The case study A can of bull? Do energy drinks provide a source of energy? discusses the impact of energy drinks on the human organism. Most people think about caffeine as energy when they feel about this product. This ingredient does not contain calories but leads to the feeling that there is more energy after consuming it. Therefore, caffeine, the essential component of energy drinks, activates the human organism and gives the illusion of temporary refreshment.
According to the description of energy drinks, they do not contain calories and stimulate metabolic processes using caffeine. The calories in these products are from protein that the brands use to substitute sugar. Acesulfame Potassium that energy drinks contain is similar to glucose in its components and effect. Aspartame is another sweetener that the brands use that substitutes sugar and has fewer calories (Heidemann & Urquhart, 2005). It is possible to state that energy drinks contain fruit syrup that contributes most to calories, and it is the pure glucose in energy drinks. In some cases, carbs are substituted by protein calories, but these energy drinks can officially write that they do not contain sugar (Heidemann & Urquhart, 2005). Therefore, these drinks contain calories that human bodies use as a source of energy.
Caffeine is the most critical component of energy drinks, and it does not contain calories. It has a stimulating effect on the human psyche and nervous system, which creates the feeling that the person has more energy. In other words, when the person drinks caffeine, their brain receives the stimulation and becomes more alert. The critical detail is that this effect of caffeine is biased because it is temporary, and the nervous system is exhausted after stimulation. It is impossible to substitute normal sleep and food with caffeine and energy drinks, and the adverse effects become evident. It is not helpful for health to drink many energy drinks and caffeine instead of allowing the organism to recover without stimulation.
References
Heidemann, M., & Urquhart, G. (2005). A can of bull? Do energy drinks provide a source of energy? The National Center for Case Study Teaching in Science.
The component that contributes to most calories in energy drinks is glucose. Once a person consumes an energy drink, it is absorbed into the cells. In the cells, glucose is burnt to generate energy in the form of heat and adenosine triphosphate, a molecule that stores and gives out energy as required by the cell. The ingestion of carbohydrates, made up of elements such as glucose and fructose, serves as an exogenous source of fuel. The conversion of glucose into energy also takes place in muscle. The muscle cells have mitochondria which aid in the conversion of glucose into energy in the presence of oxygen at a specific oxidation rate (depending on activity), generating energy (Kreider, 2018). Glucose is, therefore, the component that contributes to most calories in energy drinks.
Caffeine is a stimulant in energy drinks that is perceived to provide high amounts of energy after ingestion, making a person feel more alert and energetic. When most people consume energy drinks, they expect a boost provided by the high level of caffeine in the energy drinks. It boosts the impacts of neurotransmitters: dopamine, acetylcholine, and serotonin. Caffeine increases the release of catecholamine, including adrenaline, through the sympathetic nervous system. Adrenaline increases the rate of heartbeat, sending more blood to the bodys muscles (Heidemann & Urquhart, 2005). Nevertheless, caffeine stimulates the liver to release sugar into the bloodstream to provide more energy
Energy drinks contain various components that portray different physiological roles in the body of a person who consumes them. Citric acid is an organic acid, and it is an essential component that precedes the citric acid cycle. The citric acid pattern is an essential mechanism in generating chemical energy by the cell (Heidemann & Urquhart, 2005). Cyanocobalamin is a manufactured conformation of Vitamin B-12. It is essential for the formation of blood, synthesis of tissues and proteins, production of cells, and the general growth of the body. Folic acid is a vitamin vital for the metabolism of amino acids, carbon compounds, and nucleic acids.
