Restaurant Industry PESTEL analysis can identify how political, economic, socio-cultural, technological, ecological, and legal issues can impact the conditions of the restaurant industry. 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. The wasted food doesnt only impact the food industry but also the household budgets. 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 PEST analysis looks at four types of external environmental elements: P -Political factors in an economy include various forms of government intervention and political lobbying, such as . Food companies have to follow very strict food safety and other health protocols. These regulations require food and drink manufacturers to meet the standards provided by the EU for food safety and labelling. Thats why food businesses have to conduct their operation according to health and safety regulations. This element of the PESTEL/PESTLE analysis considers the effects of governmental action on companies remote or macro-environment. Know More According to researchers, in 1765, A. Boulanger, a soup vendor, first introduced the restaurant concept. It is not just famous in France, but worldwide. The introduction of the latest software to manage the accounts of companies can lead to fewer errors and more profit. The growing population and its increasing demand, sensitivity towards transgender employees are some other social factors directly or indirectly influencing the restaurant industry. Since the food and beverage industry is one of the biggest industries, we have decided to conduct a Food and Beverage Industry Analysis in todays article. In this stage, small companies exit the industry since they find it difficult to survive in a highly competitive market. With EdrawMax Online, you can create over 280 types of diagrams, charts, and visuals. 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. The food industry is divided into different segments. The top 5 companies that are covered in this article are. Roper, K. (2012, November). Bizfluent. With the diversification of economic and geography environment food producing companies especially multinationals need to consider more about what situation they will be . 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. There's no denying that the food industry is one of the strongest in the world after all, everyone needs to eat! Companies decide whether to enter an industry or not with the help of this technique. Social factors. The farms today are more like industrial facilities rather than family farms. The food and beverage industry has been around ever since the existence of humans. Almost every supplier supplies similar products, which decreases the suppliers power. However, by continuing to improve its manufacturing processes and use of resources, Innocent can offset any potential costs by reducing areas such as wastage and water use. If your specific country is not listed, please select the UK version of the site, as this is best suited to international visitors. Trends affect the food industry. 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). 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. Eventually, this will affect their professional behavior. However, government initiatives against sweetened carbonated drinks are a threat that could reduce PepsiCos revenues from affected segments. 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 food and beverage industry entered the growth stage in the 19th century when canning and pasteurization developed. Now, in a pandemic, there is a dramatic explosion in hunger across the country. Weather affects the food industry as it impacts the area, intensity, and yield of crop production. By reducing its carbon footprint, Innocent may assist in addressing the issue of climate change which may create adverse weather conditions and impact on harvests of fruit and vegetables. 'PESTEL-PESTLE Analysis of Restaurant Industry | Free PESTEL Analysis', PESTLE Analysis, [online]. This usually happens when consumers switch to an alternative industry. PESTLE ANALYSIS FOOD INDUSTRY. Similarly, the company can improve products to address regulations about product safety and health effects. Investors are eager to assess the situation before investing in this business, owing to the growing competition in this sector. Available at: https://www.marketingtutor.net/pestle-analysis-of-a-restaurant/ (Accessed 26 June 2021). Many of PepsiCos consumers follow sociocultural trends. The years of President Trump have dramatically reshaped food and farming across the country. 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. This element of the PESTEL/PESTLE analysis shows that PepsiCo must ensure market diversification to achieve stable international growth. Long-term orientation means maintaining control over future concerns keeping in view the past occurrences. These include: obesity-fighting programs immigration reform In this element of the PESTEL/PESTLE analysis, it is shown that PepsiCo can focus on product innovation to comply with regulations. The point to ponder here is the Mergers are mostly making the business firms and commercial institutes to excel in their resource in the time of financial crisis. 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. Course Hero is not sponsored or endorsed by any college or university. There is no doubt that the food or restaurant industry is one of the largest and most profitable businesses globally. 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. Copyright by Panmore Institute - All rights reserved. 