Snack Food often contains less than 200 calories and they’re consumed and eaten between meals. There are various forms of snacks ranging from packaged food, processed items, nuts, sandwiches, fruits, and the fresh ingredients cooked at homes. Today, we’ll discuss the PESTLE analysis of Snack Food Industry; it focuses on external environment factors like; political, economical, social, technological, legal, and environmental factors.
Political Factors Impacting Snack Food Industry
Some of the main political factors in the Snack Food Industry PESTLE analysis are as follows;
I-Government Regulations
The health and safety government regulations are very strict and tight for snack food manufacturing companies. They focus on areas like health and safety regulations, consumer protection laws, dietary requirements, labor laws, ingredient disclosure, labeling and packaging, and others. However, the objective of strict government regulations is to ensure the health and safety of ordinary consumers while eating snacks.
II-Trade Policies
Snack Food Companies procure food ingredients and raw supplies from various countries across the globe. The trade policies of different countries are variable depending on their foreign policy, diplomatic relations, and the type of government in power. For instance, if the country doesn’t have good relations with the US or other countries, they would impose strict trade regulations and high taxes to reduce trade with the particular country.
III-Political Unrest
A stable political environment plays a critical role in the growth of businesses and companies. For instance, when the country is going through political turmoil, roadblocks, procession, power outage, and other activities; then it disrupts the supply chain and distribution operations of the company. When Snack Food companies don’t receive raw supplies on time, then it disrupts their production and manufacturing operations.
Economic Factors Affecting Snack Food Industry
Some of the main economic factors in the Snack Food Industry PESTLE analysis are as follows;
I-Spending Habits
Consumer spending habits are the key economic indicators and they directly impact the retail sales of businesses and companies. According to an estimate by the US Bureau of Economic Analysis, the personal consumption of consumers on snack food items has increased by 2.1%. It presents great growth opportunities for the Snack Food manufacturing companies to expand their snack food business operations.
II-Economic Growth
The overall economic growth of the country plays a key role in the growth of businesses and companies. When there are plentiful employment opportunities, people can easily find jobs, and they have stable incomes and sufficient financial resources; they’re willing to spend it on their favorite snacks. However, when people don’t have enough disposable income, they would reduce their spending to the necessary products only.
III-Expensive Supply Chain
The cost of raw materials and food ingredients has increased significantly in recent years. It is due to multiple factors like high sourcing costs, scarcity of resources, high production and processing costs, and distribution expenses. An expensive supply chain and distribution network have further increased the material cost.
Social Factors Impacting Snack Food Industry
Some of the main social factors in the Snack Food Industry PESTEL analysis are as follows;
I-Consumer Needs and Preferences
The consumer market needs and preferences are highly unpredictable and they’re changing in every season. For instance, the demand for nuts is high in one season, and the demand for sunflower seeds would increase in the other season. Snack Food Companies should pay heed to the needs of preferences of the customer market, and offer them the relevant products accordingly.
II-Healthy Diet Trends
The consumer market has become highly cautious about their health and dietary products. They want low-sugar, less oily, and low-calorie food items in their diet that are good for their stomach, heart, and overall health. Usually, Snack Food items fall under the category of dietary items, and they would increase the company’s sales to a great extent.
III-Cultural Factors
Cultural factors play a key role in impacting customers’ food choices. For instance, Middle Eastern and Muslim countries want Halal food for their diet, Indian and Sub-continent markets want spicy and vegetarian food, and the food taste of the Western market is a mixture of many. However, Snack Food Companies should become familiar with the cultural requirements of different countries.
Technological Factors Affecting Snack Food Industry
Some of the main technological factors in the Snack Food Industry PESTEL analysis are as follows;
I-E-commerce Platform
Snack Food Companies have invested a significant amount of capital resources in the development of their e-commerce platform and online store. It allowed them to offer a vast range of food items to online and digital customers. As a result, it helps them to amplify their customer’s market reach, network, and sales with the web platform and online portfolio.
II-Manufacturing Methods
Snack Food Companies are implementing the latest advanced automation technology, AI, and ML in their production, manufacturing, and processing operations. It allows them to efficiently perform their production operation with optimum results and reduces the wastage of resources. As a result, it helps them to achieve efficiency in their production and manufacturing operations.
Legal Factors Impacting Snack Food Industry
Some of the main legal factors in the Snack Food Industry PESTEL analysis are as follows;
Regulatory Compliance
Snack Food needs to comply with the government regulations and policies of different countries. They comprise health and food safety laws, consumer protection laws, labor laws, labeling and packaging, ingredient disclosure, and others. Regulatory compliance would help the Snack Food Companies to smoothly perform their production and processing operations without any delays and disruption.
Environmental Factors Affecting Snack Food Industry
Some of the main environmental factors in the Snack Food Industry PESTEL analysis are as follows;
Sustainability Initiative
Snack Food should make a strong commitment to environmental sustainability initiatives. It consists of investing in renewable sources of energy, biodegradable packaging, ethical sourcing, and social responsibility. It allows them to keep up with the growing environmental sustainability trends.
Conclusion: Snack Food Industry PESTLE Analysis |PESTEL Analysis of Snack Food Industry |External Environmental Analysis of Snack Food Industry | Strategic Analysis of Snack Food Industry
After an in-depth study of the pestle analysis of Snack Food Industry; we have realized that Snack Food is the world’s leading retail manufacturing brand. If you are learning about the Snack Food 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.
