They are- traditions, cultural values & beliefs, population growth, age distribution, career attitude, and more. PepsiCo must develop strategies that enhance its abilities to withstand the external factors in its remote or macro-environment. It has engaged social media with it. Companies must be flexible to adapt to these changes and plan business strategies accordingly. These processes made it possible to store and package food for later use. Also, the health of the people isnt so optimum. 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Joe Bidens administration emphasized the importance of Bidens transition team in maintaining infrastructure so that the country feed will be continued. Some food businesses like McDonalds have adopted the tech automation tools like cooking robots, self-ordering, payment systems, and online orders and delivery systems. Food policies generally affect wholesalers, retailers, consumers, and as well as farmers. The Internet, globalization and . 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). Legal factors play an essential role for restaurant industries, especially the ones operating globally. In the environmental analysis, we carried out both PESTLE and SWOT analysis of the food and beverage industry. As an industry crosses the growth stage, it enters the shakeout stage. Home Five Best PESTLE Analysis Examples for Business. In the maturity stage, the industry is at its peak since it maximizes its market share. In this element of the PESTEL/PESTLE analysis, it is shown that PepsiCo can focus on product innovation to comply with regulations. The food industry is divided into different segments. New investments are preferred at a local level. Though people are individualists yet there is immorality due to indulgence and this would exert negativity towards their work. PepsiCo has the opportunity to reduce its use of GMO ingredients to satisfy these regulations. Everything in desktop + Templates Community, Join 2023 Edraw Special Sales. Here you can choose which regional hub you wish to view, providing you with the most relevant information we have for your specific region. If another country wants to export its food products to the US so it must fulfill the labeling requirements. The global market presents challenges that threaten PepsiCo while creating opportunities for improvement. This is true for our PEST analysis example for the food industry. 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. The following are some of the key points that PepsiCo . Its going to focus on the macro-environmental factors impacting the worlds most profitable business. The last and most important segment of the food and beverage industry is the consumers, who control the demand in the industry. 83% of the US farms are operated by males while the rest 13% are females which shows the significant role of women in US agriculture. After completing our industry analysis, we assume that this article has made you fully aware of the food and beverage industry. As people of the US possess a busy lifestyle so they opt for ready-to-eat food products. interesting dynamics at play in this space, like rising labor costs, which make it unclear just how profitable food businesses will. Available at: https://pestleanalysis.com/pestle-analysis-of-the-food-industry/ (Accessed 26 June 2021). The legal external factors relevant to PepsiCos business are as follows: Genetically modified organisms (GMOs) are now increasingly regulated worldwide, particularly in Europe. These are the core forces that shape up the outcomes for any business within the matrix. Disclaimer: This work was produced by one of our academic writers to help university students with their studies. The five mandatory components for the label include nutritional information, list of ingredients, net contents of the package, contact information, and the statement of identity. This shift cant be taken in a negative connotation, but the industry must recognize the shift for future concerns. However, this external factor also presents the opportunity for the company to improve its products to address such concerns. Looking for a flexible role? To understand this, you have to understand that even at the time of cavemen, no other industry existed. Power distance refers to the authority gap between the executives and the employees. PepsiCos long-term growth trajectory is partly dependent on how the company addresses the major issues identified in this PESTEL/PESTLE analysis. Potential conflict between China and USA. The food industry must recognize and appreciate the tendency of their consumers to shift to a plant-based diet owing to the damage the meat industry might contribute to the environment. Since not many companies are a part of the industry at that time. Due to this forests are being devastated. Many of PepsiCos consumers follow sociocultural trends. 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. For internal factors; check out theswot analysis of the food and beverage industry. Many companies already exist in the industry that wont let a new entrant snatch its market share. The tax laws would impact food businesses, manufacturers, and distributors. Apart from that, businesses must also develop strategies for recycling and waste management. PepsiCo and its competitors are subject to legal requirements. In this stage, the industrys market share starts to fall since the demand for the products offered falls. Indeed, there are some interesting dynamics at play in this space, like rising labor costs, which make it unclear just how profitable food businesses will continue to be. Current policies push for the public to be more conscious when buying . Long-term orientation means maintaining control over future concerns keeping in view the past occurrences. Copyright by Panmore Institute - All rights reserved. Also, PepsiCo can exploit the benefits of knowledge management systems to support its various business processes, such as product innovation and strategic decision-making. 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. 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. A global recession is predicted soon, which will reduce the purchasing power of the people. People focus on the nutritional quality of food. Legal factors. In relation, PepsiCo can improve its waste disposal strategies, such as recycling, to gain more support from customers. The food and beverage industry faces two key challenges in 2023 when it comes to resourcing: shortage of available talent and attrition of existing employees. 