1-Glutamine is an Amino acid that is essential in the development and nourishment of body muscles. Inositol is a sugar, and it is part of the Vitamin B complex; it regulates the quantities of cholesterol in the body and possesses potential antioxidant capabilities. Nicotinic acid is a vitamin that can be mixed with water, and it is essential for the manufacture of amino acids (Heidemann & Urquhart, 2005). Pantothenic acid is a manufactured conformation of Vitamin B-5, essential in the energy metabolism of carbohydrates, lipids, and proteins, manufacturing neurotransmitters, hemoglobin, lipids, porphyrins, and steroid hormones (Heidemann & Urquhart, 2005). Pyridoxine HCL is a manufactured conformation of Vitamin B-6, which is vital in effective metabolic functioning, energy generation, maintaining a healthy nervous system, and protein digestion. Water is a solvent for other ingredients, vital for physiological processes.
Energy drinks contain various nutrients which are meant to increase cognition, focus, and short bursts of energy. One of the most common ones is taurine, also known as amino sulfonic acid, which is critical to metabolic processes and is produced naturally by the body. However, there is evidence that when combined with stimulants, which are also present in energy drinks via caffeine, guarana, yerba mate, tyramine and others, taurine leads to increased mental performance. Energy drinks can contain various other ergogenic nutrients such as l-carnitine or ²-alanine that can speed up metabolic processes through various means such as transporting fatty acids to be oxidized for energy production (Kreider, 2018). However, other than glucose and caffeine, most other ingredients in energy drinks are present in small amounts far below recommended medical supplement doses, likely for marketing purposes rather than practical effects.
Despite the beneficial effects of energy drinks, they may affect the sleep/wake cycle of an individual. Caffeine blocks the adenosine receptors in the basal forebrain, which signal the brain when it is time to sleep. Therefore, when the receptors are obstructed, signals cannot be sent to the brain for sleep coordination; this affects the sleep cycle of an individual who consumes energy drinks (Patrick et al., 2016). Nevertheless, large amounts of glucuronolactone affect the sleep pattern of an individual, with quantity, quality, and tiredness increasing substantially, particularly with regular use.
My personal opinion is that energy drinks are meant to generate short bursts of energy, largely based off the glucose and caffeine interactions. Therefore, for an individual expending a lot of energy over a period of time, energy drinks are largely ineffective. While athletes may use energy drinks (or electrolyte solutions) for instant ingestion of glucose for performance upkeep, many prefer a blend of lower to moderate glycemic index of carbohydrates prior to training. The primary issues are that while a short-term energy boost is provided, once it falters, it creates a range of other issues such as rapid heartbeat, increased blood pressure, and what is known in popular terms as a sugar crash when insulin and stress hormones are overused. Furthermore, it is extremely unhealthy to consume more than 400mg of energy drinks per day, making it an unsustainable source of energy.
In conclusion, energy drinks are beverages which contain a range of ingredients which temporarily boost energy levels, primarily through high glucose levels and stimulants such as caffein combined with other additives. The simple carbohydrates from added sugar impact the human physiology on a very short-term basis by peaking glucose that can be burned into energy during physical activity but have long-term impacts such as high blood pressure and impairment of sleep, which in the long-term creates issues and diminished energy. It is recommended to not use energy drinks as a consistent means of boosting energy due extensive negative health problems accompanying it.
References
Heidemann, M., & Urquhart, G. R. (2005). A can of bull? Do energy drinks really provide a source of energy? Journal of College Science Teaching, 35(2), 40.
A recent debate concerning the proposal of Tax on Sugary Beverages has created a huge controversy and divided opinion. This division emanates from predictable sources. On the one hand, leading manufacturers and distributors of soft drinks have formed a vanguard of natural opposition to the proposed tax. On the other hand, a number of health lobbies and groups pledge their support for the proposed tax. Not least included among these is the broad support of the current United States administration of a measure which aims at tackling obesity amongst the general populace. Dr. David Ludwig, a director at the Boston Childrens Hospital optimal weight for life program opines that A tax on sugar-sweetened beverages is really a double-win 5
In between these two polarizing opinions are the skeptics who opine that the measure may not go beyond legislation and above all point to political obstacles and question how much of an impact it would really have on consumers.1
Not surprisingly, the chief executive of Coca-Cola, Muhtar Kent, calls the proposed tax outrageous as Coca-Cola reported total revenue of $31,944 million in 20082. If the government imposes tax on sugary beverage, it is more than likely that the quantity demanded would fall for these products resulting in a noticeable decrease in the revenues for companies like Coca-Cola. In April 2009, there was a tax increase on tobacco products in Indiana that saw an increase for each pack of cigarettes by $.62. As a result, it was reported that the sales of cigarettes decreased tremendously3.
