This PESTEL/PESTLE analysis indicates that the company has many opportunities and a number of threats regarding its growth and international expansion. 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. Offering premium customer support, available anytime to answer your queries. Here's the swot analysis of the food and beverage industry is as follows; Strengths of Food & Beverage Industry High Growth Food and beverage is the world's top-growing industry. 12 trillion dollars yet spent on the food industry, are expected to increase up to 16 trillion dollars in the upcoming years. The restaurant industry is thriving! Copyright by Panmore Institute - All rights reserved. Without a doubt, this makes the food industry one of, the most tightly-regulated industries of all. Food Processing Industries' effective tax rate has increased up to 22.95% compared to the previous quarter. It is important for International brands to know that there is no specific citizenship required to own an American company. This PESTEL/PESTLE analysis indicates that the company has many opportunities and a number of threats regarding its growth and international expansion. Then we assessed the industry competition level with the help of Porters Five Forces Model. 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. All classes have now more money to spend on food which is expanding the food industry. The food and beverage industry is one of the biggest industries since it has a broad customer base. 'PESTLE Analysis of the Food Industry', PESTLE Analysis, [online]. It has reduced the sale of food and beverage companies. They now avoid spending more money on luxury food and beverage because of the limited income. Companies in the food and beverage industry are doing the same. (vitag.Init = window.vitag.Init || []).push(function () { viAPItag.display("vi_23289101301") }), Political factors impactingFood Industry, Economical factors affecting Food Industry, Technological factors affecting food Industry, Environmental factors impacting Food Industry, Conclusion: Food Industry Pestle Analysis, swot analysis of the food and beverage industry. The US is facing longer winter splashes and a number of immigrants due to which the population has developed interests in cuisine and other food tastes. This is fruitful as the individuals will strive for rapid results, but unfavorable at the same place because the people wouldnt be able to achieve more through an eagles eye. The startup stage is the opening stage of the industry life cycle. We're here to answer any questions you have about our services. The name restaurant refers to public eating place. FDA is now helping to save food that means reducing spoilage. According to the UNs report, after harvesting, 13.3% of food is wasted, and consumers waste 17% of the total food. Nonetheless, all businesses are controlled by these external factors. Technological developments have made the internet available to the masses, and businesses have started to market their products on social media. The PESTEL/PESTLE analysis framework indicates the external influences on Starbucks based on the characteristics of the remote or macro-environment of the business. Besides providing food, it generates economic activity and jobs for millions of people. The usage of automation technology and robots would make food preparation efficient and reduce labor costs. It is one of the main reasons behind culinary diversity. In this PESTLE analysis, we'll look at the Political, Economic, Sociocultural, Technological, Legal, and Environmental factors affecting the food industry; in particular, we'll look at how both restaurateurs and food distributors might be affected by current trends. These brands acquired smaller companies and survived in the industry. As a result, the food and beverage industry generates high revenue. Have you ever seen a person who doesn't eat or drink? The company needs to implement the data gathered by PESTEL to gain the maximum benefit. Any industry where the number of suppliers is low will have great supplier power. The busy lifestyle of people has increased peoples dependence on ready-made food instead of home-cooked food. This model factor investigates how threatened the existing companies are by new entrants. (Photo: Public Domain) McDonald's Corporation's strategies address issues in the external business environment, such as the ones identified in this PESTEL/PESTLE . Thats why food businesses have to conduct their operation according to health and safety regulations. Moreover, the input supplied isnt something scarce. The first part of every industry life cycle is the startup stage. Growing labor costs can be a matter of concern for the restaurant industry. Regulations have been made to safeguard the consumers and stabilize economic orientation along with the consumer interests such as food safety, environmental protection, animal well-being, food safety, and optimum quality. We are a government recognized Star export house and deal in Spices, Oil seeds and Dehydrated vegetables. That, means that individuals in the lower, middle, and upper classes all. Literature Review All these segments join together to form the food and beverage industry. The PESTEL/PESTLE analysis model is a