PESTLE Analysis of RAW Pressery

Political
These factors include issues such as the rulings and guidelines from government bodies
on nutritional information on food and drink (Food and Drink Innovation Network 2016).
These regulations require food and drink manufacturers to meet the standards provided
by the EU for food safety and labelling. Other political factors in the UK include Brexit,
which may have both direct and indirect impacts on Innocent in areas such as trade
agreements and the potential opportunities, such as access to new markets, and threats,
such as trade tariffs, which may arise from these. This may include the increased cost of
ingredients which may occur if UK fruit farmers are unable to access the cheaper EU
labour for fruit picking (O'Carroll 2016).

Economic
Economic factors which impact on Innocent drinks include the level of taxation which
may impact, either positively or negatively, on the level of its profits. The economic
situation in the UK can impact on the sales of Innocent smoothies and juices due to
their premium price and the availability of cheaper substitutes. The uncertainty around
Brexit has led to a weakening of the pound making raw ingredients more expensive to
import and this may also impact on the cost of sales, if food prices increase. Europe is an
important market for Innocent and it will be important that Innocent can continue to
access this market (Burn-Callander 2015)

Socio-Cultural
Socio-cultural factors which impact on Innocent includes changing consumer tastes,
which helped Innocent become successful due to its ethos of natural ingredients and
premium price (Britvic 2016). Innocent was also able to address a growing interest
amongst consumers regarding health concerns and the willingness of consumers to pay
a premium price for this (Britvic 2016). Consumers associate positively with Innocent's
brand and reputation due to the donation of 10% of its profits to charity and the knit a
hat campaign which raises money for Age UK (Withers 2017).

Technological
Technological factors include new methods of production to include issues such as
recycling. Innocent currently uses 100% recycled plastic in its bottles and is also further
seeking to find new ways to reduce any negative impacts on the environment (Innocent
2017). This is particularly relevant with the current interest in the recycling of drinks
bottles and the call for a deposit scheme to reduce the amount of plastic waste. Other
technological factors include social media which links Innocent to its customers
(Innocent 2017). Innocent has also helped develop an app to reduce the amount of
water used by strawberry farmers in Spain (Leahy 2016).

Environmental
Environmental factors are important due to the reliance of Innocent on natural
ingredients and their commitment to sustainability. By reducing its carbon footprint,
Innocent may assist in addressing the issue of climate change which may create adverse
weather conditions and impact on harvests of fruit and vegetables. The UK has signed
up to the Paris Agreement and this will impact on Innocent's organisation in terms of
how they address their impact on climate change in areas such as production. However,
by continuing to improve its manufacturing processes and use of resources, Innocent
can offset any potential costs by reducing areas such as wastage and water use. This can
include research, collaboration and education along its supply chain (Leahy 2016).

Legal
Innocent must comply with the legal framework of the UK including taxation, health and
safety and food manufacture laws (Food and Drink Innovation Network 2016). The
partnership with Coca Cola in 2009 was subject to UK competition laws. The UK legal
context may face substantial changes due to Brexit and this may include the
amendment, abolition or retention of EU legislation relating to employment rights and
health and safety. Further uncertainty has been created by the proposed soft drinks levy
which may impact more on Coca Cola than Innocent, due to their use of sugar in their
products (Britvic 2016). Further legal issues include areas such as financial reporting and
corporate governance.

Political Factors :- Various Political factor offal the fruit industry e.g. Taxation. Because
the taxation policy keeps changing. The government plans to encourage foreign direct
investments would our Industry highly as organized fruit juice industry has only 3%
share as of now in the market but with FDI’s it could increase significant by coming of
bigger players.

Economic Factors:- The company is using truck to more raw material to the processing
plant and finishing goods, so fuel is very important high risk due to crop facture, non
availability of raw material because of pest attack ect.
Other Factors affecting the fruit juice industry are real growth, inflation, interests rates,
government action and other factors.

Factors Like Money Supply, energy availability and cost, business cycle etc would also
effect the Industry.

