Food and Beverage Industry Facts and Trends - Case Study Example

?Running Head: TYRRELLS POTATO CHIPS Tyrrells Potato Chips of the of the Tyrrells Potato Chips Introduction of the Comapny For this paper, I have selected the company named as Tyrrells Potato Chips. The main purpose of this paper is to conduct an external analysis of the company and in this regard, we have focused on the market and general trends of the environment affecting company operations. Tyrrells Potato Chips is a manufacturing company that produces potato chips in UK. It is owned and initiated by Will Chase, who was a farmer and used to grow potato and started making potato chips as a business. It is considered as one of the biggest competitive advantage of the company. History of the Company Tyrrells Potato Chips Company is proudly and dedicatedly engaged in producing, farming, and processing of these potatoes into chips. This farm is located in Tyrrells Court, England. The company is progressing in this field of business for the last 20 years. The owner of the company had put extensive effort and dedication in converting his potato store into a small manufacturing factory after completing a detailed research in the field of processed foods and advanced machinery implementation and development. Tyrrells is famous for its flavors, which is the result of old grown potatoes (www.chelseamarketbasket.com, 2012). Manufacturing Process The process of Tyrrells Potato chips operations include production and harvesting of potato crop in small batches, prepared and cut into fine slices, and fried in high quality sunflower cooking oil. Lastly, these fries are packed in highly satisfactory packages sealed by using latest technology to ensure the freshness of the potato chips. The packaging of the chips forms an additional lively image to the potato chips (www.chelseamarketbasket.com, 2012). Key Products of the Company The main products of Tyrrells Potato chips is English chips of various flavors such as lightly sea salted, vinegar, cheddar and chives, sweet chilli and red pepper, black pepper, roast chicken, mustard, tomato, cranberry, paprika, roasted garlic, and Barbeque. Other complimentary products include popcorns of various flavors like toffee pudding, cheddar cheese, sour cream and Jalapeno, sweet and salty. Nibbles of Fritas, spicy, and Thai Chilli flavors. Tortyrrells of hot chillies, sour cream, cheddar and onion flavors (www.tyrrellscrisps.co.uk, 2012). The Business Progress The Tyrrells have made the highest volume of sales in 2008 i.e. 13 million pounds. It is reported that the owner of the company Will Chase have sold out major portion of stock of the company to the firm named as Langholm Capital for about 30 million pounds In addition, the company has originated a new subsidiary by name of Chase Distilleries, which is engaged in the production of a new kind of chips named as Vodka potato (PotatoPro, 2012). External Analysis Industry Analysis As per latest reports, the savory snack industry in UK is growing even during the times of decreased economic growth. According to the latest statistics, the savory snack market grew by 7.1% during 2011and earned a total of ?2.71 billion profit out of retail selling prices. The primary factors contributing to the success of savory snack industry are growing fame and popularity of these snacks in the UK market, increasing number of adult lunch boxes, increasing in the trends of bag sharing adapted by manufacturers and increasing responses to the customer demand with regard to health safety and more innovative flavors (Keynote, 2011). Manufacture of potatoes has heavily dominated the snack industry as compare to simple crisps. The primary reasons behind it are growing responses of manufacturers towards customers with respect to issues pertaining to health, fats free food and lighter snack, therefore manufacturers have shifted their style of production and processing. In addition, there are higher demands of customers to introduce innovative flavors both British and exotic origins. The demand for nuts and pop corns has also been increasing due to health factors and resulted in 7.8% growth in 2012. Though, the prices of these snacks are relatively higher than other crisps, therefore, there are chances that sales volume of these items may get affected unless manufacturers lower the prices. It is also noticeable that economic crises has also caused an increase in the sales volume of the snack industry as people are less likely to afford meals at all times therefore they tend to save money by buying snacks only (Keynote, 2011). Political Factors The main dynamics of politics is in the hands of World Trade Organization, United Nations, and European Commission with respect to amendments and implementations of any new or existing laws or policies that may affect the company’s operations and other procedures. The government is held responsible for ensuring the health and safety of food or snacks being delivered to public. Therefore, Government inclusive of department of health is carrying out a movement or policy called the responsibility deal, which looks after the processes involved in production of food and drinks items. This department is liable for ensuring the receipt of approvals from all companies operating in the food industry to ensure the safety of public health while producing food items. Food and snack products in UK are heavily regulated by the government with regards to labeling and packaging aspects. The law is strictly in favor of exposing and displaying all the necessary and vital information pertaining to the particular food item to be printed on the package for the information of consumers, so that consumer make a well informed buying decision as health is an integral issue to anyone. In addition, Tyrrells Potato chips company has the great opportunity by operating in snack industry as demand for snacks and other food items has been increasing day by day and in addition, snacks are replacing food items as a substitute due to higher inflation. Therefore, company can make the most of this advantage and develop and introduce vast variety and range of new products that meat the nutrition and safe health requirements as imposed by law. Economic Factors Every business operating in UK is highly exposed to risks produced by economic factors. The biggest threat caused by macro economic factor is recession, which has affected the purchasing power of buyer and supplier as well. The consistent increase in prices has made it difficult for consumers to spend on products, which do not lie under list of basic necessities. Therefore, it is highly predictable that sales volume of snack food industry may get affected badly due to this fact. The increasing prices of