strategic management tool that identifies various external factors relevant to firms, based on the conditions of their remote or macro-environment. According to researchers, in 1765, A. Boulanger, a soup vendor, first introduced the restaurant concept. They fear and become anxious. http://www.britvic.com/~/media/Files/B/Britvic-V3/documents/pdf/presentation/2016/Britvic_AR_2016.pdf, http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/11528922/Europe-finally-develops-a-taste-for-Innocent.html, http://www.fdin.org.uk/2016/05/loyalty-and-values-a-technically-strong-combination-at-innocent/, http://www.innocentdrinks.co.uk/us/sustainability, https://www.theguardian.com/sustainable-business/2016/may/27/innocent-drinks-app-helps-spain-strawberry-farmers-slash-water-use, https://www.theguardian.com/uk-news/2016/jul/20/brexit-farm-labour-shortages-fruit-vegetable-harvests-national-farmers-union, http://www.telegraph.co.uk/business/2017/07/02/innocent-gets-health-kick-smoothie-sales-top-tropicana/, Angwin, D, Cummings, S and Smith, C (2011), Britvic (2016) 'Britvic Annual Report' [online] Available from, Burn-Callander, R. (2015) 'Europe finally develops a taste for Innocent' Telegraph. Therefore, businesses in the food and beverage industry operating in countries with strict laws must be careful. To gain consistency in operations Nestle defines core competencies to map against threats. In PepsiCos case, these factors determine the companys growth path. Free resources to assist you with your university studies! Give it a try! Arabian Food Ind. It affects the cost and availability of food. This endangered citizenship and migration status has resulted in a lack of economic power. This business strategy enables companies to study these macro-environmental factors to plan the companys finances better. Based on this element of the PESTEL/PESTLE analysis, PepsiCo must improve its environmental impact to attract and retain customers, and to stabilize its supply chain. The new law has come up with a 20% deduction between now and 2025 which has indulged limitations towards business. Similarly, fluctuating taxes on raw materials and ingredients can result in high prices of products. Hence, the food and beverage industry will suffer. PESTLE The SWOT analysis for Monster Beverage is presented below: Sample Complete Report This is the sample complete report which will give you a glimpse of what your complete report will cover after purchase. The health and safety-related policies affect the restaurant industry the most. People arent really depending on authorities, yet they are working professionally. Our main markets are Russia, Eastern Europe and The Middle East. Over the years, the food and beverage industry evolved. Murphey, M., & Gause, R. (1974). Now, in a pandemic, there is a dramatic explosion in hunger across the country. In You have entered an incorrect email address! The goal is to ensure the safety and nutrition of ordinary people who just want to eat and fill their appetite. DOMT Adjusted1 TTM PE Source: Bloomberg and Pharos Research 21.4 45.9 16.7 9.8 8.5 10.6 10.0 20.0 30.0 40.0 50.0 Even then, humans were consuming food. The breach of government policies becomes a legal matter. Moreover, Trumps administration was eager to approve GMO plants, fishes, and animals ignoring the harm that these products would bring to the environment. This stage benefits the consumers since they have many more options. As we proceed further with the industry analysis, lets first construct the food and beverage industry life cycle. This impacted the US food Industry. In addition, the trend of intergovernmental cooperation improves opportunities for global expansion. To maintain its industry position, Starbucks must continuously monitor this external environment. In the US, 3000 acres of land are lost each day which imposes an increased burden on the remaining land. If you want to know more about how to make a PESTEL analysis diagram in EdrawMax Online, just check this PESTEL guide, it may help you to create diagrams without efforts. Both of them have the same objective and that is to feed the customers and satisfy their appetite. The yet president, Bidens approach towards trade and payment is still unclear. Some countries have strict checks and balances, while others have relatively relaxed laws. France takes pride in opening the first restaurant ever in the world. The food and beverage industry entered the growth stage in the 19th century when canning and pasteurization developed. The company has the opportunity to continue enhancing product quality to maximize revenues, with regard to consumers increasingly discriminating attitudes about product quality. Factor related to advertising, consumer rights, health concern, and product safety comes under this legal factor of PESTEL analysis. Current policies push for the public to be more conscious when buying . PepsiCo and its competitors are subject to legal requirements. It can be the laws related to health and safety, taxation, trade policies, labor law, environmental law, restrictions on trade, and more. Trends affect the food industry. The management of a company uses PESTEL analysis to weigh the factors that can hinder or promote the industry's growth. Such trends