Food and Beverage
Food and Beverage
Food and Beverage
7 Workshop/ Seminar/ Conference 1: International Conference on Food Science and Technology, 2017.
.................................................................................................................................................................... 15
8 Workshop/ Seminar/ Conference 2: The Sustainable Food and Beverage Conference and Exhibition,
2014. ........................................................................................................................................................... 16
9 Workshop/ Seminar/ Conference 3: 8th International Conference on Food Safety, Quality and Policy.17
10 Workshop/ Seminar/ Conference 4: ABB Food & Beverage Day, 2016. ................................................ 18
11 Workshop/ Seminar/ Conference 5: Bangladesh Food Security Investment Forum, 2010. .................. 19
12 Workshop/ Seminar/ Conference 6: Food Pro & Agro Bangladesh International Expo March, 2018. .. 21
13 Recommendations: ................................................................................................................................ 22
14 Conclusion .............................................................................................................................................. 23
15 References ............................................................................................................................................. 23
Executive summary
Food and beverage industry is one of the fastest growing industries around the world as food is
humans’ most basic necessity. The large companies in this sector are- Nestlé, Kraft Foods,
Unilever and Cargill. Alongside US and EU, emerging economy for food and beverage industry
is China and India. They mainly provide the raw materials for this industry. Any Economic
downfall may highly affect all other industry but food and beverage as it provides necessity
product which people need to use even in heavy economic downfall. Being one of the fastest
growing industries, this sector faces some issues such as technological development. Due to
increasing completion the R&D of this industry should be well maintained which can be
challenging to bring out new technologies to make the products sustainable and efficient.
Manufacturers are expending their market to developing countries such as China and Indian
because of relaxed rules, large population, higher living standard and higher growth potentials.
Food and beverage industry in Bangladesh is a potential sector and growing rapidly since 2000.
This industry alone makes up 22% of the total manufacturing production in the country and
around 2.45% of the country’s total labor force. Bangladesh being an agricultural country with
large population can contribute largely in the food and beverage industry. Bangladesh is also
impacting global market by exporting food and beverage to 90 different countries in the world.
But many issues in Bangladesh are holding back this industry, such as unstable political
situation, high barrier to entry, corruption in the controlling quality and lack of technological
development. In the context of Bangladesh, food and beverage industry is one booming industry
to invest in. With the emergence of super shops concept and new technologies now many large
companies are investing in this sector and exploring its potential. Thus this economic crisis
immune industry has become one of the stable and sustainable industries in Bangladesh.
1.1 Background of the Study
Food can fulfill one of the most important physiological needs of human being. Human beings
cannot live without air for a single minute. They also cannot survive without food. Food provides
us with the necessary nutrition for our body. Its importance is indispensable. Due to the
differences in human cultures, geographic locations, environment, climate etc. food items tend to
change. Some might change in terms of ingredients (soybean oil in Asia/Palm oil in other
continents), some might change in terms of presentation (food spread over banana leaves in
India/on ceramic plates in other places), whereas some food items may change in terms of
cooking (ovens in the west, gas/wood stove in the east) and eating methods (using spoons &
forks in the west as opposed to using chopsticks or hand in the east).
Bangladesh Food and Snacks has now 370 members who are engaged in manufacturing,
processing and exporting the products of this emerging sector. The export trend is shown in
Table 01 of attached documents. Now about 90 items of agro‐processed products are being
exported to 70 countries throughout the world. Major export markets of agro‐processed products
are Asia, Middle East and Africa. Major exported items are pickle, drinks, juice, spices, rice, tea,
party snacks (chanachur), nuts, mustard oil, chips, biscuits, rose water, candy, puffed rice, potato
flakes etc.
In this report we try to identify recent scenario of food and beverage industry and how can this
industry can strength its power.
3.1 Political
Political unrest hampers transporting goods, raise price of raw materials and overall production.