Nonetheless, we must not only view the proposed tax from the perspective of manufacturers but we also need to consider the view of merchandising companies who sell these sugary beverages to customers. For example, there are takeout restaurants which provide customers with such great offers as a meal with a soda. With the proposed tax on sugary beverages, their marginal costs would increase, in effect causing a decrease in profit for sellers and ultimately, translate into a rise in the selling price of the beverages.
However, for those who do not accept this, the estimated economic advantages and benefits that even a proposed one penny per ounce tax on sugary beverages would generate, no doubt provides a lucrative and added incentive. Those in favor of this side of the argument include a sizeable political body made up of New York City health commissioner, Thomas Farley, and Joseph W. Thompson, Arkansas surgeon general. With a figure of $14.9 billion in its first year4, this understandably counts as a good cause for considering such a tax not merely viable but hugely desirable. Further to this, the additional revenue could be used to support more health care initiatives in the way of helping ensure greater efforts are made towards combating the growing problem of obesity.
In terms of popularity and speaking in terms of consumerism, this approach seems a far better bet for securing future funding for a much needed pro-health initiative that assuredly seems to be gaining the full support of the government. This will cause for-now the much-opposed soft drinks conglomerates to rethink their position. They might only need to look at how other companies such as McDonalds have in recent years successfully capitalized on the need to acknowledge and inform consumers of the high sugar contents found in their products. In this sense too, manufacturers of sugary beverages are already well-schooled in promoting non-sugary beverages. Often, these sugar-free saccharin alternatives, require simply adding of the word diet to what have for many consumers already become household beverage names.
As support in America grows for the healthier lifestyle and a healthier nation, surely this is to be preferred over the recently proposed tax-hike by Montana Senator Max Baucus, on what to many amounts to having no-choice in the matter an array of taxes and fees on high-end group insurance plans, drug and medical device makers. This type of increase imposes lesser choice on people making crucial decisions regarding which plan, medicine or medical device better suits their needs.
The consequences of the proposed tax on sugary beverages impact on a similar (and possibly life-threatening) way. It might have an influence on which of the two beverages (sugary or non-sugary) consumers choose to drink on a regular basis. The proposed tax would not appear (at least in the eyes of todays newly much-better informed consumers) to amount to a huge price-hike on the former, and just as importantly, it would not interfere with people making informed choices when deciding to drink one beverage or the other.
That soft drinks companies do not accept their products as bearing any responsibility for adding to the nations growing obesity, is a view that does not fit the spirit of the newly switched-on, health-conscious consumerist age we live in. This will eventually come to influence a majority of those opposed to this tax, Congress included. A little imagination from soft drink manufacturers should neither mean any overall loss in profits, nor should it consign them to occupying a place among the rapidly expanding list of foods and drinks companies that the American public today sees as responsible for their nation-wide expanding waistline.
Works cited
Brownstein, Joseph. Public Health Leaders Propose Soda Tax . ABC News. 2009. Web.
Coca-Cola Company Revenue & EPS. Nasdaq: 2009. Web.
Effect of Tobacco Tax Increase. WTHITV, Terrehaute IN. 2009. Web.
Neuman, William. Proposed Tax on Sugary Beverages Debated . The New York Times. 2009. Web.
Soda Linked to Adult Obesity, California Center for Public Health Advocacy. 2009.
Baruch College. 2009. Web.