have made people avoid unhealthy and fast food. PepsiCos performance is directly linked to the economy. Potential conflict between China and USA. Similarly, the company can improve products to address regulations about product safety and health effects. With the diversification of economic and geography environment food producing companies especially multinationals need to consider more about what situation they will be . The last and most important segment of the food and beverage industry is the consumers, who control the demand in the industry. Food and Beverage Industry Analysis: PESTLE, SWOT, Porter's Five Forces Dec 30, 2022 by Abdul Momin Today's article will be a treat for foodies since it will be all about food and beverages. Lets move ahead and analyze how competitive the food and beverage industry is. Thanks to the peoples inclination towards experimenting with food and their ever-changing preferences. Moreover, this enabled more food and beverage-related businesses to establish. The market share of snacks and confectionary items in the food industry in 2021 would be1,399,815million dollars. PepsiCo remains one of the strongest companies in the food and beverage industry. This has increased the risk of food-borne illnesses. Detailed PESTEL Analysis of Restaurant Industry. (2017) 'Innocent gets a health kick as sales top Tropicana'. The food and beverage industry hasnt reached the maturity stage yet. The overtime is compensated by one and one-half times their regular pay for each hour. People with these lifestyles are more likely to purchase ready-to-eat food products like those of PepsiCo. Business owners need to closely look at the social changes around. Tax rates, exchange rates, inflation, and labor wages impact the industry. A lot of food is wasted by the food and beverage industry. The restaurant industry must work in collaboration with the government. Also, the health of the people isnt so optimum. The PEST Analysis of UK's Food Producing Industry 1. PepsiCos business is partly dependent on technologies. The wasted food doesnt only impact the food industry but also the household budgets. These factors assess the extent to which government policies interfere in the business. Many international brands have faced Halal meat in Muslim countries. Purchase the PEST Analysis: The Philippines Country Profile as part of our Commodities research for April 2022. . Environment factors. There is no doubt that the food or restaurant industry is one of the largest and most profitable businesses globally. The healthy diet and exercising trends are becoming popular among people. After that, manufacturing and packaging took place in the food and beverage industry. 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. They do not harness their work schedules and have to move to different places to earn. Hence the food and beverage industry grew. RFID Installation: A Project Plan for a Courier Service Company. The primary criterion in the restaurant industry is cleanliness. The chefs and cooks add value to the food by cooking with various combinations and spices and then serve it to the customers. Technology has also given companies the scope to experiment with their promotion strategies to reach more people quickly and leave a long-lasting impression. More companies start to enter the industry, and the industrys competition increases. 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. As awareness has increased, people have realized how bad fast food is for their bodies. 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. This analysis on critical, current and future is made through detailing which is called SCPT. An Analytic Study of Organic Food Industry as Part of Healthy Eating Habit in Turkey: Market Growth, Challenges and Prospects September 2014 Procedia - Social and Behavioral Sciences 150:1030-1039 Means (strength, challenges, prospects and threats). After constructing the industry life cycle and assessing the competition in the food and beverage industry, lets conduct an environmental analysis of the food and beverage industry. Economy recovery efforts were drawn through stimulating funds. The United States Environmental Protection Agency gives many food manufacturing and pollution prevention techniques that will guide a manufacturing facility to reduce chemical, energy, and water usage. Data from the Australian Bureau of Statistics found that almost a third of employing businesses are having difficulty finding suitable staff. In such cases, customers can easily substitute one brand with another. In the maturity stage, the industry is at its peak since it maximizes its market share. Economic factors encompass economic growth, interest rate, exchange rate, inflation, the purchasing power of the consumer, and more. Innocent has also helped develop an app to reduce the amount of water used by strawberry farmers in Spain (Leahy 2016). The buying power in the food and beverage industry is really high since buyers can switch to different brands because of low switching costs. Here you can choose which regional hub you wish to view, providing you with the most relevant information we have for your specific region. Technological. Proactive guidance is being made to increase crop yields