Physical, Natural Environmental Issues Affecting the Food Industries

There is no doubt that the food industry is one of the world’s biggest industries. There are some interesting factors at play in this space, such as rising labour costs, which make it uncertain how profitable food companies will continue to be. This report will go into further analysis on PESTEL, specifically the elements such as environmental, political and sociological. (Refer to Appendix one as an example of a PESTEL framework of all elements). It will also provide key findings on how food distributors might be affected by current trends as this is an arising issue linked with the sociocultural element, and the changing of people’s ethical values.

The food industry plays a big part in contributing to environmental issues such as ocean plastic, global warming and deforestation. ’Food systems contribute 21% to 37% of global greenhouse gases, and are significant contributors to deforestation, biodiversity loss and declining water tables.” (the guardian,2019). In response, the food industry has had to adapt to be more environmentally friendly but it still remains a major issue.

Although sustainability is not a new concept, global attention to this topic has soared, especially after the launch of the UN Sustainability Development Goals in 2015, a global framework to guide the transition towards a more sustainable future by 2030 (Passport Euromonitor,2019).

A new tax which has been created ‘applies to plastic packaging produced in or imported into the UK that does not contain at least 30% recycled plastic’ (gov.uk,2020). This is encouraging companies in the industry to use less plastic. ‘The tax will provide a clear economic incentive for businesses to use recycled material in the production of plastic packaging, which will create greater demand for this material and in turn stimulate increased levels of recycling and collection of plastic waste, diverting it away from landfill or incineration’ (Gov.uk,2020). This is a political element of PESTEL and a positive step lead by the government in order to reduce waste and build up and urging companies to become eco friendly in relation to their packaging of products. Plastic brands will have to change their packaging in order for it to be recyclable.

Consumers are becoming more knowledgeable about their individual dietary requirements and in addition are building a much clearer understanding of what kinds of foods are and are not safe. On behalf of those who work in the food industry, this has contributed to customers demanding greater transparency. This isn’t inherently a negative thing, but it means that to keep consumers happy, the food industry will have to make adjustments. The sociocultural behavior aspect of PESTEL is what triggers that behavior of how swiftly we are all moving as consumers to select brands, choose companies and choose to buy from companies which reflect our values and what we believe ethically is right for us. Social behaviour is changing with ethical and environmental conscious decisions being prioritised.Pollution has a major effect on how consumers view an organisation. These days an environmentally aware’ company is likely to be more popular than one that is not. ‘With concerns over pollution and waste rising globally, and threatening public health, there are opportunities for companies to reduce their air emissions beyond business as usual, and to move towards organic agriculture’ (Passport Euromonitor,2019).Therefore, there are ways in which the food industry can reduce their contribution to global warming by making alterations and create the threat of the environmental issues into an opportunity, making the industry strong instead of weak. Increased pollution has already had effects on the fast-food market. ‘McDonald’s in the UK, for example, substituted paper alternatives for plastic straws in May 2018 in a bid to reduce plastic waste pollution’ (Mintel,2019) and in response to consumer demands for a more ‘environmentally friendly’ packaging. This makes up an important part of the ‘service’ element of the fast-food market; consumers receive the peace of mind that the product they are eating has had minimal effect on the environment. There is a massive pressure on food companies to change packaging to be recyclable and eco-friendly with it becoming both a need and a want from many consumers.