Confectionery is the art of cooking unique sweet food items and they’re rich in carbohydrates and sugar. The Bakery confectionery items comprise cakes, pastries, and baked items. Today, we’ll discuss the PESTLE analysis of Confectionery Industry; it focuses on external environmental factors like; political, economic, social, technological, legal, and environmental factors.
Political Factors Impacting Confectionery Industry
Some of the main political factors in the Confectionery Industry PESTLE analysis are as follows;
I-Government Regulations
The consumer protection, health, and food safety government regulations are very strict and tight for the Confectionery Companies. They focus on areas like consumer protection laws, labor laws, health and food safety policy, sugar criteria, packaging and labeling, ingredient disclosure, and others. Regulatory compliance would help them to smoothly perform their confectionary operations without any delays and disruption.
II-Trade Policies
Confectionery Companies procure food ingredients, raw materials, and supplies from various countries all over the world. That’s where the role of a country’s trade policy comes into play, and it is highly dependent on the country’s foreign policy and diplomatic relations. If the procuring country doesn’t have good relations with the suppliers, they would introduce laws and regulations to decrease the trade with them.
III-Political Stability
The stable political environment of the country plays a key role in the growth of businesses and companies. When the suppliers’ country is going through political turmoil, procession, and roadblocks, then it disrupts the supply chain and distribution of raw supplies and materials to the end consumers.
Economic Factors Affecting Confectionery Industry
Some of the main economic factors in the Confectionery Industry PESTLE analysis are as follows;
I-Spending Habits
The spending habits of consumers on particular types of goods play a key role in the retail sales of Confectionery Companies. According to an estimate, the sale of confectionery products has reached approximately 36 billion USD by the end of 2022 in the US. It shows the high spending and higher growth rate of the Confectionery business market.
II-Economic Growth
The economic growth of the country plays a key role in the growth of Confectionery Companies. The economic growth of the country implies a higher employment rate and people would have multiple employment opportunities. According to an estimate, the disposable income of the US customer market has increased by 8.5%. When people have sufficient disposable income, they would spend it on products they love.
III-Currency Exchange Rate
Confectionery Companies procure raw materials and supplies from various countries in multiple currencies. The currency exchange rate market is highly unstable and volatile and it keeps changing due to various political and economic factors. A small fluctuation in currency exchange rate would negatively impact the cost, expenses, revenue, and sales of Confectionery Companies.
Social Factors Impacting Confectionery Industry
Some of the main social factors in the Confectionery Industry PESTEL analysis are as follows;
I-Demographic Shift
The Millennials and Generation-Z comprise a majority portion of the customer market. Usually, the younger target audience demographic consumes confectionery items like candies and snacks. Confectionery Companies should pay great heed to the changing demographics of the customer market, they need to adjust their products relevant to the demands of the customer market.
II-Diet Conscious
The consumer market has become highly cautious about their health, wellness, fitness, and diet. They are willing to spend extra on organic, dietary, low-sugar, and low-fat products and goods. Confectionery Companies should healthy and dietary confectionery food items to keep up with the growing demands and needs of the customers market.
III-Cultural Festivals
Confectionery Companies should become familiar with the cultural festivals in various countries. The cultural festivals are the top seasons for the retail sale of confectionery items. However, the confectionery product demand and taste of customer markets are different in various countries. Confectionery Companies should offer the right and relevant products in various markets.
Technological Factors Affecting Confectionery Industry
Some of the main technological factors in the Confectionery Industry PESTEL analysis are as follows;
I-Automation Technology
Confectionery Companies are implementing advanced automation technology in their production and manufacturing facilities. It allows them to smoothly perform their various operations ranging from receiving raw material, processing, mixing in the right quantity, right formulation, and producing the final product. However, automation technology helps them to efficiently perform their operation without wasting any resources.
II-Innovative Ingredients
Confectionery Companies are investing a significant amount of capital resources in research and development. It allows them to find and develop innovative ingredients and materials for the production of confectionery products. As a result, it helps them to reduce the risk factor and decrease the company’s reliance on a few products.
III-Online Sale and E-commerce Growth
Confectionery Companies are investing a significant amount of capital resources in the development of their e-commerce platform and online store. It allows them to target online shoppers and digital users. The retail sale of Confectionery Companies has increased a lot in recent years because of its online store and e-commerce platform.
Legal Factors Impacting Confectionery Industry
Some of the main legal factors in the Confectionery Industry PESTEL analysis are as follows;
Regulatory Compliance
Confectionery Companies should comply with the government regulations and policies of various countries. It focuses on consumer protection laws, health and food safety regulations, packaging and labeling, data privacy laws, and others. The regulatory compliance would help them to smoothly perform their operations without any delays and disruption.
Environmental Factors Affecting Confectionery Industry
Some of the main environmental factors in the Confectionery Industry PESTEL analysis are as follows;
Sustainability Initiative
Confectionery Companies need to make a strong commitment to environmental sustainability initiatives. It comprises investing in renewable sources of energy, ethical sourcing of raw materials, and biodegradable packaging to reduce the carbon emission rate. However, it helps them to keep up with the growing environmental sustainability trends of the customer market.
Conclusion: Confectionery Industry PESTLE Analysis |PESTEL Analysis of Confectionery Industry |External Environmental Analysis of Confectionery Industry | Strategic Analysis of Confectionery Industry
After an in-depth study of the pestle analysis of Confectionery Industry; we have realized that Confectionery Companies are the top-growing business ventures. If you are learning about the Confectionery 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.