Due to the scarce transportation availability, firms can neither collect required raw material to
produce the foods nor can distribute the produced goods. Bangladesh can hardly export any
commodities because of political unrest. Negative political environment hampers day to day
business operations at almost every aspect. Strikes hamper cross border trade between
Bangladesh and India, and other nations (Www1.wider.unu.edu, 2017).
Political unrest is almost a daily occurrence in Bangladesh which hinders the daily national and
international trading system of the country. Foreign firms are feared to come in Bangladesh with
FDI. Bangladesh is a democratic country in name but not in action. Political unrest hampers
transporting goods, raise price of raw materials and overall production. Due to the scarce
transportation availability, firms can neither collect required raw material to produce the
Beverage nor can distribute the produced goods (Bashaqr, 2017).
3.2 Economic
The recession influenced the fast food industry to some extent. Most of the restaurants have
included cheaper options in their menus and improved customer service. Customer service is an
important area as brands struggled during the recession to retain customers. A number of
changes including increased health consciousness affected fast food sales (Hossain, 2012).
Economic factors are a very important influence on the fast food industry. The industry has
showed excellent ability to adapt in the face of the changing trends. To better adjust to recession
and low economic activity, brands included low priced items. They added to the variety of
products on the menu (Pratap, 2017).
3.3 Social
Food developers need to be aware of these changes to make foods that meet the needs of
consumers. Food habits have changed drastically for the last decade in Bangladesh, and people
nowadays are having varieties, which makes it tough for marketers to satisfy. Normally, for
breakfast, people of Bangladesh used to eat ruti and parathas, but nowadays it has changed into
cereals and loafs and breads of several kinds along with milk. For lunch and dinner, we eat
traditional dishes, mostly, agro-based food items. But due to having lots and lots of restaurants
and dine-outs, this trend has also changed. Nowadays, we tend to eat out and order foods from
food-delivery companies, like food panda, Hungrynaki,com, etc. (Mohajan, 2013).
3.4 Technology
Technology has never been more intuitive than it is today, and it‘s only getting better. It allows
restaurant patrons to find restaurants, rate them, and decide where they want to spend their hard
earned money when they go out to eat and deliver the online food. It allows restaurant owners to
be more efficient and effective in the areas they feel can be streamlined by hardware and
software. But if used in the wrong place and at the wrong time, it can do a restaurant great harm.
As it can with any industry (Hosain, 2016).
High costs for new technology can be an entry barrier to new competitors. Technological
advancement helps create new brands and product lines to meet consumer preference. New tech
advancement in manufacturing and quality improvement concepts are improving bottling
operations efficiency. High product volume requires high levels of automation in manufacturing.
Technological advances increase the utility of employees and capital, which increases
productivity (Omicsonline.org, 2017).
3.5 Environmental
Industrial processes emit several thousands of inorganic and organic chemicals. Due to their
emission, agricultural commodities and thus also our food may become contaminated with these
compounds. It would not be feasible to monitor all the possible environmental contaminants in
our food. Therefore a simple and pragmatic scheme was developed, in order to select these
chemicals that are considered to be of prime importance (Ali, 2013).
Fast moving consumer goods (FMCG) are experiencing a successive growth in our country and
goods like beverages are in a flourishing state. Everyday thousands and thousands pieces of
beverage products are being consumed. And to meet the demand and diversified taste, local as
well as foreign companies are immerging and investing in this venture. Many local companies
and foreign franchises have developed an extreme competitive environment in the beverage
market (Krechowicz, 2009).
3.6 Legal
FOOD safety has become an important topic in Bangladesh as consumers of the country have
become victim due to serious adulteration in food. This element focus on the problems arises in
public health due to the presence of chemical hazard in food supply chain and supports require
for food industry of Bangladesh in order to supply safe food to the end consumer (Rahman,
2017).
Now, the country is in difficult situation with chemical hazard in food stuff. Bangladesh
authorities should develop: (a) adequate infrastructures including laboratory services for
inspector; (b) as well as public awareness in order to manage the situation (Rahman, 2017).
