long-term growth trajectory is partly dependent on how the company addresses the major issues identified in this PESTEL/PESTLE analysis. Understanding these forces is critical for business managers to take effective decisions. This may include the increased cost of ingredients which may occur if UK fruit farmers are unable to access the cheaper EU labour for fruit picking (O'Carroll 2016). It is not just famous in France, but worldwide. Food production, its distribution, and consumption are influenced by government policies. According to a report byStatista, the global annual revenue of the food business in 2021 would be roundabout8,049,240million dollars with a growth rate of3.14%. It is one of the main reasons behind culinary diversity. Based on this element of the PESTEL/PESTLE analysis, PepsiCo must align its products and marketing strategies to changes in consumer behaviors. PepsiCo SWOT Analysis: Strengths A massive portfolio. In this stage, the industry starts to grow. Food policies generally affect wholesalers, retailers, consumers, and as well as farmers. The pandemic of covid-19, masking, and social distancing have amplified the growth of e-commerce and online businesses. UCF Research Guides. Also, you can find substantial PESTEL templates in our template community to have a quick start. The laborers hired for the farm face many difficulties in their daily life. And they do contact the pioneers of the senior officials if they find something intriguing. Arabian Food Ind. To gain consistency in operations Nestle defines core competencies to map against threats. Companies in the food and beverage industry are doing the same. There is no doubt that the food or restaurant industry is one of the largest and most profitable businesses globally. Even today, the French makes a significant contribution to the restaurant industry. have more money to spend on luxuries including restaurant food. Based on the Restaurant Industry PESTEL analysis, one can say that the company has lost its initial glory. It differs from country to country. The decline stage arrives after the maturity stage. It has proven to be a boost for the economy of the food industry. This is particularly relevant with the current interest in the recycling of drinks bottles and the call for a deposit scheme to reduce the amount of plastic waste. Bush, T., 2021. PepsiCo Five Forces Analysis (Porters Model), PepsiCos Vision Statement & Mission Statement Analysis, PepsiCos Generic and Intensive Growth Strategies, PepsiCos Organizational Culture Characteristics: An Analysis, PepsiCos Organizational Structure Analysis, PepsiCos Operations Management, 10 Decisions, Productivity, Wendys PESTEL/PESTLE Analysis & Recommendations, Burger King PESTEL/PESTLE Analysis & Recommendations, Harley-Davidson PESTEL/PESTLE Analysis & Recommendations, Home Depot PESTEL/PESTLE Analysis & Recommendations, Starbucks Coffee PESTEL/PESTLE Analysis & Recommendations, Whole Foods Market PESTEL/PESTLE Analysis & Recommendations, Ford Motor Company PESTEL/PESTLE Analysis, Sony Corporations PESTEL/PESTLE Analysis & Recommendations, Microsoft Corporations PESTEL/PESTLE Analysis & Recommendations, Toyota PESTEL/PESTLE Analysis & Recommendations, PepsiCo Announces Strategic Investments to Drive Growth, Political stability in major economies (opportunity), Improved intergovernmental cooperation (opportunity), Government initiatives against carbonated drinks (threat), Economic stability of most major markets (opportunity), Rapid growth of developing economies (opportunity), Higher health consciousness (threat & opportunity), More discriminating attitudes about product quality (opportunity), Moderate R&D investments in the food and beverage industry (opportunity), Improving knowledge management systems (opportunity), Increasing automation in business (opportunity), High focus on business sustainability (opportunity), More complex expectations and standards on waste disposal (opportunity), Regulation on GMO ingredients (opportunity), Health and product safety regulations (opportunity), Moderate rate of regulatory change (opportunity), Product innovation to address concerns on quality and health effects. Plastic deteriorates the environment. The PESTLE analysis (Political, Economic, Socio-Cultural, Technological, Legal, Environmental) will analyse the macro framework within which Innocent operates (Johnson et al 2014; Angwin et al 2011). Food companies have to follow very strict food safety and other health protocols. The food and beverage industry is far from the decline stage since there are no signs of the decline of the food and beverage industry. As people of the US possess a busy lifestyle so they opt for ready-to-eat food products. Similarly, fluctuating taxes on raw materials and ingredients can result in high prices of products. . A PEST analysis of food delivery and other aspects of the food industry shows that there are lots of positive policies and programs in the country that you can take advantage of as a restaurant owner to improve your bottom line while helping the nation achieve its overall goals. However, the company can further diversify its global supply chain to minimize risk exposure to climate change. They now avoid spending more money on luxury food and beverage because of the limited income. Data from the Australian Bureau of Statistics found that almost a third of employing businesses are having difficulty finding suitable staff. The increment in salaries is good for the employees. Labor laws for workers at the restaurants have been given by FLSA ( Fair Labor Standards Act ). The war between Russia and Ukraine has adversely impacted the industry since several companies in the food and beverage industry have suspended their operations in Russia. A need to address this wasted food is to bring back the money into circulation. In every market there, either buyers or suppliers have the power. Producers