Question

Question: In about 150 words, analyze how Social, Economic, Political and Technological factors might affect the food industry. Define each factor with example in context.

Food Industry

There’s no denying that the food industry is one of the strongest in the world after all, everyone needs to eat! Indeed, there are some interesting dynamics at play in this space which make it unclear just how profitable food businesses will continue to be.

Governments across the world have expansive regulatory frameworks for every aspect of the food industry. This includes the cleanliness of commercial kitchens, the standards for storing and transporting produce, and even the requirements for laborers in the food business. Without a doubt, this makes the food industry one of the most tightly regulated industries of all. On the plus side, this ensures that consumers aren’t exposed to poor quality nutrition, but the complexities of regulation certainly take away from the margins of the food business.

We’re seeing various types of automation more and more in the food industry. Perhaps the best example is the use of self-checkout screens at fast food venues such as McDonalds, but it’s not the only one! Just recently, social media platforms went crazy as viral footage of a hotel’s robot cooking up omelets began to spread. As we find more ways to use technology including robots in the food industry, there will be less need for laborers. Overall, this is a good thing for the industry, as it will allow businesses to improve profitability and reduce the likelihood of human error.

As a general trend, Disposable incomes are growing for a reason: laborers are earning more money these days. On the whole, the cost of hiring workers is increasing across all industries. This is caused by not only a growing demand for employees, but also higher and higher government expectations for minimum wages. As in many other industries, the effect of increasing labor costs is simple: less margin for the owner of the business, and thus less profit.

Nowadays, scientists know more about the relationship between food and our bodies than ever before. There’s a clear relationship between the food we eat and our personal health, and consumers are conscious of this. As a result, many individuals are looking for healthier ways to fuel their bodies. This doesn’t necessarily have a positive or negative effect on the food industry, but it means that businesses will have to adapt to stay relevant. For example, fast food businesses will likely have to move away from traditional, high-calorie fried foods towards healthier alternatives like salads. Consumers are also more knowledgeable about their individual dietary restrictions. For example, many individuals now understand the negative impact of gluten in those with Celiac disease. This has led to consumers expecting greater understanding on behalf of those who work in the food industry. Once again, this isn’t necessarily a bad thing, but it means that the food industry will have to make changes to keep clients happy.

Answer 1

1. Political Factors: Political factors are the set of rules,regulations or instructions that are set by the government of the country in which organization is running. This can be Government policy ,tax policy, trade protection, copy rights etc. This all can effect the working of the food industry.

For ex : fssi approval for any food products is must, after that only the product is allowed to sell in the market. for this approval many test to be conducted, guidelines to be followed and other mandatory things which require to get the product approved. This all leads to increase in the price of the food product and because of competition price cannot be much exceeded which decreases the profit margin of the company and thus effecting it.

2. Economical Factor :The state of the country, unemployment,seasonal factors,labour cost,Availability of credit, rawmaterial cost, etc all effects the food industry.

Today readymade foods are more in demand as per the customer choices, which sometimes are not healthy but are available in cheap price , which healthier products are costly which are mostly skipped by most of the customers and thus which effecting the food industry.

3.Social Factors : It includes, social behavior, Customer attitude and current trend.

For Ex: Before MC Donald's restaurant was only with Grab and go type in which there are no interiors, music, etc but now todays trend is Totally different. Now MC Donald's restaurant are full of lightings, interiors, music, ac, well cleaned tables and chairs and maintaining proper hygiene so that customer can stay and invest the leisure time while having delicious meal provided the restaurant.

4. Technological Factors: Today trend is the use of technology , internet and smart phone is increased and most of the customer are using this technologies to order food of their choice, make online payments and get the food delivered at their door step.

Thus all this factors effects the food industry