Some law are the Nutrition Labeling and Education Act of 1990 (NLEA) and the Food Safety
Modernization Act of 2010 (FSMA). A wide array of regulatory agencies monitors the
compliance of businesses in the food and beverage industry. These include the Food and Drug
Administration (FDA) Federal Trade Commission (FTC), the United States Department of
Agriculture (USDA), and a myriad of state agencies. (User, 2017).
5 Building blocks
6 Industry Analysis
6.1 BATNA
Food and beverage export must diversify maximum number of country.
Food and beverage industry must need to go for innovation, because these type of
product are updated day be day
Deliver products with more nutritional value and fewer allergens: Since more consumers
are being interested in eating healthy the added factor will help bring competitive
advantage. Many companies have already started acting on this by producing whole grain
products to attract the consumers (Infor, 2012).
Continually drive down costs: As discussed before the only way food and beverage
companies can survive properly is through cost cutting and increasing efficiency. This
can be done by utilizing various technologies that are currently available. Many
companies utilize these technologies and make the production system completely
automated to help reduce labor costs greatly thus gain competitive advantage against the
competitors (Infor, 2012).
Minimize environmental impact: large companies are currently focusing on this because
they have figured that by reducing the impact on the environment not only do they gain
competitive advantage in the eyes of the consumers they can also reduce costs by
reducing the waste. (Infor, 2012)
6.2 WATNA
The main WATNA decision not to go for international company. There are many huge
iconic and unique Bangladeshi foods.
Another is not to go for innovation. Innovation is essential for every type of company.
Making the price higher in any situation is another WATNA situation. Because most of
the consumer of this industry are middle income people.
13 Recommendations:
Technological obsolescence and marketing shortfalls can be removed to this sector.
Quality of the finished product can be improved by removing fluctuations in the raw
material quality and using efficient technology and manpower.
The capacity can be fully utilized.
This sector can focus more on its BATNA in the negotiation table with domestic as well
as foreign partners.
An adequate and inexpensive cold chain facilities and varying requirements for
processing conditions from one raw material to another can be established.
The effort from the industry itself, or from government regulatory bodies, can be
organized way to maintain food safety standards and hygiene throughout the entire
process, from bringing the raw commodity to the facility to marketing the finished
product.
The industry is also seriously deprived of research and development (R&D) supports to
overcome technical difficulties and develop more efficient processes and new
products. Increased R&D could help the industry become more economically sustainable
in the domestic market and more competitive in the international market.
An effective quality control system for ensuring the food safety of final products is an
absolute necessity in this sector in Bangladesh.
The local market can be developed through improving access to local foodstuffs,
improving distribution channels, building a culture of social innovation.
This sector should focus on product variation and customize its market segment to
address large customer basis.
It may give more emphasis on product innovation by adequately investing in research &
development. As research and development are perquisite of product innovation and it
facilitates to get competitive advantages over its peer company.
It should fix competitive pricing of its products so that it can compete with major
competitors.
This sector focus on distribution channel as it is the way to reach customers. Though it is
expensive to establish a strong distribution channel, in this regards it may negotiate with
3rd parties for the distribution of its products.
Promotion activities are the way to spread the word about a product or service to
customers, stakeholders and the broader public. So this sector should strongly focus on
proper promotional activities.
The environmental, health and safety issues should be considered while producing,
packaging and distribution.
A PESTLE and 4 pillars can be an ideal base for improving the condition.
Finally, this sector may follow the ideal sector from all over the world to improve the
scenario a mass planning and coordinated execution.
14 Conclusion
The food processing industry in Bangladesh represents one of the major potential sectors within
the industrial segments in terms of contribution to value addition and employment. The sector
accounts for over 22% of all manufacturing production and employs about 20% of labor forces.
All food processing enterprises account for 2% of the national GDP. The food processing sector
includes processing of cereals, pulses & oilseeds, bakery and confectionary, fruits and
vegetables, dairy, carbonated beverages and non‐carbonated fruit juices, drinks, other beverage
and various other food items. In this competitive world, it is necessary to stay ahead of the
competition and for this awareness of the industry is mandatory.
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