The practice of agriculture started when people started to plant crops and fruits to meet consumers demands. This element of the PESTEL/PESTLE analysis considers the ecological trends and issues that affect consumers, employees, and companies remote or macro-environment. Technological developments have made the internet available to the masses, and businesses have started to market their products on social media. Detailed PESTEL Analysis of Restaurant Industry. This impacted the US food Industry. A lot of food is wasted by the food and beverage industry. Then we assessed the industry competition level with the help of Porters Five Forces Model. As the industry is growing, more food outlets have been established worldwide. The PESTEL/PESTLE analysis model can be used to satisfy this need. Copyright 2003 - 2023 - UKEssays is a trading name of Business Bliss Consultants FZE, a company registered in United Arab Emirates. The farms today are more like industrial facilities rather than family farms. Business owners need to closely look at the social changes around. One of the many reasons for this success is that this industry offers a great deal of variety, right from price, cuisine, to ambiance. This is true for our PEST analysis example for the food industry. There are several brands present in the industry that want to maximize their share. As a result, many people have stopped eating fast food. Its growth volume would increase by 0.7% by end of 2022. As we proceed further with the industry analysis, lets first construct the food and beverage industry life cycle. 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. Free resources to assist you with your university studies! Also, the tax realm there is dynamic. Lets identify some external factors impacting the food and beverage industry. This business strategy enables companies to study these macro-environmental factors to plan the companys finances better. 'PESTLE Analysis of the Food Industry', PESTLE Analysis, [online]. 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. Proactive guidance is being made to increase crop yields as it is beneficial for biodiversity. This endangered citizenship and migration status has resulted in a lack of economic power. The food and beverage industry is an ever-growing industry. This is widely accepted that men there are leading individuals. Merit is the only priority. Investors are eager to assess the situation before investing in this business, owing to the growing competition in this sector. 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). The increased environmental concern of the US population has created a behavior to eat green. Many international brands have faced Halal meat in Muslim countries. This factor discusses how threatened companies are from getting substituted by customers. This emission is expected to increase up to 30-40% by 2050 due to the rising population. Many of PepsiCos consumers follow sociocultural trends. To keep this position, PepsiCos strategic decision-making processes must account for the issues outlined in this PESTEL/PESTLE analysis. Food policies generally affect wholesalers, retailers, consumers, and as well as farmers. This shift cant be taken in a negative connotation, but the industry must recognize the shift for future concerns. Thanks to the peoples inclination towards experimenting with food and their ever-changing preferences. As people of the US possess a busy lifestyle so they opt for ready-to-eat food products. This PESTEL/PESTLE analysis indicates that the company has many opportunities and a number of threats regarding its growth and international expansion. Food Processing Industries' effective tax rate has increased up to 22.95% compared to the previous quarter. 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). To conduct the environmental analysis, we will conduct the SWOT and the PESTLE analysis of the food and beverage industry. PepsiCo SWOT Analysis: Strengths A massive portfolio. In the end, every industry reaches the decline stage. 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 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) PESTLE Analysis: Telecom Industry UK 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. 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. Hence, the food and beverage industry existed. Economy recovery efforts were drawn through stimulating funds. However, this external factor also presents the opportunity for the company to improve its products to address such concerns. Bizfluent. 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. As a result, the demand for food and beverage products has increased significantly. Either way, it wont impact the food businesses, but they should be aware of the impact that their business would have on the environment. Our main markets are Russia, Eastern Europe and The Middle East. According to researchers, in 1765, A. Boulanger, a soup vendor, first introduced the restaurant concept. Similarly, the company can improve products to address regulations about product safety and health effects. The food and beverage industry uses a lot of plastic packaging. 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. Background of Restaurant Industry France takes pride in opening the first restaurant ever in the world. Farooq, U., 2021. Rounded view of a country is provided from historical, current and future. 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. Long-term orientation means maintaining control over future concerns keeping in view the past occurrences. This model consists of five stages. On the plus side, this, ensures that consumers arent exposed to poor quality nutrition, but, the complexities of regulation certainly take away from the margins. Hence, less competition exists within the industry. It affects the cost and availability of food. Spain is a booming economy with itspopulation to be around46.4 millionand $25864.72 GDP per capita. Technological factors include new methods of production to include issues such as recycling. These steps can help you get back, Copyright 2020 Weberience LLC. Weather affects the food industry as it impacts the area, intensity, and yield of crop production. Bush, T., 2021. The laborers hired for the farm face many difficulties in their daily life. Food companies have to follow very strict food safety and other health protocols. Technology adds beneficial products and services, thus taking the business to a wider domain. In 2022, the food and beverage industry grew to $6.3 trillion at 8.7%. Lets move ahead and analyze how competitive the food and beverage industry is. Since the industry is in its initial days, people are unaware of the industry. In this stage, small companies exit the industry since they find it difficult to survive in a highly competitive market. Food production, its distribution, and consumption are influenced by government policies. Nonetheless, all businesses are controlled by these external factors. There's no denying that the food industry is one of the strongest in the world after all, everyone needs to eat! 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. Everybody in the organization must clearly understand and accept this. In the maturity stage, the industry is at its peak since it maximizes its market share. France takes pride in opening the first restaurant ever in the world. 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. Technological innovations in various business processes. The restaurant industry is thriving! The link between technological change and companies remote/macro-environment is examined in this element of the PESTEL/PESTLE analysis. The PESTLE analysis (Political, Economic, Socio-Cultural, Technological, Legal, Environmental) will analyse the macro framework within which Innocent operates . 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. Besides that, it supports many industries, such as agriculture, with whom around 1 billion people are associated. However, it is said that the first restaurant ever established was in 1765. PESTEL is one such business tool that empowers investors to evaluate the external factors that directly impact the business environment. President Trumps era cant be taken friendly to the food industry. 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. Because it causes diabetes, higher blood pressure, and other health issues. It is not just famous in France, but worldwide. Industry Analysis. The pandemic of covid-19, masking, and social distancing have amplified the growth of e-commerce and online businesses. Based on the Restaurant Industry PESTEL analysis, one can say that the company has lost its initial glory. Murphey, M., & Gause, R. (1974). After completing our industry analysis, we assume that this article has made you fully aware of the food and beverage industry. Disclaimer: This work was produced by one of our academic writers to help university students with their studies. Porters five forces model is a business tool companies use to assess the level of competition in an industry. 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. According to the UNs report, after harvesting, 13.3% of food is wasted, and consumers waste 17% of the total food. The goal is to ensure the safety and nutrition of ordinary people who just want to eat and fill their appetite. According to an estimate, the volume of the food market would be around 2,782,974 m kg by the end of 2025. A food business should follow these trends and launch its online platform in order to attract more people. New investments are preferred at a local level. Political stability ensures how much a business will flourish. Potential conflict between China and USA. Available at: https://freepestelanalysis.com/pestel-pestle-analysis-of-restaurant-industry/ (Accessed 26 June 2021). Workers in the industry now demand higher wages, whereas the government expects lower wages as the owner of the business would have less profit. The global market presents challenges that threaten PepsiCo while creating opportunities for improvement. Restructuring of existing strategies can help the brand bounce back to the hot spot it was initially enjoying. The food and beverage industry is one of the biggest industries since it has a broad customer base. These are the core forces that shape up the outcomes for any business within the matrix. In the US, 3000 acres of land are lost each day which imposes an increased burden on the remaining land. The farmers are the food producers and they supply it to the food processing factories, vegetable markets, andhotels, and restaurants. 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