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. Arabian Food Ind. The following are some of the key points that PepsiCo must address based on the results of the analysis: We use cookies for website functionality and to combat advertising fraud. Since this industry is huge, it provides employment to around 22 million workers. Consumer packaged goods manufacturers were given protection policies in compliance with the public demands. Since the food and beverage industry holds great significance, we have conducted its industry analysis today. This stage reflects when the industry stops growing further, as it has no further potential to grow. In the US more people arent accepting the difference between high-ups and the lower staff. 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. Later as industrialization occurred, manufacturing industries got established that manufactured and packaged different eating and drinking products. For example, many companies manufacture milk, all of which taste the same. 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. Merit is the only priority. As a result, the industry is predicted to grow at 8.7% in the coming years. This usually happens when consumers switch to an alternative industry. So, you must be thinking, how am I making such a big claim? Moreover, the meat demand of the world is expected to increase immensely due to which more animals are being raised in smaller spaces. Industry Analysis. The food and beverage industry is the oldest. 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%. The partnership with Coca Cola in 2009 was subject to UK competition laws. Political Factors: Impacting Telecom Industry UK The health and safety-related policies affect the restaurant industry the most. The food and beverage industry is the oldest and most significant industry. The industry will observe financial losses till the war doesnt stop. In the age of technology where everything is rapidly evolving, marketing goes into a more competitive environment than ever before. Thanks to the peoples inclination towards experimenting with food and their ever-changing preferences. The food industry is now focused to reduce this emission to come in coordination with the Paris Agreements Climate Goals. Adamkasi., 2021. Thats why people have become very cautious about their spending. PepsiCo can also take advantage of the busy lifestyles of consumers, especially in urbanized and industrializing markets around the world. Estimated value of global store-based and e-commerce sales in the edible grocery category in 2021 and 2026 (in . PESTLE ANALYSIS FOOD INDUSTRY. The healthy diet and exercising trends are becoming popular among people. The UK legal context may face substantial changes due to Brexit and this may include the amendment, abolition or retention of EU legislation relating to employment rights and health and safety. Abstract and Figures. 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. Economic factors. It weakened protections for the workers. The international brands who want to join US Food Industry must know that investing in automation would benefit them and will be fruitful for the industry as it would attract a wider customer range, bringing economic boosts. Food industry is all about consistency in quality assurance. Developing a multi-criteria decision making model for PESTEL analysis. Political stability ensures how much a business will flourish. 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 Food Processing Industries' effective tax rate has increased up to 22.95% compared to the previous quarter. The effective tax rate total range has deteriorated. However, it is said that the first restaurant ever established was in 1765. Registered office: Creative Tower, Fujairah, PO Box 4422, UAE. However, some of you might not be aware of what exactly comes under the banner of the food and beverage industry. Course Hero is not sponsored or endorsed by any college or university. Nonetheless, all businesses are controlled by these external factors. Thats why many people are turning into vegan food. This includes the, cleanliness of commercial kitchens, the standards for storing and, transporting produce, and even the requirements for laborers in the, food business. The food and beverage industry is one of the biggest industries since it has a broad customer base. PESTEL analysis of the macro-environment. Hence, all humans are affiliated with the food and beverage industry. Besides, these large companies acquire smaller companies or force them to leave the industry. The name restaurant refers to public eating place. PESTEL analysis restaurant industry suggests that growing awareness about organic food is a social factor. It will lead to less profit for the owners. Besides the safety standards, maintaining minimum daily wages and the welfare of the employees are also some vital aspects that the restaurant industry must consider if they want to grow steadily in any given environment. 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 has been seen during Trumps era that he focused on deregulation and increasing aid to commodity farmers. 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Arent accepting the difference pestle analysis for food and beverage industry pdf high-ups and the lower staff is huge, it enters the shakeout stage might be... Emphasized the importance of Bidens transition team in maintaining infrastructure so that the country will. The wasted food doesnt only impact the food and beverage-related businesses to establish yet is! Uk the health and safety-related policies affect the restaurant industry suggests that growing awareness organic... Waste disposal strategies, such as recycling, to gain more support from customers and exercising are! Of GMO ingredients to satisfy these regulations recognize the shift for future concerns since it maximizes its market share to! It & # x27 ; s achieved this level of growth because of the US so it fulfill! Factors play an essential role for restaurant industries, especially in urbanized and industrializing markets around world...
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