Impact of Global Growth on Food, Beverage, and Consumers - Research Paper Example

Global Growth and the impact of food, beverage and consumers Food and beverage industries have become one of the most important parts of theworld due to tremendous potential to regulate economy. The food and beverage sector has become leading producers in many countries including Europe. Economic growth of destabilized countries has great impact on the development of food and beverage industries. In order to develop a research paper successfully, the nature of the economic growth and food and beverage sector has been introduced thoroughly. A research background has been described in order to state the importance of the issues and the positive impacts. Following the research background, a thorough analysis has been done on the topic and the issues have been discussed in the findings section. Finally the paper is concluded along with some recommendations that can help to overcome the challenges that have risen from rapid economic growth of destabilized countries. The entire paper is beneficial for understand the implications of economic growth in countries like China, Brazil, India and Vietnam. Since these countries have huge population and are economically destabilized therefore, the global consumers and the food and beverage industries are greatly impacted from rapid economic growth. Introduction Food and beverage industry has flourished from a collection of limited operations to a trillion-dollar powerhouse in the world under the influence of major international organizations. Companies like McDonald’s, Starbucks and Coca-Cola are visible in every part of the world. Rapid economic growth of countries such as India, Brazil, China and Vietnam has provided billions of people the ability to purchase products that were previously enjoyed only by the people of the developed countries. Huge participation of consumers onto the global food market has resulted in the increase of the price of food products and beverages. Economic growth in the developing countries has increased the buying power of consumers in the past few decades. According to Engel’s law, the increase of income results in the increase of expenditure. It has been observed that there has been a gradual shift of people to consume expensive fast-foods rather than consuming cheap and health food. According to a recent study, it has been observed that the daily caloric consumption of the people of India has increased from 2318 to 2773 from 1990 to 2003. Similarly, there has been a gradual increase in the consumption of Calories among the Chinese population. The increase in the demand of food and beverages has resulted in the increase of the price of products because people are ready to pay more for the products. This research paper explains the impact of economic growth of countries such as China, India, Vietnam and Brazil on global food and beverage industry and consumers. Research Background This research paper deals with the important factors that impact food and beverage sector along with global consumers due to rapid economic growth in destabilized countries. It is significant that economic growth has many advantages for food and beverage sectors because it helps in generation of employment and quality of production. However, there are several issues that must be taken care of, in order to sustain the economic condition of countries such as India, China, Brazil and Vietnam and prevent inflation situations. The research objective is to highlight the issues that occur due to rapid economic growth with respect to food and beverage sector. In order to analyze the positive and the negative impacts a thorough literature review has been implemented in the paper. The findings are generated based on the positive and the negative impacts that influence food and beverage sector and global consumers. Since consumers are the major focus of food and beverage industry owners therefore, they have a very important role to play with respect to economy generation. The economic growth of the countries depends greatly on the income and expenditure capacity of the consumers. The following literature review illustrates the impacts of economic growth in developing countries. Literature Review Most of the people believe that technology plays an important role in order to drive growth and enhance customer engagement towards companies. A gradual increase of customer attraction towards expensive food and beverages have been observed in the past few years in countries such as China, India, Vietnam and Brazil. Products of McDonalds and Coca-Cola have also reached the market of several other countries and most of the people have showed positive responses towards the products. The food and beverages industry is one of the largest manufacturing sectors in the world. The contribution of the food and beverage industry in the world is very high. Most of the products that are available in the market are consumed rapidly by people belonging from different culture. It has been observed that the Chinese food products are rapidly sold in the American market and the American food products are rapidly consumed by the people of India (Visser, 2010). There are several other countries that experience huge imports and export of food products. Economic growth of the developing countries has great impact on the food and beverage industries along with the consumers. Rapid economic growth has resulted in uneven distribution of capital in countries like India and it has increased the sale of the food and beverage products available in the market. There has been a gradual shift in the trend of the people residing in the Asian countries. The people of the Asian countries rely greatly on the western culture, appearance and western food products. There are several reasons due to which the people of China, India and Brazil have valued the food products of the Western civilization. First of all people get the opportunity to change their usual taste and the