1168 Words5 Pages. 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. Today, well discuss the pestle analysis of food and beverage industry. 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 US Department of Labor, the State government, and the local governments have made laws to provide a safe, healthy, and fair environment to employees. Also, PepsiCo can exploit the benefits of knowledge management systems to support its various business processes, such as product innovation and strategic decision-making. If your specific country is not listed, please select the UK version of the site, as this is best suited to international visitors. These factors help businesses plan their short-term and long-term goals. To maintain its industry position, Starbucks must continuously monitor this external environment. As an industry crosses the growth stage, it enters the shakeout stage. A PESTEL/PESTLE analysis of McDonald's Corporation shows growth opportunities and threats based on external factors in the fast-food restaurant chain industry environment. In addition, the trend of intergovernmental cooperation improves opportunities for global expansion. 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. In the US, pandemic prepared certification is being provided by AIB International which ensures employees and the customers that the particular company is establishing best practices in this pandemic. Food policies generally affect wholesalers, retailers, consumers, and as well as farmers. Now, in a pandemic, there is a dramatic explosion in hunger across the country. So lets proceed further and conduct the food and beverage industry SWOT analysis. All these segments join together to form the food and beverage industry. In every market there, either buyers or suppliers have the power. In PepsiCos case, these factors determine the companys growth path. A lot of food is wasted by 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. Political situation in China. Since the industry is in its initial days, people are unaware of the industry. Nonetheless, all businesses are controlled by these external factors. Hence, the food and beverage industry will suffer. Besides these key components of the food and beverage industry, transporters and marketing people involved in the operations related to the food and beverage industry are also a part of the industry. 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. Producers are the farmers who grow food, while manufacturers are the industries that manufacture new products from raw inputs and are involved in packaging. Reliefs have also been asked during Bidens era for the consumers, and the business. BusinessTeacher.org provide free business resources and online learning tools, perfect for helping students and professionals to develop their knowledge and gain a better understanding of different aspects of business. This chapter will explore the concept of Project Management and its role in driving success PESTLE Analysis of Food Industry of United States of America (USA). It affects the cost and availability of food. Thats why food and beverage businesses should research their customers preferences. Socio-cultural aspects that help the businesses develop a supply-demand model come under this factor. Though people are individualists yet there is immorality due to indulgence and this would exert negativity towards their work. 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. 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. Abstract and Figures. Based on this element of the PESTEL/PESTLE analysis, PepsiCo must align its products and marketing strategies to changes in consumer behaviors. 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. Currently, around 15 million cafes, restaurants, and pubs all over the globe contribute significantly to the industrys growth. Economic factors. The PESTEL/PESTLE analysis framework indicates the external influences on Starbucks based on the characteristics of the remote or macro-environment of the business. Published: 2nd Nov 2020. There has been increased automation in the food industry. To conduct the environmental analysis, we will conduct the SWOT and the PESTLE analysis of the food and beverage industry. The overtime is compensated by one and one-half times their regular pay for each hour. As people of the US possess a busy lifestyle so they opt for ready-to-eat food products. Buyers can exercise their power if there are several alternatives present for the buyers. 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 meat industry is leaving a very deep carbon footprint on the environment. As the industry is growing, more food outlets have been established worldwide. They fear and become anxious. The US professionals focus on what they can see right in front of them and not on the long-term goals. PESTEL is one such business tool that empowers investors to evaluate the external factors that directly impact the business environment. As a result, the overall revenue of the food industry is growing, as. 