Competitive Analysis
1 Running head: MARKET ANALYSIS
Market Analysis
Tyran Hunt
University of Maryland
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Introduction
The food industry has been growing tremendously in both the food service and food processing sectors. This growth is expected to increase even further in future due to variations in the consumer’s income, increase of the younger population, growth and development of the rural areas and less developed regions and adoption of Western culture where most people are now opting to eat out further giving this industry a chance for growth. This paper purposes to conduct a market analysis of the food industry to determine the threats and opportunities it is facing in the world today.
Demographic Changes
There are three demographic factors that are significantly affecting the food industry. They are an aging population, smaller households, and a more ethnically diverse population. These changes in society have led to the growth and development of various drivers in food demand, such as an increase in demand for ethnic dishes, wellness foods, a rise in demand for convenience and indulgence as an attribute. All these changes present both opportunities and challenges to the food industry. Small households tend to have more income to spend as they please and may have a higher priority for convenience. Since most people are now working in the current labor-intensive era, many people living in smaller households have less time for cooking and may choose to eat out or easy to make meals. Women have a better interest in the environment than men, and they may find packaged products more appealing. Also, single women with kids or without may also place a premium on food products that consume less time.
The aging population is also an aspect due to an increase in the level of immigration by younger people. The elderly differs in their nutritional needs when compared to young people. Therefore, packaging and convenience for single served meals will be essential for most of this population. Also, some will be limited in regard to income, and they will be very conscious of value. About ethnic diversity, most there have been more birthrates among ethnic groups, and immigration has increased. Particularly Hispanics and Asians have seen considerable growth. Diversity breeds different tastes and preferences, creating an opportunity for many food companies. For instance, some racial and ethnic foods may want to try out foreign foods to satisfy their desires and improve their menu choices (Arroyo, Liñan & Martínez, 2020).
Psychographic changes
Psychographics refers to a quantitative methodology for analyzing consumers according to their psychological traits and characteristics such as desires, values, interests, goals, and lifestyle choices. The food industry is changing due to how robust macro-economic fundamentals and the varying socio-economic scene are converting the old and out scale outlets into more organized retail outlets to meet the changing needs of the discerning consumers. The ever-changing psychographics of consumers has totally transformed formats such as supermarkets, hypermarkets, convenience stores, etc. This clearly shows how consumers have changed in their psychographics.
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Being able to examine the psychographic changes is essential in anticipating the changing needs and wants that entrepreneurs can serve. It also facilitates efficiently and effectively building a brand and market to the target. Advertisers can be able to capitalize on impulse buying of food products, and businesses can use the knowledge for psychographics to get new customers, drive more targeted marketing campaigns, personalize connections with consumers, etc. Facebook is very prominent with regard to promotion and advertising, specifically due to their vast data on users that have helped them master psychographic segmentation. Users willingly and gladly share their values, opinions, lifestyle, and hobbies, etc. on this platform, and any people venturing into the food industry should take keynote of these tactics to analyze their customers and strategize their marketing goals. For instance, if food delivery services see that its customers deeply care about the environment, they should consider delivering food products in biodegradable containers (Arroyo, Liñan & Martínez, 2020).
Emerging technological advancements
Biotechnology is a type of technology involving living organisms, biological systems, or their derivatives that are utilized in making or modification of processes and products for a particular purpose. It finds its wide application in food technology and combines its operations with ICT and nanotechnology. Biotechnology in the food industry is used to produce dietary protein, preparing enzymes for food production; engineering of pro-, pre-, and symbiotic; functional foods such as pediatric and preventive foods; production of food ingredients inclusive of vitamins and functional mixtures. It is also involved in the deep processing of raw materials to mitigate waste products in this industry (Jeffcoat, 2020).
Nanotechnology has also evolved in the recent past, and it has a huge potential for transforming the food industry. Manufacturing products on a nanoscale affect the bioavailability, safety, and nutritional properties of the food, and it allows the molecular synthesis of new ingredients and products. The main aim of nanotechnology in the food sector is to enhance safety in food and processing industries, improve the nutritional value and taste of foods, detect any pathogen, functional food creation, and helps safeguard the environment and enhance the economic efficiency in transportation and storage. During food production, nanotechnology handles issues associated with the development of new functional materials, raw materials' processing on a micro- and nanoscale, and the creation of new techniques and equipment and machines for food processing (Hamad et al., 2018).
Also, ICT is being used to develop procedures in nano informatics and nanobiotechnology. Its mechanisms can be utilized to come up with high-quality concepts and project design assumptions. Computer techniques are useful in the acceleration of innovation development. The use of computations is significant in the initial stages of project development on a nanoscale and is used to make predictions of the structures of nano transport systems for certain drugs of molecular devices. Cognitive technologies are also being used in the food industry to develop functional foods that influence psychophysiology and human cognition in general. They are also combined with bionics and devices like the electronic nose and tongue to test products and enhance their safety. Social media platforms are being used to market food products. Also, technology is enabling digital payments such as contactless card payments
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(Santeramo et al., 2018). Therefore, people can order online through apps like glovo, and everything is delivered at their doorsteps.
