When we talk about globalization and politics we often think of the impacts they have on our direct lives, concerning our jobs, education and direct future. But we often forget to think about some other impacts they have such as on our energy consumption, the news we hear and on industries, that are chosen to be highlighted over others such as choosing solar over coal. But today we are going to talk about an industry that impacts our everyday lives typically three times a day, the food industry.
The food industry is directly impacted by global trends and politics due to the regulations that govern it.
Here are 10 trends impacting the Food Industry:
- Global Political Instability – Political hotspots- such as the Russia/ Ukraine situation- have an impact on the food service industry as chains contract their expansion plans as they wait for the outcome of these situations. The industry waits for opportunities to make new deals as politics unfold as much as countries or weapon industries do.
- Non-Fossil Fuels for Energy – As solar, the wind and hydraulic energy sources become cheaper and more efficient, an increasing amount of food service operators are considering becoming users of non-carbon-based forms of energy. Aware that the health of the environment is necessary for the quality of their products, the food industry wants the use of renewable energy to increase to continue being able to sell products that their consumers enjoy.
- Rising Costs of Food – As prices continue to increase of raw materials it impacts the entire food supply chain which then causes operators to raise menu or product prices. Another impact of this is that they end up trying to get as much out of the food as possible. Moreover, the rise in prices increases the advancement of new and different alternatives to replace those foods that become too expensive.
- Import Tariffs – Most countries seem to gravitate towards more and more free trade blocks, however, there are still many such as Brazil, that cannot let go of high import tariffs that they have in place. These high tariffs obviously impact the ability for producers outside of the country to sell their products. That said, of course, this does not impact only the food industry but the cosmetics industry as well as many others.
- Increased competition – New products enter the market every day, we all know that. But new manufacturers of all product categories of food service enter the market every day as well. Originating from India, Thailand, Brazil and increasingly Africa as well.
- Growing Middle Class – The rise of the Middle class around the world is also causing an increase in middle-class accessible food service commerce. A market that cannot be ignored.
- Rising Labor Costs – Globally, labor costs are rising and importing “cheap” labor is becoming less and less attractive as government restriction are put into place to encourage the industry to “hire at home”.
- Food Safety Issues – The health of consumers is important. Governments on a global basis are putting an increasing number of rules and regulations on food to help control any health and safety issues which also restricts the food industry.
- International Chains – The major markets of the world that compromise of 50% of the world’s population is India, China, South America, Indonesia, and Russia. They are developing new chains and concepts that in several ways are growing faster than “traditional” chains. An opportunity that can’t be missed for the industry.
- Changing distribution Strategies – The Internet has forever changed the way the food industry distributes its products. From the way, they are sold to how they are received. The growing amount of people shopping online for products but also for food continues to increase as convenience becomes more and more important.
These impacts and changes to the food industry and manufacturers must be managed accordingly. Lascom CPG offers their PLM solution for the Food service and manufacturing industry. Offering organization and transparency for products, better management of regulations and changes for a simpler way to innovate and advance into the future.
Click here for more information on the Lascom CPG solution for the Food industry.