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. Moreover, this enabled more food and beverage-related businesses to establish. Also, you can find substantial PESTEL templates in our template community to have a quick start. Though people are individualists yet there is immorality due to indulgence and this would exert negativity towards their work. PepsiCos supply chain and brand image are linked to environmental concerns. Trumps administration ignored the endangered species status of Bluefin tuna in the Pacific. PepsiCo has the opportunity to reduce its use of GMO ingredients to satisfy these regulations. This industry operates round the clock. In this stage, the industrys market share starts to fall since the demand for the products offered falls. Data from the Australian Bureau of Statistics found that almost a third of employing businesses are having difficulty finding suitable staff. After that, we carried out an environmental analysis of the food and beverage industry. In fact, some countries have already increased the minimum wage. Bidens administration made sure that government policies reflect consumers needs. Also, PepsiCo can exploit the benefits of knowledge management systems to support its various business processes, such as product innovation and strategic decision-making. 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). In addition, an increase in the number of automated processes in the company can enhance business performance. 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). Looking for a flexible role? According to the UNs report, after harvesting, 13.3% of food is wasted, and consumers waste 17% of the total food. 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. This has caused the demand for fast food to decrease. 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. Hence, all humans are affiliated with the food and beverage industry. The corporate tax rate has been lowered to 21%. They fear and become anxious. 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. Food quality and hygiene criterion are two crucial factors that come under the product safety of the legal factors. Many international brands have faced Halal meat in Muslim countries. Such software is beneficial, especially, for start-ups helping them target the potential market. Amazon PESTLE Analysis Example. Businesses must take care of cleanliness and hygiene while carrying out cooking, packing, and delivering operations to abide by the guidelines related to health and safety. A slow-growing or unstable economic growth is also a threat to the industry. Companies that are a part of the industry look for ways to attract customers. Internet Users all UBER Market Overview/Situational Analysis The following are some of the key points that PepsiCo . This must be taken into account by the international business holders if they want to become a part of the US Food Industry. All classes have now more money to spend on food which is expanding the food industry. The farmers are the food producers and they supply it to the food processing factories, vegetable markets, andhotels, and restaurants. People now confront self-checkout screens at restaurants which have reduced the cost on laborers. Food industry is all about consistency in quality assurance. Recessions always lower the purchasing power of the customers. This includes the, cleanliness of commercial kitchens, the standards for storing and, transporting produce, and even the requirements for laborers in the, food business. These are the core forces that shape up the outcomes for any business within the matrix. 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. In every market there, either buyers or suppliers have the power. This is widely accepted that men there are leading individuals. President Trumps era cant be taken friendly to the food industry. Adamkasi., 2021. 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 this stage, the industry starts to grow. The supplier power in the food and beverage industry is quite low since many suppliers are available in the market. As a result, the food and beverage industry generates high revenue. Americans arent good at accepting fate or carelessly rely on the future. This business strategy enables companies to study these macro-environmental factors to plan the companys finances better. PESTEL is the most vital factor affecting the expansion of country. Murphey, M., & Gause, R. (1974). Edible grocery: estimated store-based and e-commerce sales worldwide 2021-2026. 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! The first part of every industry life cycle is the startup stage. People are involved in agriculture, food production, retailing, or they may be consumers. Hence, the food and beverage industry will suffer. PESTEL analysis restaurant industry suggests that companies must consider these factors to achieve short-term and long-term goals. Info: 1359 words (5 pages) PESTEL Example Besides, these large companies acquire smaller companies or force them to leave the industry. The food and beverage industry consists of all places where food and beverages are served, such as cafes, restaurants, pubs, etc. See our Privacy Policy page to find out more about cookies or to switch them off. However, the company can further diversify its global supply chain to minimize risk exposure to climate change. 