are the farmers who grow food, while manufacturers are the industries that manufacture new products from raw inputs and are involved in packaging. In the end, every industry reaches the decline stage. In this stage, the industrys market share starts to fall since the demand for the products offered falls. This is true for our PEST analysis example for the food industry. GMO food products are also considered safe and distributed. CHAPTER 6 INDUSTRY ANALYSIS PESTEL ANALYSIS (Political, Economic, Socio-cultural, Technological, Environmental and Legal Analysis) Socio-cultural Filipinos on average consume almost five meals a day, aside from the basic breakfast, lunch and dinner meals, the snacks in between called Merienda is a common practice for Filipinos. The uncertainty around Brexit has led to a weakening of the pound making raw ingredients more expensive to import and this may also impact on the cost of sales, if food prices increase. The restaurant industry is thriving! Besides the direct outlets that provide food and beverages, food and beverages manufacturers and transporters are also considered a part of the food and beverage industry. Europe is an important market for Innocent and it will be important that Innocent can continue to access this market (Burn-Callander 2015). In this element of the PESTEL/PESTLE analysis, PepsiCo must consider changing its products to overcome the identified threat about carbonated drinks. It has been seen during Trumps era that he focused on deregulation and increasing aid to commodity farmers. The PEST Analysis of UK's Food Producing Industry 1. Moreover, retailers are the grocery stores and supermarkets that make the food and beverages available to consumers. A food business should follow these trends and launch its online platform in order to attract more people. The food and beverage industry requires a lot of labor. However, this external factor also presents the opportunity for the company to improve its products to address such concerns. This includes the, cleanliness of commercial kitchens, the standards for storing and, transporting produce, and even the requirements for laborers in the, food business. Its market scope is as big as the total population on earth. More companies start to enter the industry, and the industrys competition increases. The food and beverage industry uses a lot of plastic packaging. Political stability ensures how much a business will flourish. This PESTEL/PESTLE analysis indicates that the company has many opportunities and a number of threats regarding its growth and international expansion. No plagiarism, guaranteed! In 2022, the food and beverage industry grew to $6.3 trillion at 8.7%. As an industry crosses the growth stage, it enters the shakeout stage. Hence, less competition exists within the industry. It must work on its weaknesses and focus on the strengths to stand strong against the challenging competitors. Moreover, the input supplied isnt something scarce. In this PESTLE analysis, well look at the Political, Economic, Sociocultural, Technological, Legal, and Environmental factors, affecting the food industry; in particular, well look at how both, restaurateurs and food distributors might be affected by current, PESTLE analysis of the food industry: Final Thoughts. Offering premium customer support, available anytime to answer your queries. Here you can choose which regional hub you wish to view, providing you with the most relevant information we have for your specific region. It has engaged social media with it. Estimated value of global store-based and e-commerce sales in the edible grocery category in 2021 and 2026 (in . They are- traditions, cultural values & beliefs, population growth, age distribution, career attitude, and more. PESTEL is one such business tool that empowers investors to evaluate the external factors that directly impact the business environment. In the US more people arent accepting the difference between high-ups and the lower staff. The food and beverage industry is the oldest and most significant industry. Buyers can exercise their power if there are several alternatives present for the buyers. These factors include issues such as the rulings and guidelines from government bodies on nutritional information on food and drink (Food and Drink Innovation Network 2016 . Technology adds beneficial products and services, thus taking the business to a wider domain. As a result, the industry is predicted to grow at 8.7% in the coming years. This model factor investigates how threatened the existing companies are by new entrants. People of the US are now more conscious about health due to which a number of contemporary issues related to food policies have come up. Environmental factors are important due to the reliance of Innocent on natural ingredients and their commitment to sustainability. Economy recovery efforts were drawn through stimulating funds. The shakeout stage in the food and beverage industry arrived in the 20th century when big brands in the food and beverage industry, such as Nestle and Pepsi, arrived and established themselves. These processes made it possible to store and package food for later use. The yet president, Bidens approach towards trade and payment is still unclear. Registered office: Creative Tower, Fujairah, PO Box 4422, UAE. As a result, some well-established companies that hold large market shares emerged. Here consumers are the major class wasting the food due to desire to eat freshest. Have you ever seen a person who doesnt eat or drink? However, as the population keeps on growing, the demand for the food and beverage industry continues to grow. Companies that are a part of the industry look for ways to attract customers. Current policies push for the public to be more conscious when buying . Innocent must comply with the legal framework of the UK including taxation, health and safety and food