Therefore, new technologies provide a transformation to the marketing mix by altering how companies market their products, and companies in this industry should keep updated on any technological advances and adapt their strategies to benefit from the opportunities and prevent threats.
Societal Changes
In the past, women concentrated on marriage, childbearing, and household chores. Currently, this traditional way of life has completely transformed due to education and women being able to work just like men. Basically, women have gained independence financially, and they no longer need marriages to sustain themselves. Women have less time to cook due to their work activity, which has significantly increased the amount of foods consumed away from home, and people now order take-outs, eat in restaurants, etc. also, women tend to have a need to constantly prove themselves as good cooks/wives, and this necessitates purchasing of some basic ingredients, and hence the food industry should focus on making high-quality ingredients. Also, the companies should put a focus on the imagery on the foods put to sale by using terms like health-giving to compensate for the consumer's non-involvement in the growth, preparation, and cooking of the food. Due to the change in the family size and the ways in which a housewife selects her food, the food industry has changed in terms of change in preservation methods like freezing, growth of ready-to-eat products like cream desserts, production of ready-cooked meals, and convenience products that only require reheating, growth of snack and fast-food market. Typically, the food industry has taken on the role previously handled by women. It has supported her labor demand and met her psychological needs. Marketers are obliged to keep up with the cultural and social factors as they can affect sales.
Also, people have become more health-conscious and are shifting towards healthier diets. Some businesses like fast food joints will need to change to the production of healthier foods like salads with time. Other people are on individual dietary restrictions, such as increased awareness of the adverse effects of gluten in people with Celiac disease. With such comprehension by the food industry, changes will have to be made to ensure customer satisfaction.
Political and Regulatory Forces
Political and regulatory forces can also have significant impacts on patterns of food consumption. The state, federal and local bodies are in charge of setting rules and restrictions of the conduction of businesses in a quest to protect the businesses and consumers. These include standards for storage and transportation of food products, temperatures that different foods can reach, cleanliness of commercial kitchens, and the laborer’s requirements in the food business. The food industry is, therefore, one of the most strictly regulated industries as compared to all other industries. On the bright side, consumers are not exposed to poor quality foods, but this greatly cuts the profit margins.
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Some rules, such as patent laws, are favored by businesses, while others like advertising restrictions are loathed. In the recent past, most firms within the food industry have demonstrated their dissatisfaction due to the regulations requiring trans-fat content labeling. Such regulations demand changes in the marketing strategies of the affected firms. For instance, the food firms mitigated the trans-fat levels and changed the target market to health-conscious consumers. It is the duty of the businesses in the food industry to adhere to these legal factors to avoid expensive lawsuits and to increase their sales and margins (Alava et al., 2018).
Conclusions
As per the above analysis, the has been a huge transition in the food industry marked by political, technological, societal, demographic and psychographic factors. The basis of enhancing the market is for businesses to be able to understand the tastes, needs, and preferences of their consumers in order to implement the most appropriate marketing strategies. Consumer behavior entails how consumers carry out their purchases and patterns displayed while searching for these foods and rating their level of satisfaction. It is more appropriate to combine demographics and psychographics in order to improve the market sales of a product. There are more women in the labor force and smaller households and there is an increase in incomes which has transformed the industry. The aging population has also risen which demands production of foods that cater for their health needs. There have also been advancements in technology such as nanotechnology and biotechnology all aimed to increase food quality and safety. The political and regulatory forces also lay the grounds to be followed in operations of businesses and hygiene in the food industry. These laws serve to protect the consumers from harm by any food product.
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References
Alava, R. P., Murillo, J. M., Zambrano, R. B., & Zambrano Vélez, M. I. (2018). PEST Analysis Based on Neutrosophic Cognitive Maps: A Case Study for Food Industry. Neutrosophic Sets and Systems, 21(1), 10.
Arroyo, P. E., Liñan, J., & Martínez, J. V. (2020). Who really values healthy food? British Food Journal.
Hamad, A. F., Han, J. H., Kim, B. C., & Rather, I. A. (2018). The intertwine of nanotechnology with the food industry. Saudi journal of biological sciences, 25(1), 27-30.
Jeffcoat, R. (2020). The impact of biotechnology on the food industry. In Biotechnology-The Science and the Business (pp. 515-532). CRC Press.
Santeramo, F. G., Carlucci, D., De Devitiis, B., Seccia, A., Stasi, A., Viscecchia, R., & Nardone, G. (2018). Emerging trends in European food, diets and food industry. Food Research International, 104, 39-47.