Industry Overview
The US food industry has developed significantly in the recent years. American food products become more and more popular as across the Americas as the international consumers. It is now an extremely complex industry consisting of multitier supply chains. By the end of 2014, the total sale of food industry within all possible channels (supermarkets, grocery stores, restaurant and drinking places etc.) came closer to $2 trillion per year and this amount keeps increasing (Warar, 2013, p.16). Indeed, several discounter giants such as Wal-Mart, Target and Costco mostly hold this industry. According to the estimates, only Wal-Mart gets over a half of its US revenues through the supermarkets and grocery stores (Warar, Anderson & Wuersch, 2013, p. 13). Such an oligopoly makes smaller market players decrease the prices for groceries in their stores as well as dramatically cut the operational costs.
Regarding the food production segment, the situation here appears to be very similar to the segment described above. A few huge corporations hold the most of Americans’ consumer basket products by different brands. However, these organizations are very concerned about the customers’ satisfaction and they have already started to alter their strategies in the way all types of consumer can benefit of the companies’ goods (Warar, Anderson & Wuersch, 2013, p.14). Yet, more goods with fewer sugar and fats appeared on the supermarkets shelves. According to Compound Annual Growth Rate (CAGR), the food processing industry growth will remain at the level of: 9.7% for organic foods, 3.6% for dairy and canned foods and 1.7% for frozen goods per year (Warar, 2013, p. 12).
One of the most seen food processors is the H. J. Heinz Company. In 2011 this company received an honorary award “Processor of the Year” for being “the most global food company” (Higgins & Fusaro, 2014, p. 1). The Heinz held a significant part of the US food industry and was one of the most seen international market player in the segment of food processing. Indeed, after the merge with Kraft Foods in 2015, the new corporation of Kraft Heinz became 5th largest food processing company in the world after PepsiCo, Tyson Foods, Nestle, and JBS USA with the total revenue of approximately $15 billion (Feeney, 2015, p.1).
Macro-environmental analysis
Five major macro-environmental factors influence any industry and food one in particular: demographic, economic, natural, technological, and political (legal). Three of them, political, demographic and natural are outside forces that influence the food industry. The demographic force is mostly connected with the scope of consumers within the particular territory. These people actually creates the demand for specific brands and different kind of migration sure thing influences the demand in this or that way. Also, the demand depends on the structure of the population, its size, location, race, age, density and so on (Samnani, 2014, p.38). The natural factor is also considered as an unpredictable one. From year to year, the planet resources exhaust and people are now very concerned about this issue. Non-environment friendly organization could simply loose its customer even through the food ware this company produces might be at the highest quality. At last, but not the least, the pollution has a very significant impact on the food industry. The customers are more likely to choose the brand of the company that exhaust less polluted wastes into the atmosphere and this is the issue to consider (Samnani, 2014, p.39).
The legal, or political, force is the one that the industry cannot control at all. Indeed, the Food & Drug Administration (FDA) along with the United States Department of Agriculture (USDA) control the market of food ware in terms of safety and quality. These organizations provided a lot of policies and legal agreements to secure the customer from non-healthy food. Labeling, certifications, facility and bar code registrations, nutritional analysis, and other regulation for the quality of goods are the ones that make the processors provide the customers with fresh and high quality products (Warar, Anderson & Wuersch, 2013, p. 18). According to the USDA statistics, the US nutrition programs to insure the quality made up the largest share by 2014. This is clearly depicted in the diagram below (Figure 1).
Customer segmentation
In the recent days, consumers’ preferences in regards to the offered goods and services change rapidly from day to day, month to month and year to year. There are numerous of factors that influence these changes such as work relations, family enhancement, holidays, weekend activities, children and so on. Hence, it is quite difficult or even almost impossible to define a specific customer segmentation in the food industry. However, according to Warar, Anderson & Wuersch (2013, p.113) there are several modern trends the society:
Meal fragmentation. It is mostly connected with households where parents never force their kids to eat whatever they do not want to eat;
The snack culture is familiar to almost a half of adults (48%) of the United States and it is combined with “Eating Alone” trend;
The trend of immediate consumption inherent to approximately 11% of adults, as theses people consume the goods they buy within the next hour.
Bibliography
Higgins, K. and Fusaro, D. (2014). Food and Beverage Industry Outlook. Food Processing. [online] Available at: http://www.foodprocessing.com/articles/2014/2014-food-and-beverage-industry-outlook/?show=all [Accessed 4 Mar. 2016].
Feeney, N. (2015). Kraft and Heinz Merge to Become World’s 5th Largest Food Company. TIME. [online] Available at: http://time.com/3757678/kraft-heinz-merger/ [Accessed 4 Mar. 2016].
Samnani, A. (2014). Macro-Environmental Factors Effecting Fast Food Industry. Food Science and Quality Management, 31.
USDA, (2014). Chart: Nutrition assistance programs make up the largest share of USDA outlays. [online] ers.usda.gov. Available at: http://www.ers.usda.gov/data-products/chart-gallery/detail.aspx?chartId=40049&ref=collection&embed=True&widgetId=39734 [Accessed 4 Mar. 2016].
Warar, D. (2013). United States of America Food & Beverage Market Study. Oviedo, FL: Global Strategy Inc.
Warar, D., Anderson, P. and Wuersch, D. (2013). USA Food & Beverage Market Study. Zürich: Switzerland Global Enterprise.
