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PESTLE Analysis. Lets identify some external factors impacting the food and beverage industry. The functioning is similar to that of any retail store. This report . So, the Industry must shift towards greens. The US has started growing commodities from genetically modified seeds. 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. For instance, they have to clarify the amount of oil and salt theyre using, the right temperature, rightly grilled, food storage system, expiration date, cleaning, and food transportation. 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. 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. This element of the PESTEL/PESTLE analysis shows that PepsiCo must ensure market diversification to achieve stable international growth. Besides providing food, it generates economic activity and jobs for millions of people. Merit is the only priority. President Trumps era cant be taken friendly to the food industry. Recessions always lower the purchasing power of the customers. 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. 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. Producers are the farmers who grow food, while manufacturers are the industries that manufacture new products from raw inputs and are involved in packaging. Furthermore, humans have no alternative to food, so the industry wont be entering the decline stage anytime soon. Innocent currently uses 100% recycled plastic in its bottles and is also further seeking to find new ways to reduce any negative impacts on the environment (Innocent 2017). As we proceed further with the industry analysis, lets first construct the food and beverage industry life cycle. PepsiCo has the opportunity to reduce its use of GMO ingredients to satisfy these regulations. Technological factors. Foreign investors need to be aware of greenfield investments which have two types. Bizfluent. As people of the US possess a busy lifestyle so they opt for ready-to-eat food products. Economic factors encompass economic growth, interest rate, exchange rate, inflation, the purchasing power of the consumer, and more. This emission is expected to increase up to 30-40% by 2050 due to the rising population. 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. The food and beverage industry has a huge customer base since every human is a consumer, and some are producers. Based on the Restaurant Industry PESTEL analysis, one can say that the company has lost its initial glory. Some food businesses like McDonalds have adopted the tech automation tools like cooking robots, self-ordering, payment systems, and online orders and delivery systems. 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). This factor discusses how threatened companies are from getting substituted by customers. In this PESTLE analysis, we'll look at the Political, Economic, Sociocultural, Technological, Legal, and . Food companies have to follow very strict food safety and other health protocols. The article explores each force in-depth and tries to decipher its impact on the business already operating within the food industry or aspiring to internationalize their company within the USA. 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. 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. The years of President Trump have dramatically reshaped food and farming across the country. This shift cant be taken in a negative connotation, but the industry must recognize the shift for future concerns. This model factor investigates how threatened the existing companies are by new entrants. Technological breakthroughs in beverage industry. Socio-cultural aspects that help the businesses develop a supply-demand model come under this factor. 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. The breach of government policies becomes a legal matter. Factors including innovation, automation, technical awareness, and more influence the production, distribution, and communication operations of a business come under the technical parameters. Available at: https://www.marketingtutor.net/pestle-analysis-of-a-restaurant/ (Accessed 26 June 2021). Though people are individualists yet there is immorality due to indulgence and this would exert negativity towards their work. Labor unions and government legislators are considering increasing the minimum wage rate. All such efforts to increase the food capacity are affecting the food industry of the US as the buyers are resisting such trends. Pestle analysis of food and beverage industry. Level of corruption - especially levels of regulation in Consumer Goods sector. In terms of earning, PepsiCo is only second to Nestle. He announced billions of dollars of cuts to USDA and FDA which was alarming to food safety. Taxation that affects the purchase and quality also influences the industry. Today, well discuss the pestle analysis of food and beverage industry. The food industry is now focused to reduce this emission to come in coordination with the Paris Agreements Climate Goals. Edible grocery: estimated store-based and e-commerce sales worldwide 2021-2026. The healthy diet and exercising trends are becoming popular among people. After that, we carried out an environmental analysis of the food and beverage industry. The practice of agriculture started when people started to plant crops and fruits to meet consumers demands. If another country wants to export its food products to the US so it must fulfill the labeling requirements. have more money to spend on luxuries including restaurant food. Available at: https://freepestelanalysis.com/pestel-pestle-analysis-of-restaurant-industry/ (Accessed 26 June 2021). Apart from that, businesses must also develop strategies for recycling and waste management. Then we assessed the industry competition level with the help of Porters Five Forces Model. This factor of Porters five forces model analyses the competition in the industry. FDA is now helping to save food that means reducing spoilage. 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. 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 . Population growth, lifestyle, and age factor are among them. The food and beverage industry requires a lot of labor. Yuksel, I. In this element of the PESTEL/PESTLE analysis, it is shown that PepsiCo can focus on product innovation to comply with regulations. Here you can choose which regional hub you wish to view, providing you with the most relevant information we have for your specific region. The Essay Writing ExpertsUK Essay Experts. Reliefs have also been asked during Bidens era for the consumers, and the business. Plastic deteriorates the environment. This element of the PESTEL/PESTLE analysis indicates that PepsiCo must include new technologies as tools to improve business competitiveness. In PepsiCos case, these factors determine the companys growth path. Hence, the food and beverage industry will suffer. Use EdrawMax Online to create a PESTEL analysis diagram, or create any other diagram with ease! Of course not. However, government initiatives against sweetened carbonated drinks are a threat that could reduce PepsiCos revenues from affected segments. These regulations and many other standards for the food and beverage industry make it one of the worlds most regulated businesses. 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. This usually happens when consumers switch to an alternative industry. This has increased the risk of food-borne illnesses. There are massive PESTEL templates and symbols to choose from, and creating a PESTEL analysis diagram could be really simple. The Internet, globalization and . Then, the industry has to undergo the shakeout stage, and it reaches the maturity stage. 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. Info: 1359 words (5 pages) PESTEL Example It includes factors like labor regulations, minimum wage, food transportation system, food storage regulations, expiration date, and cleanliness of the kitchen. Also, no specific certification is required to distribute food in the USA. Offering premium customer support, available anytime to answer your queries. However, as the population keeps on growing, the demand for the food and beverage industry continues to grow. Foreigners can invest in US stocks by opening an overseas trading account with a foreign or domestic broker. Certain organizations such as Organic Consumers Association, the Non-GMO Project, and Greenpeace have reacted against this. 'PESTLE Analysis of the Food Industry', PESTLE Analysis, [online]. In addition, the trend of intergovernmental cooperation improves opportunities for global expansion. Legal factors play an essential role for restaurant industries, especially the ones operating globally. People now confront self-checkout screens at restaurants which have reduced the cost on laborers. Amazon PESTLE Analysis Example. All classes have now more money to spend on food which is expanding the food industry. 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. GMO food products are also considered safe and distributed. The food and beverage industry has been around ever since the existence of humans. These regulations require food and drink manufacturers to meet the standards provided by the EU for food safety and labelling. Proactive guidance is being made to increase crop yields as it is beneficial for biodiversity. Either way, it wont impact the food businesses, but they should be aware of the impact that their business would have on the environment. Published: 2nd Nov 2020. The Supreme court has recently come up with a surprise. Due to this forests are being devastated. Many international brands have faced Halal meat in Muslim countries. It can be the laws related to health and safety, taxation, trade policies, labor law, environmental law, restrictions on trade, and more. 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. Thats why many people are turning into vegan food. They do not harness their work schedules and have to move to different places to earn. To gain consistency in operations Nestle defines core competencies to map against threats. Developing a multi-criteria decision making model for PESTEL analysis. Health and environmental consciousness, perceived attributes, family structure, and shopping behaviors of the US population are the major drivers generating consumers need to buy green food. To recap, we first conducted the industry life cycle to analyze different stages of the food and beverage industry. This can include research, collaboration and education along its supply chain (Leahy 2016). Similarly, the company can improve products to address regulations about product safety and health effects. 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). 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