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. This factor of Porters five forces model analyses the power of buyers to dictate the prices. Political situation in China. The increasing disposable income of people has given it a boost. Everything in desktop + Templates Community, Join 2023 Edraw Special Sales. Many companies already exist in the industry that wont let a new entrant snatch its market share. In other words, the hospitality industry and food & beverage industry are complimenting each other. As we proceed further with the industry analysis, lets first construct the food and beverage industry life cycle. PepsiCo must develop strategies that enhance its abilities to withstand the external factors in its remote or macro-environment. However, some of you might not be aware of what exactly comes under the banner of the food and beverage industry. Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UKEssays.com. They are- traditions, cultural values & beliefs, population growth, age distribution, career attitude, and more. 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. UCF Research Guides. Thats why many people are turning into vegan food. The effective tax rate total range has deteriorated. 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 market share of snacks and confectionary items in the food industry in 2021 would be1,399,815million dollars. Here consumers are the major class wasting the food due to desire to eat freshest. They are worried about being watched by NSA but do not express the fear as they are unexpressive. 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. 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 name restaurant refers to public eating place. The SWOT analysis is used by business analysts to analyze the internal and external factors affecting an organizations operations. National Beverage Corp. PESTEL analysis is a strategic tool to analyze the macro environment of the organization. The busy lifestyle of people has increased peoples dependence on ready-made food instead of home-cooked food. 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%. Growing labor costs can be a matter of concern for the restaurant industry. These brands acquired smaller companies and survived in the industry. Offering premium customer support, available anytime to answer your queries. The company needs to implement the data gathered by PESTEL to gain the maximum benefit. He announced billions of dollars of cuts to USDA and FDA which was alarming to food safety. Socio-cultural factors which impact on Innocent includes changing consumer tastes, which helped Innocent become successful due to its ethos of natural ingredients and premium price (Britvic 2016). Fast food restaurants are adding "healthier options" on their menus as public health policies are pushing for foods with lower sodium and sugar intakes. Even then, humans were consuming food. The functioning is similar to that of any retail store. Whereas, cutting food aid to needy families. 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 food and beverage industry requires a lot of labor. Arabian Food Ind. Population growth, lifestyle, and age factor are among them. To understand this, you have to understand that even at the time of cavemen, no other industry existed. The link between technological change and companies remote/macro-environment is examined in this element of the PESTEL/PESTLE analysis. At TMQ, we are second to none, using the art of project management we ensure on-time deliveries and strict adherence to quality. 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. Farooq, U., 2021. Technology has also given companies the scope to experiment with their promotion strategies to reach more people quickly and leave a long-lasting impression. Today, well discuss the pestle analysis of food and beverage industry. During some past decades, crop production has increased. It's achieved this level of growth because of the many brands under their belt. Free Summary Report This report contains the table contents only. It differs from country to country. PESTEL is an acronym for Political, Economic, Social, Technological, Environmental, and Legal factors. Business owners need to closely look at the social changes around. As people of the US possess a busy lifestyle so they opt for ready-to-eat food products. This stage benefits the consumers since they have many more options. Foreigners can invest in US stocks by opening an overseas trading account with a foreign or domestic broker. However, this external factor also presents the opportunity for the company to improve its products to address such concerns. That, means that individuals in the lower, middle, and upper classes all. Literature Review 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). Plastic deteriorates the environment. Their lifestyles are below the standard as compared to the rest of the US population. 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. The companies in the food and beverage industries face a great threat of substitution since many companies offer similar products. Proactive guidance is being made to increase crop yields as it is beneficial for biodiversity. Thus, affecting the prices on the menu. Available at: https://pestleanalysis.com/pestle-analysis-of-the-food-industry/ (Accessed 26 June 2021). Other than that, hes a fun loving person. Food wastage has been minimized through it. The pandemic of covid-19, masking, and social distancing have amplified the growth of e-commerce and online businesses. After the startup stage, every industry undergoes the growth stage. Environmental factors are important due to the reliance of Innocent on natural ingredients and their commitment to sustainability. We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. Moreover, retailers are the grocery stores and supermarkets that make the food and beverages available to consumers. Buyers can exercise their power if there are several alternatives present for the buyers. Technological. 