Chocolate is a food item from ground and roasted cocoa beans, and it could be in the form of solid, liquid, powder, or paste form. The cacao tree has been a great source of chocolate for the past over 5300 years. Today, we’ll discuss the PESTLE analysis of Chocolate Industry; it focuses on external environmental factors like; political, economic, social, technological, legal, and environmental factors.
Political Factors Impacting Chocolate Industry
Some of the main political factors in the Chocolate Industry PESTLE analysis are as follows;
I-Government Regulation
The health and food safety government regulations are very strict and tight for the Chocolate Companies. They focus on areas like consumer protection laws, health and food safety requirements, dietary standards, labor laws, ethical sourcing practices, and others. However, the objective of strict government regulations in various areas is to ensure food safety and protect the health of ordinary consumers.
II-Trade Policies
Chocolate Companies procure cocoa beans from various countries across the globe. That’s where the government trade, import, and export policies come into play and it is highly dependent on the country’s foreign policy and diplomatic relations. For instance, if a country has better relations with the cocoa producing companies, they would relax the trade tariff and import and export policies.
III-Political Unrest
The stable political environment plays a key role in the growth of Chocolate Companies. The cocoa bean-producing countries are Ivory Coast, Ghana, Nigeria, Indonesia, Ecuador, Cameroon, Brazil, Peru, Colombia, and others. Most of the cocoa beans producing countries have an unstable political environment; roadblocks and processions disrupt the supply chain and distribution of cocoa beans to the production facilities.
Economic Factors Affecting Chocolate Industry
Some of the main economic factors in the Chocolate Industry PESTLE analysis are as follows;
I-Economic Growth
The economic growth of the country plays a key role in the growth and retail sales of Chocolate Companies. For instance, when a country has higher employment and people have multiple employment opportunities, they would have sufficient disposable income. When people have sufficient disposable income, they spend it on the chocolate candies and bar snacks they like.
II-Currency Exchange Rate
Chocolate Companies procure cocoa beans from multiple countries in various currencies. The currency exchange rate market is highly unstable and it keeps on changing regularly due to multiple social, political, and geographical factors. A small change in currency exchange rate would negatively impact the cost and expenses of Chocolate Companies.
III-Inflation Rate
The inflation rate of the country directly impacts the retail sales of Chocolate Companies and the buying power of ordinary consumers. When the country has a higher inflation rate, then it means that the government is printing more currency notes than the required level, and it decreases the per unit value of all the currency notes. As a result, things become expensive for many ordinary people and they can’t afford to buy routine food and snack items.
Social Factors Impacting Chocolate Industry
Some of the main social factors in the Chocolate Industry PESTEL analysis are as follows;
I-High Demand
The demand for chocolate food and snacks has been increasing significantly for the past few years. This is due to the fact that chocolate has become a daily routine item for many sweet dishes and snacks. People love the unique taste and texture of chocolate and it presents a great opportunity for the Chocolate Companies to keep up with the growing demands of the customer market.
II-Dietary Trends
The consumer market has become highly cautious about their food and diet the type of food they’re putting into their bodies and its impact on us. Chocolate Companies should include dietary chocolate bars and candies with limited to no sugar levels. It allows them to target the health and diet-conscious customers market.
III-Health Benefits
Chocolate offers a lot of health benefits as it is good against cardiovascular diseases, improves blood pressure and brain function, boosts mood and energy levels, and various others. That’s why many people prefer chocolate as a part of their daily routine snacks.
Technological Factors Affecting the Chocolate Industry
Some of the main technological factors in the Chocolate Industry PESTEL analysis are as follows;
I-Automated Production Methods
Chocolate Companies are investing a significant amount of capital resources in the latest automated tools and equipment in the production and manufacturing facilities. It helps them to efficiently perform the cocoa bean roasting and grounding processes to save time and reduce the wastage of resources.
II-Advanced Technology
Chocolate Companies are also investing a lot of resources in the latest advanced technologies like AI, ML, data analytics, and other technologies. It allows them to accurately predict the demand for chocolate in the upcoming season; so that the company could avoid over-stocking and stock-out issues.
Legal Factors Impacting the Chocolate Industry
Some of the main legal factors in the Chocolate Industry PESTEL analysis are as follows;
Regulatory Compliance
Chocolate Companies need to comply with government regulations and policies of various countries. They comprise consumer protection laws, health and food safety laws, trade laws, labor laws, ethical sourcing, and responsible practices. Regulatory compliances would help them to smoothly perform their operations without any delays and disruption.
Environmental Factors Affecting Chocolate Industry
Some of the main environmental factors in the Chocolate Industry PESTEL analysis are as follows;
Sustainability Initiative
Chocolate Companies should make a strong commitment to environmental sustainability initiatives. It comprises investing in renewable sources of energy, ethical sourcing of raw materials and cocoa beans, and biodegradable packaging. It helps them to keep up with the growing environmental sustainability trends.
Conclusion: Chocolate Industry PESTLE Analysis |PESTEL Analysis of Chocolate Industry |External Environmental Analysis of Chocolate Industry | Strategic Analysis of Chocolate Industry
After an in-depth study of the pestle analysis of Chocolate Industry; we have realized that Chocolate is the most selling snack food item all over the world. If you are learning about the Chocolate Industry PESTLE analysis; then you should keep in mind the abovementioned external environmental factors like; political, economic, social, technological, legal, and environmental.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.