western style food products are mostly packaged, which can be consumed while working or walking. Therefore, there are several time-saving features that are available in the Western packaged food items. Several factors have been impacted as a result of economic growth in countries such as China, India, Vietnam and Brazil. First of all, agriculture has been strongly influenced due to economic growth in the countries. The quality of agricultural products has been enhanced due to active participation of food and beverage industries in the developing countries. The quantity of production has also increased sustainably due to high demand of food products in the market. The farmers have been benefited greatly because they have got the opportunity to sell their products directly to some of the companies. Companies like Coca-Cola and Wal-Mart prefer educate the farmers regarding raw materials and they purchase the crops without interference of any middle-man, which has helped the farmers to gain profit (Padoan, 2001). The quality of production has also been enhanced with active participation of the companies in several countries. Secondly, employment in the food and beverage sector has increased, which has created job opportunities for people globally. Rapid economic growth in developing countries like India, China and Brazil has enabled the people to purchase food and beverage products at higher prices. This factor has resulted in the establishment of many food and beverage industries in these countries. The Chinese and Indian markets are majorly targeted by companies because the populations of the countries are very high. Marketing of products in such an emerging society can definitely have a positive impact on the company’s profit. . Marketing of food and beverage products of various companies require large number of employees (Landes, 2010). This factor has proved to be beneficial for the people of the developing countries because job opportunities have enhanced in the countries. Economic growth, population growth, globalization, consumer demands and trends are some important factors that drive developments in the food and beverage sectors. Consumers are an essential part for the development of food and beverage industries because they are the target of different companies. It is significant that the Asian and the Latin American countries are likely to experience strong economic growth in the near future due to high investments of multinational companies in these countries. The Chinese and the Indian markets are mainly aimed by the food and beverage industries because the people of these countries can be influenced easily to purchase products. The Chinese, Indian and the Brazilians have huge demand of products that are exported from different countries because of the difference (Lang, 2010). The marketing and the advertisements motivate the people of these countries easily and make them believe that the products are better. Since there is a growing trend of economy in these countries therefore, the demand of food and beverage products is at optimum level. KFC, McDonalds, Burger King, Coca-Cola, PepsiCo etc. prefer to invest in the developing countries because of two reasons the population and the economic growth that drives people (Martin, 2009). Even a slight change in the trend can benefit the industries greatly along with the people working for those industries. There are some negative impacts of food and beverage industries in the life of people. First of all, the huge competitive market in the developing countries has resulted in low amount of investment in Research and Developments of products compared to the products available in developed countries. The quality of beverages available in India and China has been observed to be unfit for drinking. The employee retention policies of most of the food and beverage companies in the developing countries are not strong. The companies hire employees randomly during high requirement and they sack the same employees when their purpose is solved (Farmer, 2013). There is also low investment made by most of the companies towards strategic development because the governments of the developing countries do-not have strict regulations for the companies. It is significant that the economic growth of some countries has resulted in the migration of several companies to those countries and invests their capitals for obtaining profit however there are some negative impacts that cannot be ignored (Gulay, 2014). The food and beverage industry aims at providing consumers canned food in order to save their time. This factor can be very dangerous because the canned food are not fresh and has greater tendency to raise obesity among people. Thus it poses threat to the health of people. Findings Based on the literature review it is clear that economic growth in countries like China, India, Brazil and Vietnam has great impact over the food and beverage industry and the consumers. With the economic growth the buying power of consumers increases and they try to engage themselves in making purchase of expensive food and beverages. It has been observed that the people of the developing countries develop the tendency to spend more capital after they experience more earnings. Thus the markets of the developing countries are always filled with new and innovative products of various organizations. The advertisements broadcasted in the developing regarding a particular product also motivates the people to purchase them because they can be made to believe easily by companies. It has been clear that economic growth has many positive features as it enhances the lifestyle of people and the standard of living also gets high. Economic growth in the developing countries like China and India has increased the demand for better food and beverage products in cheaper prices. In order to meet the market demand most of the companies have installed their industries in the respective countries and trained the farmers to obtain their desired quality