as it is beneficial for biodiversity. The following are notable sociocultural external factors relevant to PepsiCos business: Higher health consciousness is a threat to PepsiCo because of concerns about the sugar, salt, and fat content of its products. PepsiCos long-term growth trajectory is partly dependent on how the company addresses the major issues identified in this PESTEL/PESTLE analysis. The food industry is divided into different segments. These regulations and many other standards for the food and beverage industry make it one of the worlds most regulated businesses. Our consulting team answers your commercial questions with data and insights generated by our research experts, industry knowledge and 1,200 on-the-ground analysts in 100 developed, emerging and frontier markets. Recessions always lower the purchasing power of the customers. FSMA ( Food Safety and Modernization Act ) has been passed to shift the focus from the treatment of foodborne diseases towards its prevention. Available online at www.sciencedirect.com Procedia Social and Behavioral Sciences 24 (2011) 188"197 7 th International Strategic Management Conference The Firms Survival and Competition through Global Expansion: A Case Study from Food Industry in FMCG Sector Yasemin Oraman a* , M.Omer Azabagaoglu a , I.Hakki Inan a a Namik KemalUniversity, Tekirdag 59030, Turkey Abstract This . The PESTLE analysis helps in identifying the impact on PepsiCo's business model by influencers like political, economic, social, technological, legal and environmental factors Assessing the benefits of the notable merger of Pepsi-Cola and Frito-Lay. Moreover, it takes time for a new entrant to realize the market trends, so its impossible for a new company to compete with the industry giants. Background of Restaurant Industry France takes pride in opening the first restaurant ever in the world. Industry Analysis. Internet Users all UBER Market Overview/Situational Analysis The SWOT analysis is used by business analysts to analyze the internal and external factors affecting an organizations operations. Heres the pestle analysis of food and beverage industry as follows; Various governments across the globe have laid down the scope and framework for the operations of the food business. The PESTLE analysis (Political, Economic, Socio-Cultural, Technological, Legal, Environmental) will analyse the macro framework within which Innocent operates . National Beverage Corp. PESTEL analysis is a strategic tool to analyze the macro environment of the organization. So, you must be thinking, how am I making such a big claim? Restructuring of existing strategies can help the brand bounce back to the hot spot it was initially enjoying. This must be taken into account by the international business holders if they want to become a part of the US Food Industry. The pandemic ofcovid-19has pushed the global economy into economic recession with increasing unemployment and lower purchasing power of people. PepsiCo remains one of the strongest companies in the food and beverage industry. The ongoing environmental crisis has given rise to awareness about environmental factors. GMO food products are also considered safe and distributed. After an in-depth study of the swot analysis of food and beverage industry, weve concluded that environmental issues, halal meat, safety regulations, and usage of technology are some of the main challenges. Labor unions and government legislators are considering increasing the minimum wage rate. They are worried about being watched by NSA but do not express the fear as they are unexpressive. 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. The Essay Writing ExpertsUK Essay Experts. Nowadays, many people have become cautious about their diet and they avoid salty, spicy, oily, and sugary based food. This factor analyses the suppliers power to dictate prices in an industry. Hence, there is always an option to switch suppliers. These factors help businesses plan their short-term and long-term goals. Today, well discuss the pestle analysis of food and beverage industry. So, the Industry must shift towards greens. Some of the food and beverage industrys most important components are producers, manufacturers, retailers, and consumers. PepsiCo must address the following political factors: Major economies like the United States and Canada are politically stable, thereby presenting growth opportunities for PepsiCo. Thats why people have become very cautious about their spending. They are just thinking to label it on the products for public awareness because they do not hesitate from the origin of these products Traditional methods of raising poultry and other animals have been replaced by more intensive methods where animals are fed with a concentrated diet. In the end, every industry reaches the decline stage. The new law has come up with a 20% deduction between now and 2025 which has indulged limitations towards business. And they do contact the pioneers of the senior officials if they find something intriguing. The moderate rate of regulatory change gives opportunity for PepsiCo to grow with the expectation that its current strategic decisions will satisfy regulatory requirements in the long term. Currently, around 15 million