raw materials, and other services has also created a constant problem for suppliers to provide the same quality and quantity of goods within the same budget. The adverse effect of recession and higher inflation rates can also be observed in increasing expenditures on packaging and labeling processes. Therefore, companies may have to revise their planed finances. Though, snack market witnessed a growth in sales due to consumers’ preferences of snacks over food items because of higher prices. In addition, fuel prices have been touching the sky for quite some time due to which operations like distribution procedures and daily routine tasks at firm level have become very expensive. Increasing cost to the company may result into forceful increase in the price of the whole product. That would further affect the probability of good being sold out in times of recession and increases the overall operating cost of the company (Food And Beverage Industry Facts and Trends, 2011). Social Factors Social, cultural and traditional factors may have a significant effect on the operations of a business. Therefore, it becomes extremely important for Tyrrells Potato Chips to determine the factors affecting consumers’ preferences, tastes, choices, and strategies in order to design a adequate marketing and production plan. One point is in favor of the company that eatables can never go out fashion therefore company may not have to worry about going out of business in any way as people will never stop eating (Rodriguez, J. C., n.d.) The main target audience of the company are children, adults and even elders as snack is something that one can’t resist and there is higher probability of having snacks in between meals, while watching TV or movie, and sometimes before going to sleep a mid nights. These are the well studies patterns of eating found in UK target audience largely. The young generation is tend to enjoy and more likely to accept innovative and creative tastes as compare to elders. Therefore, companies operating in this industry may have a strong potential to develop new tastes to capture maximum market share. Technological Factors It is a bare fact that technological innovation does warders and adds to the value of the company. It helps company in reducing cost of production, gaining competitive advantage, increasing research and development activity, and cause increase in outsourcing due to nature of expertise and experience. The basic objective of every food and snack producing organization should be to achieve the optimum innovation in technology to enhance the tastes and quality, and increase the life of preserving factors, which protects the food and increases its shelf time as well. Since, being a snack producing company, Tyrrells Potato chips must work on improvising technology to avail the possible benefits from its implementation and gain the competitive advantage over competitors in highly sensitive and competitive market. The company can effectively utilize the technical influences to control and resolve the issues of consumers like calorie control, high sugar, or several other allergies to certain ingredients. Therefore, Tyrrells must plan regarding making further investments in technology and actively participate in latest developments in the field of technology and improvise and update its research and development department. Environmental Factors As per law forces, moral and ethical conducts; every company is liable to operate in a manner that does not damage any aspect of the environment. Therefore, all companies operating in every sector are alert and focusing on improvising its production, manufacturing and processing methodology to ensure safety of operating environment. These concerns are not only embodied by the law bodies but it also effects consumers preferences regarding products as well. The healthy and safe environment is highly important for a food or snack business as almost all ingredients required in the production process are grown on lands or are result of healthy environment. Therefore, snack and food companies should be very much concerned about this issue and always utilize those products that are easily discovered and grown on lands. But for that purpose, they must work together to ensure the fertility and greenery of lands as well and try not to affect it by producing hazardous gases and dumping waste in these regions. Conclusion Tyrrells Potato chips is a small manufacturing company that operates in snacks industry of UK. Its main products include potato chips, popcorns, nuts and nibbles of various flavors. It is well know for its innovative and delicious flavors. Tyrrells operations are largely affected by external environment in which it operates. Political factors play a vital role in this regard as these factors determine various rules, legislations and policies that may hinder company’s operations. Economic factors have also adversely affected the cost and selling prices of company’s products due to inflation and higher fuel prices. Tyrells Potato chips is actively working to improve its technological capabilities to gain competitive advantage in market and reduce its cost. The company is responsible for maintaining and ensuring the safety of environment for its own good. Lastly, the company must study demographic and social factors while targeting audience and research their eating patterns to capture maximum target market. Overall, the company is performing well even during economic down turns due to higher demand of its products. References Food And Beverage Industry Facts and Trends, (2011). Agri-Food Trade Service: The United Kingdom Food and Beverage Industry Facts and Trends, [Online], Available at: http://www.ats-sea.agr.gc.ca/eur/5730-eng.htm [Accessed 30 November 2012]. Keynote, (2011). Savoury Snack Market Up While the Economy is Down, Key Note Media Centre Press Releases, [Online], Available at: http://www.keynote.co.uk/media-centre/in-the-news/display/savoury-snack-market-up-while-the-economy-is-down/?articleId=754 [Accessed 30 November 2012]. PotatoPro. (2012). Tyrrells Potato Chips. potatopro.com, [Online], Available at: http://www.potatopro.com/Lists/Companies/DispForm.aspx?ID=57 [Accessed 30 November 2012]. Rodriguez, J. C., (n.d.). Eating Habits, diet,com, [Online], Available at: http://www.diet.com/g/eating-habits [Accessed 30 November 2012]. www.chelseamarketbasket.com, (2012). Tyrrells Potato Chips, Check Market Baskets, [Online], Available at: http://www.chelseamarketbasket.com/tyrrells-potato-chips.html [Accessed 30 November 2012]. www.tyrrellscrisps.co.uk, (2012). Browse: Have a Little, Tyrrells: Hand Cooked English Crisps, [Online], Available at: https://www.tyrrellscrisps.co.uk/ [Accessed 30 November 2012]. Read More