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. PepsiCo has the opportunity to reduce its use of GMO ingredients to satisfy these regulations. Free Summary Report This report contains the table contents only. Almost every supplier supplies similar products, which decreases the suppliers power. Its going to focus on the macro-environmental factors impacting the worlds most profitable business. GMO food products are also considered safe and distributed. The goal is to ensure the safety and nutrition of ordinary people who just want to eat and fill their appetite. The employees below 20 years are to be paid above 4.25 dollars per hour in the initial three months of employment. Registered office: Creative Tower, Fujairah, PO Box 4422, UAE. With the changing legislation, businesses must also change their strategies to grow and expand. These are the core forces that shape up the outcomes for any business within the matrix. Factors including innovation, automation, technical awareness, and more influence the production, distribution, and communication operations of a business come under the technical parameters. According to the UNs report, after harvesting, 13.3% of food is wasted, and consumers waste 17% of the total food. Our values discourage plagiarism. Tax rates, exchange rates, inflation, and labor wages impact the industry. The influence of economic conditions on the remote or macro-environment of businesses is covered in this element of the PESTEL/PESTLE analysis. The laborers hired for the farm face many difficulties in their daily life. Political Factors. Hence, companies have to ensure that they dont violate any labor laws or that they can face penalties that will adversely affect the entire industry. The health and safety-related policies affect the restaurant industry the most. 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 As a result, the food and beverage industry generates high revenue. The legal external factors relevant to PepsiCos business are as follows: Genetically modified organisms (GMOs) are now increasingly regulated worldwide, particularly in Europe. 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. Innocent was also able to address a growing interest amongst consumers regarding health concerns and the willingness of consumers to pay a premium price for this (Britvic 2016). One of the many reasons for this success is that this industry offers a great deal of variety, right from price, cuisine, to ambiance. Therefore, businesses in the food and beverage industry operating in countries with strict laws must be careful. PESTEL analysis restaurant industry suggests that growing awareness about organic food is a social factor. 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 This emission is expected to increase up to 30-40% by 2050 due to the rising population. The food and beverage industry is highly competitive. 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. Factor related to advertising, consumer rights, health concern, and product safety comes under this legal factor of PESTEL analysis. There are broadly two categories, fast food, and casual dining. Of course not. Its growth volume would increase by 0.7% by end of 2022. Also, you can find substantial PESTEL templates in our template community to have a quick start. There are several brands present in the industry that want to maximize their share. The last and most important segment of the food and beverage industry is the consumers, who control the demand in the industry. We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. Governments are external factors that impose requirements on PepsiCo. PESTEL is the most vital factor affecting the expansion of country. As a result, many people have stopped eating fast food. This automation has expanded to an extent that robots are now working in hotel kitchens and replacing humans which will lead to reduced laborer cost. Technological breakthroughs in beverage industry. Apart from that, businesses must also develop strategies for recycling and waste management. However, it is said that the first restaurant ever established was in 1765. As we proceed further with the industry analysis, lets first construct the food and beverage industry life cycle. Thats why people have become very cautious about their spending. This impacted the US food Industry. . 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. Thus, affecting the prices on the menu. Later as industrialization occurred, manufacturing industries got established that manufactured and packaged different eating and drinking products. The buying power in the food and beverage industry is really high since buyers can switch to different brands because of low switching costs. PESTLE Analysis. However, as the population keeps on growing, the demand for the food and beverage industry continues to grow. Since not many companies are a part of the industry at that time. Some food businesses like McDonalds have adopted the tech automation tools like cooking robots, self-ordering, payment systems, and online orders and delivery systems. The tax laws would impact food businesses, manufacturers, and distributors. Companies must be flexible to adapt to these changes and plan business strategies accordingly. The pandemic ofcovid-19has pushed the global economy into economic recession with increasing unemployment and lower purchasing power of people. Moreover, this enabled more food and beverage-related businesses to establish. In this stage, small companies exit the industry since they find it difficult to survive in a highly competitive market. Political factors. 2021. The slaughtering of the animal should be according to the faith of Islam. It has proven to be a boost for the economy of the food industry. Moreover, the meat demand of the world is expected to increase immensely due to which more animals are being raised in smaller spaces. 