cafes, restaurants, and pubs all over the globe contribute significantly to the industrys growth. Save my name, email, and website in this browser for the next time I comment. It includes factors like labor regulations, minimum wage, food transportation system, food storage regulations, expiration date, and cleanliness of the kitchen. PepsiCo is the second biggest company in the global food and beverage industry. Many of PepsiCos consumers follow sociocultural trends. This emission is expected to increase up to 30-40% by 2050 due to the rising population. Indeed, there are some. For internal factors; check out theswot analysis of the food and beverage industry. Everything in desktop + Templates Community, Join 2023 Edraw Special Sales. The food and beverage industry consists of all places where food and beverages are served, such as cafes, restaurants, pubs, etc. Other political factors in the UK include Brexit, which may have both direct and indirect impacts on Innocent in areas such as trade agreements and the potential opportunities, such as access to new markets, and threats, such as trade tariffs, which may arise from these. Lets proceed further and conduct a food and beverage industry analysis to see the food and beverage industrys life cycle, the industrys competitiveness, and what external and internal factors impact the industrys operations. In the age of technology where everything is rapidly evolving, marketing goes into a more competitive environment than ever before. Merit is the only priority. Farooq, U., 2021. In addition, an increase in the number of automated processes in the company can enhance business performance. The growing population and its increasing demand, sensitivity towards transgender employees are some other social factors directly or indirectly influencing the restaurant industry. PESTLE Analysis. PESTEL is the most vital factor affecting the expansion of country. Now many food businesses are changing their cooking style and shifting towards an organic-based diet in order to keep up with the health trends. It will help to lower the risks of environmental damage, which can occur because of them. This industry operates round the clock. In fact, some countries have already increased the minimum wage. Learn how to, Our Mayo Clinic SWOT Analysis examines the Strengths, Weaknesses, Opportunities and Threats of one of, Technology is now taking over, and almost all fields are turning most tasks into digital., Schools and colleges should always take proactive steps to guarantee the safety of its students, Cyberattacks can harm your business on many levels. It differs from country to country. The company dominates the snack, food, and beverage industries. Copyright 2003 - 2023 - UKEssays is a trading name of Business Bliss Consultants FZE, a company registered in United Arab Emirates. UCF Research Guides. Also, the tax realm there is dynamic. Factors including innovation, automation, technical awareness, and more influence the production, distribution, and communication operations of a business come under the technical parameters. Since the food and beverage industry holds great significance, we have conducted its industry analysis today. Amazing Business Data Maps. PepsiCo must develop strategies that enhance its abilities to withstand the external factors in its remote or macro-environment. 2. Reliefs have also been asked during Bidens era for the consumers, and the business. Foreigners can invest in US stocks by opening an overseas trading account with a foreign or domestic broker. This factor discusses how threatened companies are from getting substituted by customers. As a result, many people have stopped eating fast food. Other technological factors include social media which links Innocent to its customers (Innocent 2017). The beverage industry contains two main categories, and each of them forecasts to reach a positive number in market value: Non-alcoholic segment : USD 1.60 trillion by 2025 (according to Intrado GlobalNewswire, 2020) Alcoholic segment : USD 647.7 billion in 2023 (according to Grand view research, 2017) The food and beverage industry is the worlds most powerful business because every person has to eat food in order to live. This large amount spent indicates massive food production so controlling this production, and eventually, the emissions have become a security concern. Looking for a flexible role? The slaughtering of the animal should be according to the faith of Islam. 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). The legal external factors relevant to PepsiCos business are as follows: Genetically modified organisms (GMOs) are now increasingly regulated worldwide, particularly in Europe. This factor of Porters five forces model analyses the power of buyers to dictate the prices. The partnership with Coca Cola in 2009 was subject to UK competition laws. They are- traditions, cultural values & beliefs, population growth, age distribution, career attitude, and more. Our values discourage plagiarism. Also, you can find substantial PESTEL templates in our template community to have a quick start. With the changing legislation, businesses must also change their strategies to grow and expand. 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