manufacture laws (Food and Drink Innovation Network 2016). Having strong roots within Australia Byron Bay competitive position is driven by its long-standing roots and effective Consumers come and go out of these stores and do not even wait to pay. Course Hero is not sponsored or endorsed by any college or university. The PESTEL/PESTLE analysis model can be used to satisfy this need. People are involved in agriculture, food production, retailing, or they may be consumers. Companies must be flexible to adapt to these changes and plan business strategies accordingly. The industry will observe financial losses till the war doesnt stop. Moreover, this enabled more food and beverage-related businesses to establish. Population growth, lifestyle, and age factor are among them. There are broadly two categories, fast food, and casual dining. This business strategy enables companies to study these macro-environmental factors to plan the companys finances better. Here's the pestle analysis of food and beverage industry as follows; Political factors impacting Food Industry Government Regulations Various governments across the globe have laid down the scope and framework for the operations of the food business. The US professionals focus on what they can see right in front of them and not on the long-term goals. PepsiCo must address the following political factors: Major economies like the United States and Canada are politically stable, thereby presenting growth opportunities for PepsiCo. The Supreme court has recently come up with a surprise. Now that we are done discussing the life cycle of the food and beverage industry lets proceed further and have a look at the level of competition that exists in the food and beverage industry through Porters five forces model. The introduction of the latest software to manage the accounts of companies can lead to fewer errors and more profit. This element of the PESTEL/PESTLE analysis indicates that PepsiCo must include new technologies as tools to improve business competitiveness. The first part of every industry life cycle is the startup stage. The US Department of Labor, the State government, and the local governments have made laws to provide a safe, healthy, and fair environment to employees. The breach of government policies becomes a legal matter. All such efforts to increase the food capacity are affecting the food industry of the US as the buyers are resisting such trends. The economic situation in the UK can impact on the sales of Innocent smoothies and juices due to their premium price and the availability of cheaper substitutes. Give it a try! Many companies already exist in the industry that wont let a new entrant snatch its market share. Then we assessed the industry competition level with the help of Porters Five Forces Model. The political external factors that relate to PepsiCo are as follows: PepsiCo has opportunities for growth and expansion based on the economic stability of developed countries like the United States, as well as the high growth rates of developing economies, such as those in Asia. In general, the growing tendency of people to eat out has ensured better revenue for the restaurant industry. Whereas, cutting food aid to needy families. The market Uber typically operates in the ride-hailing market, valued at $37 billion in 2017, Executive Summary In other words, the hospitality industry and food & beverage industry are complimenting each other. Further uncertainty has been created by the proposed soft drinks levy which may impact more on Coca Cola than Innocent, due to their use of sugar in their products (Britvic 2016). Over the years, the food and beverage industry evolved. The effective tax rate total range has deteriorated. It affects the cost and availability of food. People can choose from a wide range of options. According to researchers, in 1765, A. Boulanger, a soup vendor, first introduced the restaurant concept. The ongoing environmental crisis has given rise to awareness about environmental factors. Top companies in the food and beverage industry are;Coca-Cola,Pepsi,KFC,Hersheys,Amul,Heineken,Nestle,Starbucks,Unilever,Chipotle,Hilton Hotel,Marriott,Burger King,Jollibee,McDonalds, and many others in the hotel and restaurant industry. People focus on the nutritional quality of food. This large amount spent indicates massive food production so controlling this production, and eventually, the emissions have become a security concern. The food and beverage industry is an ever-growing industry. This element of the PESTEL/PESTLE analysis shows that PepsiCo must ensure market diversification to achieve stable international growth. Here are the Political factors impacting the food industry: Governments across the world have expansive regulatory, frameworks for every aspect of the food industry. Moreover, buyers are highly price-sensitive, which is why the food and beverage industry brands have to agree with the prices set by buyers. The growing population and its increasing demand, sensitivity towards transgender employees are some other social factors directly or indirectly influencing the restaurant industry. So, you must be thinking, how am I making such a big claim? The Venture Capitalist Bubble and its Concerns: An Analytical Review, PESTLE Analysis Telecommunication Industry United Kingdom (UK), PESTLE Analysis UBER with Porter Five Forces, The Global Business Group: Analysis of Internationalisation in Spain with PEST Analysis Spain, Analysing Byron Bay Competitive Position Using Marketing Strategies, Literature Review on Mergers and Acquisition, Forever 21: PESTLE Analysis of Turkeys Apparel Industry. Do contact the pioneers of the PESTEL/PESTLE analysis model can be used to satisfy this need its growth and expansion... Sponsored or endorsed by any college or university industry crosses the growth of e-commerce and online.. 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