Political factors
Negative factors: consumers protection
The
National Program Nutrition Health (PNNS) fights against junk food and promote
health ways of consumption. Moreover, the new sugar tax was applied in
January 2012. Both lead to rising cost in the market in order to fight against the consumption of sugary drinks.
The French
National Assembly has voted a new law in March 2013 that is currently applied in
French FOT FOD, about an alignment with the metropolitan on overseas sugar product
content and on their expiry dates. Local industrials have now less flexibility in
the production process in accordance with the NPNH program and the SRSA requirements (explained below). This
may link to rising costs in the production process of local industrials.
Positive factors: protection of industrials
The soft drink market in France is under the control of the SRSA- Syndicat National des Boissons Rafraîchissantes. Its goal is to promote the variety of BRSA – Boissons Rafraîchissantes Sans Alchool, highlighting the image and the quality of the products in the market. Not only the SNBR puts in place initiatives related to public health stakes but also defend the general, economical and social interest of industrials towards the State and its institutions. The production process in under control and have to meet the law requirements. It ensures the best production process to guarantee the best quality of the products.
Economic Factors
Negative factors: the economical growth
The Great
Recession of 2008-2010 is the consequence of a slowdown in the overall
consumption. The French soft drink
market is affected by the crisis. The rise in prices of raw material leads
brands to increase the price of its products. The soft drink market sales in volume
have cut down by 2.4% between January and May 2013. Those economical factors
affect brands differently and cause market shares losses for some brands and
increases for other. The competition is growing.
Societal Factors
Negative
factors: healthier trends of consumption
French
people are small consumers of sodas and tend to develop healthier lifestyles. People
from 21 years start paying more attention to their nutrition. This is why
industrials develop their product ranges and put the exergue on diet products
to face the increasing interest in developing healthier lifestyles from this
age. Thus, adults aged between 21 to 34 years old drink around 145.6g of sodas
per day compared to adults from 35 years old and more who drink only 29.8g of
sodas per day (Cf. Appendix 3). They
tend to drink Coca-Cola Light or Zero instead of drinking beers or other
beverages.
Positive
factors: adaptation to healthier trends in consumption
In order to
adapt their products to healthier way of consumption, companies have to use natural
products and limit chemic ingredients in their production process. A new
product appeared on the market: Stevia, a sweetener and sugar substitute that
can also reduce people health risks due to high sugar content and
fat ingredients in the food and beverage markets. This natural product is
becoming increasingly used in those markets and will have an increasing
importance in the creation of eatable and drinkable products. It will lead to
changes in the production process of those markets.
Appendix 1 – French drinks consumption in g/day
Technological Factors
Negative factors: Sodastream machines
Sodastream machines are about to revolutionize the beverage market and create a new trend in consumer’s beverages habits of consumption. Indeed, this new water tap allows mixing different kind of flavors both for alcoholic and non-alcoholic beverages. This machine will have such an impact in the beverage market that all players will have to review their overall strategies: not only about the marketing and distribution strategies but also about the production process. Every players of this market will have to adapt their product to the do-it-yourself trend.
Positive factors: The NTICs
The
development of the NTICs has an impact in advertisement on TV, Internet and via
the use of Medias. Brands put the premium on marketing in order to make their
product more attractive, funnier and healthier, depending on the marketing
strategy of the brand. This is the case of Fanta and Orangina that used to
define a specific budget for inbound and outbound marketing to attract their
targets. The use of neuromarketing is
also a new way to adapt their marketing strategies at the most to the
consumer’s needs.
Legislation Factors
Negative factors: The sugar tax
The
implementation of a new tax, the sugar tax
aims to increase the fight against sugary drinks consumption. It incites French
consumers to drink cheaper drinks and healthier products without sugar. Industrials are facing an
increasing competition in the soft drink market due to rising costs to face this new law which incite them to develop healthier products.
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