Sugar Industry outlines the productions, manufacturing, processing, and marketing of sugars. According to an estimate, approximately 80% of the world’s sugar is extracted from the sugar cane; the remaining 20% is from the sugar beet. Today, we’ll discuss the PESTLE analysis of Sugar Industry; it focuses on external environment factors like; political, economical, social, technological, legal, and environmental factors.
Usage of Sugar in Following Products and Goods
- Bakery items
- Confectionary
- Candy
- Fast food
- Convenience food
- Soft drinks and beverages
Top Sugar Producing Companies
- Turkiye Fabrikalari, Turkey
- Thai Roong Ruang Sugar Group, Thailand
- Wilmar International, Singapore
- Louis Dreyfus, Netherlands
- Nordzucker Gmbh and Co, Germany
- Mitr Phol Sugar Corp, Thailand
- Tereos International, France
- British Sugar, UK
- Cosan SA Industria, Brazil
- Sudzucker AG, Germany
Political Factors Impacting Sugar Industry
Some of the main political factors in the Sugar Industry PESTLE analysis are as follows;
I-Government Regulations
The health and safety government regulations are very strict and tight for the Sugar Companies. They comprise various areas like consumer protection laws, labor laws, health and food safety laws, quality standards, sourcing practices, and production methods. However, the objective of strict government regulations is to ensure the health and food safety of ordinary consumers.
II-Trade Policies
Sugar Companies source sugar canes and other materials and supplies from various regions and markets across the globe. The trade policies of different countries are variable depending on the country’s foreign policy and diplomatic relations with the supplier countries. For instance, if the supplier and the procuring countries don’t have good trade relations, they impose strict regulations to reduce the trade with them.
III-Political Stability
Sugar Companies procure raw material and supplies from various countries. The political environment of the suppliers country plays a key role for the smooth flow of products and goods. For instance, if the supplier and procuring country is going through the political crisis, roadblocks, and procession; then it disrupts the distribution of sugar to the end consumers.
Economic Factors Affecting Sugar Industry
Some of the main economic factors in the Sugar Industry PESTLE analysis are as follows;
I-Economic Growth
The economic growth of the country plays a key role for the growth and retail sale of Sugar Companies. For instance, if the country’s economy is growing and proliferating, then it creates multiple employment opportunities for its people. When people have stable jobs and sufficient disposable income, they are willing to spend it on the luxury food items containing sugar.
II-Currency Exchange Rate
Sugar Companies are running and operating their business in various countries in multiple currencies. The currency exchange rate market is highly unstable and keeps fluctuating due to multiple factors. A small change in currency exchange rate would increase the cost and expenses of Sugar Companies, and it negatively impacts their retail sales and profitability.
III-Expensive Raw Material
The material cost has increased significantly for Sugar Companies. It is due to multiple factors like increasing labor cost, high fuel prices, expensive material, and high sourcing and production and harvesting cost. Collectively, these all factors have increased the overall production and manufacturing cost.
Social Factors Impacting Sugar Industry
Some of the main social factors in the Sugar Industry PESTEL analysis are as follows;
I-Obesity and High Cholesterol
Many research studies have shown that sugar is the leading cause of higher obesity and cholesterol levels among people. Many doctors and healthcare professionals advise and suggest that people decrease and limit the consumption of sugar in their routine lives.
II-Diet Conscious
The consumer market has become highly cautious about their food and diet. They are making conscious effort of reducing the consumption sugar based products and goods in their routine lives. However, the objective is to lead a healthy and conscious life with limited risk of higher sugar and cholesterol level.
Technological Factors Affecting Sugar Industry
Some of the main technological factors in the Sugar Industry PESTEL analysis are as follows;
I-Automation Technology
Sugar Companies are implementing the automation technology in their production, manufacturing, sourcing and harvesting methods. The automation technology helps them to perform various functions and operations with limited workforce. As a result, it allows companies to achieve efficiency and reduces the wastage of resources.
II-Advanced Technology
Sugar Companies are investing a significant amount of capital resources on the latest advanced technology like AI, ML, and data analytics. It allows them to efficiently manage their operations and accurately predict the demand of sugar in the upcoming season to avoid stock out and over stocking issues.
Legal Factors Impacting Sugar Industry
Some of the main legal factors in the Sugar Industry PESTEL analysis are as follows;
Regulatory Compliance
Sugar Companies need to comply with the government regulations and policies of various countries. They comprise trade policies, import and export regulations, taxation laws, labor laws, health and food safety policies, quality standards, and others. Regulatory compliance would help it to smoothly perform its operations without any delays and disruption.
Environmental Factors Affecting Sugar Industry
Some of the main environmental factors in the Sugar Industry PESTEL analysis are as follows;
Sustainability Initiative
Sugar Companies should make a strong commitment to the environmental sustainability initiatives. It comprises of investing in the renewable sources of energy, biodegradable packaging, and ethical sourcing practices to reduce the carbon emission rate. It helps them to keep up with the growing environmental sustainability trends.
Conclusion: Sugar Industry PESTLE Analysis |PESTEL Analysis of Sugar Industry |External Environmental Analysis of Sugar Industry | Strategic Analysis of Sugar Industry
After an in-depth study of the pestle analysis of Sugar Industry; we have realized that Sugar Companies hold a significant capital market share in the global market. If you are learning about the Sugar Industry PESTLE analysis; then you should keep in mind the abovementioned external environmental factors like; political, economical, 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.