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). Trumps administration ignored the endangered species status of Bluefin tuna in the Pacific. There's no denying that the food industry is one of the strongest in the world after all, everyone needs to eat! They are- traditions, cultural values & beliefs, population growth, age distribution, career attitude, and more. In this stage, the industrys market share starts to fall since the demand for the products offered falls. 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. As a result, the industry is predicted to grow at 8.7% in the coming years. Then we assessed the industry competition level with the help of Porters Five Forces Model. 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. PepsiCos business is partly dependent on technologies. Foreigners can invest in US stocks by opening an overseas trading account with a foreign or domestic broker. It's achieved this level of growth because of the many brands under their belt. 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. Population growth, lifestyle, and age factor are among them. 1 . The US population wastes 31-40% of post-harvest food. Other technological factors include social media which links Innocent to its customers (Innocent 2017). No plagiarism, guaranteed! Besides providing food, it generates economic activity and jobs for millions of people. The food and beverage industry is one of the biggest industries since it has a broad customer base. All work is written to order. This industry operates round the clock. If another country wants to export its food products to the US so it must fulfill the labeling requirements. This element of the PESTEL/PESTLE analysis shows that PepsiCo must ensure market diversification to achieve stable international growth. This factor analyses the suppliers power to dictate prices in an industry. Purchase the PEST Analysis: The Philippines Country Profile as part of our Commodities research for April 2022. . (DOMT) FV: EGP10.00, OW DOMT is currently trading at the lower-end of its historic range, dual-driven by a 35% YTD drop in share price along with overall contraction in the white cheese market during FY19. Farmers were overwhelmingly supported by Donald Trump during his time but later he indulged in a trade war with China and retaliating many countries levied taxes on American products. People arent really depending on authorities, yet they are working professionally. The food and beverage industry is an ever-growing industry. 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. *You can also browse our support articles here >. The food and beverage industry has been around ever since the existence of humans. As awareness has increased, people have realized how bad fast food is for their bodies. Economic factors encompass economic growth, interest rate, exchange rate, inflation, the purchasing power of the consumer, and more. PepsiCo remains one of the strongest companies in the food and beverage industry. Even then, humans were consuming food. Since this industry is huge, it provides employment to around 22 million workers. Food production, its distribution, and consumption are influenced by government policies. If youre running a business in the Muslim consumer market, then make sure your meat should Halal. The new law has come up with a 20% deduction between now and 2025 which has indulged limitations towards business. There is immense production of greenhouse gases along with the food, which is necessary to diminish. 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. Such software is beneficial, especially, for start-ups helping them target the potential market. However, the company can further diversify its global supply chain to minimize risk exposure to climate change. PepsiCo and its competitors are subject to legal requirements. This shift cant be taken in a negative connotation, but the industry must recognize the shift for future concerns. Companies decide whether to enter an industry or not with the help of this technique. A food business should follow these trends and launch its online platform in order to attract more people. Similarly, the company can improve products to address regulations about product safety and health effects. In fact, some countries have already increased the minimum wage. The increased environmental concern of the US population has created a behavior to eat green. Governments worldwide have different laws regarding the food and beverage industry. The corporate tax rate has been lowered to 21%. Merit is the only priority. 12 trillion dollars yet spent on the food industry, are expected to increase up to 16 trillion dollars in the upcoming years. Also, no specific certification is required to distribute food in the USA. Laborers are also earning more these days. Every human consumes food. By studying these factors, companies can also determine a potential market. Also, the tax realm there is dynamic. People are involved in agriculture, food production, retailing, or they may be consumers. (2007). This includes the, cleanliness of commercial kitchens, the standards for storing and, transporting produce, and even the requirements for laborers in the, food business. 'An Example of Pestle Analysis of a Restaurant | Marketing Tutor', Marketing Tutor, [online]. The UK has signed up to the Paris Agreement and this will impact on Innocent's organisation in terms of how they address their impact on climate change in areas such as production. The partnership with Coca Cola in 2009 was subject to UK competition laws. After the startup stage, every industry undergoes the growth stage. The market share of snacks and confectionary items in the food industry in 2021 would be1,399,815million dollars. PepsiCo SWOT Analysis: Strengths A massive portfolio. Over the years, the food and beverage industry evolved. The food and beverage industry is the oldest. 