Packaged Food Industry Analysis

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ID Number: 3765990
MGTS 4481: Section 002
Industry Analysis
Introduction
According to Market Research, the packaged food industry “consists of all types of foods and/or beverages found in mass, gourmet, and specialty markets internationally. These products range from raw ingredients like spices, to convenience products like ready-made meals. Packaged foods can be shelf-stable, refrigerated/frozen, and can be packaged in bags, bowls, bottles, boxes, brick packs, cans, cartons, crates, jugs, packets, pouches, spray or pump dispensers, tins, tubes, and tubs, among other packaging formats” (Packaged Foods Market Research Reports, 2012). Products that are not included in the packaged food industry would be products that do not go through the packaging process; meals served at restaurants, drive-thru fast food, and relevant services. The value chain for the packaged foods industry would start with raw materials which are generated and converted, which then move to production and distribution to retailers and consumers which are then used and disposed of (Innovative Food Packaging Solution, 2008). The inputs for the industry would be the raw materials and production and distribution labor that goes into producing the products, while the companies in the industry are selling to wholesalers and consumers. In 2010 the global packaged food retail value was approximated at $1.95 trillion, with a projected forecast in 2015 of $2.14 trillion ("Packaged Food 2010 - Part 1: Global Market Performance”). This forecast is showing the growth of the packaged food market is expected to be increasing substantially over the next few years. While the market often changes due to behavior shifts and social/cultural trends, new technological developments must be made to meet these changing needs. An example of the technology changes that are currently occurring would be the trend towards sustainability; companies are going to need new technology in order to make their packaging more sustainable. Analysis

A. The most influential trends found in the packaged food industry that have a positive impact are the technological, environmental and sustainable, and social/cultural trends. By introducing and implementing new technological processes applied to the packaging and production of packaged foods, companies are able to reduce their fixed, variable, and input costs and in turn make a higher profit. With the current push towards going green and becoming sustainable, implementing plans that support bio-diversity and the reduction of harmful chemicals and pollution are beneficial as companies are seen as conscious to the environment and have a better image publically due to this. The social and cultural trends of consumers are also highly influential on an industry because these trends will influence the purchasing habits of consumers dependent on what they buy, when they buy, and how often they buy. The trends that are seem as having a negative impact on the industry would be an increase in obesity rates in the United States; consumers are starting to focus around healthier eating options and might leave processed packaged foods out of their diet ("Global Food Markets: International Consumer and Retail Trends”, 2011). Another negative trend would be the demographic trend of 23.5 million Americans live in locations with absence to traditional supermarkets ("Global Food Markets: International Consumer and Retail Trends”, 2011). This is seen as a negative trend because consumers are not always able to have the convenience of visiting a local supermarket to purchase packaged foods and substitutes such as fast food and dine-in restaurants are a more convenient option. A third negative impact trend would be the rising oil and raw materials prices; these factors cause an increase in the production and distribution of products, overall reducing net profit for a company ("Global Food Markets: International Consumer and Retail Trends”, 2011). B. In relation...
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