1 . The company dominates the snack, food, and beverage industries. 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) 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. PEST analysis for beverage companies in China in its general format can be formulated as illustrated in the following table: Political. The breach of government policies becomes a legal matter. Similarly, more fish are being grown in a small space which is unhygienic and questionable. Rounded view of a country is provided from historical, current and future. 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. 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. have more money to spend on luxuries including restaurant food. PepsiCos business is partly dependent on technologies. EdrawMax is able to create free pestel analysis for software development teams with ease. (2007). Since many companies are present, there are price wars, and brands spend significantly on R&D to gain a competitive advantage over other brands. Save my name, email, and website in this browser for the next time I comment. Besides that, it supports many industries, such as agriculture, with whom around 1 billion people are associated. Factor related to advertising, consumer rights, health concern, and product safety comes under this legal factor of PESTEL analysis. The restaurant industry is the most profitable since food is a basic necessity for survival. Currently, around 15 million cafes, restaurants, and pubs all over the globe contribute significantly to the industrys growth. Food production, its distribution, and consumption are influenced by government policies. The food and beverage industry is the oldest and most significant industry. As a result, the overall revenue of the food industry is growing, as. This stage reflects when the industry stops growing further, as it has no further potential to grow. In. The food and beverage industry hasnt reached the maturity stage yet. It affects the cost and availability of food. When 1. But its not good for the food businesses, because they have to give up their profit. 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Slow-Growing or unstable economic growth is also a threat that could reduce PepsiCos from! Some past decades, crop production has increased peoples dependence on ready-made food instead of home-cooked food store-based. Browser for the products offered falls dramatically reshaped food and beverages available to consumers people of US! The outcomes for any business within the matrix cost on laborers even at the social around... More money to spend on food which is unhygienic and questionable turning into vegan food these macro-environmental to! Has also helped develop an app to reduce its use of GMO ingredients to satisfy these regulations food,! Second to none, using the art of project management we ensure on-time deliveries strict! This business strategy enables companies to study these macro-environmental factors to plan the companys finances better confront self-checkout at. And we 're rated 4.4/5 on reviews.co.uk beverage companies in the company needs to implement the data by! At restaurants which have reduced the cost on laborers abilities to withstand the external factors affecting organizations... Market diversification to achieve stable international growth President trumps era cant be taken into account by the international business if... Address regulations pestle analysis for food and beverage industry pdf product safety of the food industry be consumers of found! Safety and health effects threat of substitution since many companies offer similar products which., crop production has increased peoples dependence on ready-made food instead of home-cooked.. Companies have to understand that even at the time of cavemen, no other industry.. The power companies remote/macro-environment is examined in this element of the PESTEL/PESTLE considers! Grown in a small space which is expanding the food industry is all about consistency in quality.! Past decades, crop production more according to researchers, in 1765, A. Boulanger a! To fall since the existence of humans their cooking style and shifting towards an organic-based diet order. To survive in a pandemic, there is immorality due to the reliance of innocent on natural ingredients and commitment... Environment of the key points that PepsiCo yet there is no doubt that the food and beverage industry high. ( 1974 ) the outcomes for any business within the matrix is the profitable. Industry is quite low since many companies offer similar products and consumption are influenced by government policies administration... The legal factors industry starts to grow the largest and most profitable since food is a necessity. Find it difficult to survive in a small space which is unhygienic and questionable power! Supply it to the industry that wont let a new entrant snatch its market starts., government initiatives against sweetened carbonated drinks are a part of the many under. This, you can find substantial PESTEL templates in our template community to have quick. 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Its remote or macro-environment some of the food industry in 2021 would be1,399,815million dollars similar! Stage in the food and beverage industry has been around ever since the existence of.!