Technological Factors:- Technology plays very important role in maintaining the quality
and cost efficiency to generate higher profit. Better Technology increases the life of the
product.

Social Culture Factors: – As the income of middle class increases, new consumers are
more conscious about health. The life is becoming more hectic and tiring, consumer’s
preferences are shifting to healthy drinks. The young generation is also shifted from
coke to fresh and healthy drinks. As the people become more educated, they are taking
the healthy router.

Legal Factors :- processes fruit juice are regulated inde the food and drugs and
regulations as a food product and the consumer safety requirements become more
advanced across the beverage industry, tracking and traceability are a prerequisite.

Porter’s Five Forces of Raw Pressery

l, channel, product and other areas subject to significant competitive pressure, coupled
with the impact of a price war.

THE THREAT OF NEW ENTRANTS :- I believe that fruit juice industry, the threat of new
entrants in the following areas :-

Economics of Scale :- In general the economics of scale barriers the entry form or new
entrants brined the risk of existing enterprises a strong counter-attack in order to enter
the large scale of production. Fruit Juice industry, production lines, excellent processing
technology which higher productivity, lower production costs.

Industry Counter-Existing Enterprises :- Juice huge market potential, attracting an

increasing number of new entrants the market leader in the use of existing resources to
counter the strengths, such as control of raw material, increasing the cost of new
entrants control terminal sales of the competitors blockade, increasing the cost of sales
and other rivals to form barriers to entry.
3. The Threat of Substitutes:- Fruit Juice industry is not a substitute for other types of
beverages, drinks, face an auditioned nine categories of impact. It the lower prices of
substitutes it will make the price of fruit juice drinks only at the lower hand, which limits
the juice benefits. Prices of alternative products are more attractive, limiting the role of
the greater of the composition of fruit juice drinks market, the more pressure there. This
will increase the competition in the industry.

4. The bargaining Power of Buyers:-

(a) Sales: – In the first line cities, dealers are make access to information and product
differentiation is small. Therefore the bargaining power of distributors is relatively large.
In second tier cities, companies mainly rely on distributors to get the market, the dealers
profit and less active, resulting in their bargaining ability.

(b) Retail Terminal :- For example Wal- Mart, Hyper Markets, it paying costs, slotting
allowance and so high, PET bottles for fruit juice drinks on the shelf very strict selection,
mostly of choice is a considerable brand of fruit juice drinks, such stores but also
according to their own interests to participate in the development of the retail price of
the product. As for the medium and small stores, small shops and so on, is very sensitive
to price, substitute products and more bargaining power is also strong. 

5. Suppliers bargaining power. Threats to the major suppliers to increase supply prices
or reduce the supply of products and services quality. From the raw material supply
point of view, China’s fruit is rich in resources, and many juice drinks companies has its
own production base, suppliers, bargaining power is not strong. However, as China’s
low-cost, high-quality, highly competitive juices to enter the international market,
attracting a large number of domestic and foreign funds to the industry aggregate. On
the one hand, over the years a lot of capital investment, so that our fruit juice
concentrate excess capacity, inadequate supply of raw materials led to price rise in
production costs. On the other hand, the profit reduction also requested enterprises to
reduce production costs, while cost reduction is the most effective way to reduce the
price of raw materials, drive down the purchase price will lead to the interests of farmers
has been damaged severely damaged fruit juice production factors of production
enterprises, leading to competition in the industry gradual loss of benefits. In addition,
the PET bottles used for packaging with a unit value of small, light weight, bulky,
manufacturers focused on the use of features, making their transport costs are higher,
once led to PET suppliers bargaining ability. In response, many companies adopt
measures such as PP bottles, aseptic cold filling and other alternatives to reduce
packaging costs. Juice beverage packaging business to strictly control the cost of
making beverage packaging by the upstream industry (raw material), with competition
in the industry as well as downstream enterprises (customers), three levels of the profit
squeeze, beverage packaging industry profit margins are low. Of their weaker
bargaining power.