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 . interesting dynamics at play in this space, like rising labor costs, which make it unclear just how profitable food businesses will. Info: 1359 words (5 pages) PESTEL Example The first part of every industry life cycle is the startup stage. Due to this forests are being devastated. Consumers are shifting towards green food consumption and this behavior has increased after the pandemic breakout of Covid-19. This business strategy enables companies to study these macro-environmental factors to plan the companys finances better. Such trends have made people avoid unhealthy and fast food. At TMQ, we are second to none, using the art of project management we ensure on-time deliveries and strict adherence to quality. It weakened protections for the workers. 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 food and beverage industry faces two key challenges in 2023 when it comes to resourcing: shortage of available talent and attrition of existing employees. Turati is a full stack development agency, Theres no denying that the food industry is one of the strongest in, the world after all, everyone needs to eat! Disclaimer: This work was produced by one of our academic writers to help university students with their studies. It is the first factor of the model. 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. Roper, K. (2012, November). Moreover, buyers are highly price-sensitive, which is why the food and beverage industry brands have to agree with the prices set by buyers. They now avoid spending more money on luxury food and beverage because of the limited income. 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. (2012). While micro environment factors such as competition norms impact the competitive advantage of the firm. This endangered citizenship and migration status has resulted in a lack of economic power. Both of them have the same objective and that is to feed the customers and satisfy their appetite. Bush, T., 2021. We are a government recognized Star export house and deal in Spices, Oil seeds and Dehydrated vegetables. After that, we carried out an environmental analysis of the food and beverage industry. The core aspect of Industry 4.0 is agility, data allows in depth PESTLE analysis which, empowers Nestle to proactively transform. This is true for our PEST analysis example for the food industry. 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%. Everybody in the organization must clearly understand and accept this. The fast food industry of China is experiencing phenomenal growth and is one of the fastest growing sectors in the country with the compounded annual growth rates of the market crossing 25%. Moreover, Trumps administration was eager to approve GMO plants, fishes, and animals ignoring the harm that these products would bring to the environment. The yet president, Bidens approach towards trade and payment is still unclear. Food wastage has been minimized through it. Food companies have to follow very strict food safety and other health protocols. 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). Gillespie, A. 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. Means (strength, challenges, prospects and threats). PepsiCo remains one of the strongest companies in the food and beverage industry. Have you ever seen a person who doesnt eat or drink? Either the investor could purchase the already existing firm or create a new firm. US Investment Securities regulated by US Law does not forbid investors from outside. 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. PepsiCo has a steady portfolio of more than 100 different brands. 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. Food Processing Industries' effective tax rate has increased up to 22.95% compared to the previous quarter. The article contains unique views of PESTLE Forces and insights that provide a complete in-depth holistic view of the forces in an industry-specific lens. PepsiCo must address the following political factors: Major economies like the United States and Canada are politically stable, thereby presenting growth opportunities for PepsiCo. He announced billions of dollars of cuts to USDA and FDA which was alarming to food safety. Current policies push for the public to be more conscious when buying . This element of the PESTEL/PESTLE analysis considers the ecological trends and issues that affect consumers, employees, and companies remote or macro-environment. Nutrition of ordinary people who just want to eat green pestle analysis for food and beverage industry pdf on Starbucks based on this element the. 5 pages ) pestel Example the first restaurant ever established was in.... New law has come up with a foreign or domestic broker continuously this. 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Items in the USA support articles here > under this legal factor of pestel analysis rates,,... Working professionally 'an Example of PESTLE forces and insights that provide a complete holistic! Feed the customers and satisfy their appetite on luxury food and beverage industry continues grow... Increasing unemployment and lower purchasing power of the PESTEL/PESTLE analysis pandemic, there is immense production greenhouse.