Environmental Factors Affecting Food Industry

The operations of the food and beverage industry are largely governed by the internal and external environment like any other industry which comprises many factors.

The Environmental Factors Affecting Food Industry

These are two major factors affecting the food and beverage industry:

1. External Factors

These are factors originating outside the organization over which the management has no control, which determines F&B operations.

a) Political: Government policies and regulations on food packaging, processing, food safety, disposable system, pollution control, labor laws, and so on. And always the tax laws are included.

For Example- VAT, Service Tax, Luxury tax, and so on.

b) Economical: The increasing cost of raw materials, labor, water, and energy. Changes in the disposable income of society. Credit policies of the suppliers and the loan policies for starting the venture.

c) Social: Changes in the eating habit of people. Growth of ethnic minorities that demand particular cuisine or preparations. Changes in population distribution. Changes in the socio-economic grouping of the area.

d) Technical: Advancement in food processing technology. High-tech food production and service equipment and information technology.

2. Internal Factors

These are the factors originating within the organization over which the management has control. Some of the major internal influences that govern the operations are these.

a) Food and Beverage: Highly perishable nature of food commodities. Wastage, pilferage, and poor portion control of food and beverages.

b) Staff: High level of staff turnover. Like,

  1. Absenteeism
  2. Poor supervision
  3. Shortage of staff
  4. Unskilled staff

c) Control: Stores control procedures.

  1. Purchase procedures
  2. Proper cash control to avoid theft
  3. Correct pricing of dishes
  4. Issue procedures
Dipayan Mondal
Dipayan Mondal

Dipayan is the author of this blog. He completed his hotel management degree from GNIHM, Kolkata. And he is very passionate about the hospitality industry. And right now, he is working as a successful hotelier in a 5-star hotel.