of products. This kind of implementations have generated more productions and also helped the farmers economically. Economic growth has also proved to be beneficial for employment in different food and beverage companies. Most of the companies aim at hiring local employees because it would be less expensive and consumers would appreciate staffs helping them in their own language. This factor has resulted in optimization of job and employment in the developing countries. It is one of the most important impacts that economic growth has with respect to food and beverage industries. The global consumers are also benefited with the marketing and availability of products in different countries. Most of the fast food centers such as McDonalds are American based organizations. The Americans residing in China, Brazil or India have the opportunity to enjoy their preferred food items. Economic growth is also beneficial because it helps the government of a country to earn more tax revenues. Tax revenues are not only paid by the consumers but also by the organizations involved in the production and supply of food and beverage items in different countries. Thus, the government gets the ability to earn more revenue and invest the capital for the welfare of the people. Foreign revenues are always beneficial for development because of the difference between the values of currency. There are some negative impacts of economic growth on food and beverage industry and consumers. Rapid growth of economy would increase the purchase power of consumers, which would impact the buying behavior of people entirely. A complete shift from fresh and health food to canned products and aerated drinks can lead to serious health issues and government must take some actions to set a benchmark for the quality of products available for people. Conclusion Based on the above analysis and findings, it is possible to state that economic growth impacts food and beverage industries and global consumers in numerous ways. There are several positive significances of economic growth on food and beverage industries as it helps in maintaining and enhancing the flow of money in the developing countries. Most of the companies participate in some CSR activities in order to share some amount of their profit with the society. Furthermore, the investments made by the food and beverage industries in the developing countries help people to get employment and growth opportunities. Economic growth and development of food and beverage industry is directly proportional to each other. Consumers are the major role players for the development of food and beverage industries. Consumers also give thrust to economic growth because there is a rapid transfer of money from one sector to other. Despite the positive impacts there are some negative factors of economic growth on food and beverage sector and global consumers. Rapid economic growth can lead to inflation and the consumers would have to suffer greatly. The food and beverage industries should also focus on the quality of production in order to reduce the chances of health disasters. Countries like India, China and Brazil have huge population due to which a small change of the economy or consumer habit can have great effect in the society. Therefore, it can be stated that economic growth of count6ries such as India, China, Brazil and Vietnam play very important role with respect to food and beverage sector and global consumers. Summary and Research Recommendation Rapid economic growth of developing countries such as China India, Brazil and Vietnam has enhanced the food and beverage sectors. High demand of consumers regarding food and beverages has enabled several companies to initiate diversified projects on food materials. There are several positive impacts of economic growth including employment generation and high agricultural productivity. The influx of food and beverage industries has regulated the economy of many countries leading to swift transfer of money within the organizations and the society. Governments of the countries have also been able to stabilize the issues of the societies and have initiated major development projects. There are some negative impact of economic growth in the world with respect to global consumers and food and beverage sectors. Rapid growth of economy has resulted in high income of people in developing countries and it has increased the buying power of consumers. Due to this factor the people of developing countries have to pay more money for fast foods and beverages that are produced by multinational companies. In order to overcome the issues some recommendations have been provided below. First of all, the government should have strict policies to set a benchmark for the quality of products. Secondly, the companies should emphasize on their research and development programs and try to produce quality food products and beverages in order to build a healthy society. Thirdly, the price of products must be checked by the government organizations in order to save people from paying more for cheaper products. Fourthly, inflation and rise in price of products must be controlled by satisfying the existing market demand. The energy resources should also be used wisely and economically. These factors can definitely help to reduce the chances of price-rise and maintain the economic condition of the countries that are majorly suffering from poverty. References Farmer, N. (2013). Trends in Food and Beverage Industry. New York: Springer. Gulay, O. (2014). Impact of Food and Beverage industry. London: Sage. Landes, M. (2010). Growth and Equity Effects of Agricultural Marketing. Stamford: Cengage Learning. Lang, T. (2004). Food wars. New Jersey: Pearson. Martin, C. (2009). Vietnam Food and Beverage Industry. Stamford: Cengage Learning. Padoan, P. (2001). Food and Beverage industry, employment and Growth. New Jersey: Pearson. Visser, W. (2010). The corporate level and business level strategies. New Jersey: John Wiley & Sons. Read More