Footnotes
Neuman, William, Proposed Tax on Sugary Beverages Debated, New York Times. 2009.
Coca-Cola Co. Revenue. Nasdaq. Web.
Effect of Tobacco Tax Increase. WTHITV, Terrehaute IN. 2009.
Neuman, William, Proposed Tax on Sugary Beverages Debated, New York Times. 2009.
Brownstein, Joseph. Public Health Leaders Propose Soda Tax . ABC News. 2009.
The objective of the article was to show that without the participation of small and medium enterprises in the International Food and Beverage Alliance (IFBA), the impact by major multinational companies, through their pledges, would remain insignificant. Their share of the global packaged food sales is only 3.3 percent. Therefore, they do not command the necessary threshold to enable them to have an impact on the industry (Alexander, Yach, & Mensah, 2011).
Limitations of the Article
The article leaves out non-taxed (informal) products from its data collection and analysis. Therefore, its validity will be affected by how significant the market share for informal packaged food and beverages is; a low percentage will have no impact on the validity of the research. The dependence of the retail value of products in the encased food segment of the research exposes its findings to errors. Companies might have intentionally lowered their retail selling prices to compete effectively. The research would be more credible if it incorporated additional factors to monitor. Furthermore, the paper could have a pretest and a posttest analysis to remove any validity issues that may have arisen during the survey period.
The researchers acknowledge the gap in describing nutrition intake because they did not collect the relevant data, in a particular area. The data used in the research comes from an independent-data institution. If there are any errors made in the data collection process by Euromonitor International, they extend to and affect the findings of the article. However, the standardization of the data reduces the margin of error during analysis. The results tabulated in the article show soft drinks companies commanding the highest sales percentage in the global market. They hold the greatest potential of reinforcing the IFBA pledges. The share commanded by soft drink companies is significant because the research left out off-trade data, which would have tremendously increased the figures reported (Alexander, Yach, & Mensah, 2011).
The usefulness of the Article
The reported data is used for the analysis of the industry dominance and structure of both the packaged foods and beverages. Currently, IFBA needs additional members to have a substantial influence on the global food industry. Member companies have less than 25 percent, for the packaged food industry, in their average strength of operations in the countries surveyed. The research findings offer a preliminary account of the composition of IFBA, and its total command in the countries surveyed. It does not provide additional information about the plans and strategies of IFBA, which would assist in reviewing the findings of the study. Additionally, the article does not indicate the criteria for joining IFBA. Moreover, it is not showing whether there are stringent rules that prevent small and medium enterprises from becoming part of the institution.
The lack of standardization for the informal food sector is responsible for their higher than normal levels of health risks. The IFBA is not as effective as it should be because it has no enforcement powers for its pledges. In reference to the UN meeting on non-communicable diseases, the paper suggests that the private sector has to reformulate foods and beverages. Therefore, emphasis on pledges should extend beyond IFBA to all firms in the food and beverage industry. The research has pointed out various limitations for future replications to fill to increase the literature available on the subject. It is important to have onboard, national health, and wellness pledges. An international body, which leaves out single nation companies, will not sustain the global movement towards the healthiest food system.
There would be contradiction to the statement that children are the future of our country. A healthy nation needs healthy citizens and the children of today are the citizens of tomorrow. As mentioned in our letter, there is growing concern as to the health of our children studying in schools in the country today. Easy availability of junk food and fizzy drinks in school premises are the primary reason for this state of affairs. The inherent nature of children and their propensity for tasty food without looking at health concerns makes this matter more serious. Junk food vendors have stalls and vending machines inside school premises, with a business arrangement with school authorities, to serve the children unhealthy food and drinks.
Manufacturers of such items also are responsible for creating such a situation. It might come as surprise that almost 480 million pounds are spent on television advertisements alone every year to promote such products. The advertisements are created in such a way as to affect their eating habits in favour of junk food and drinks. Parents and school authorities are now very concerned and would like the government to take steps to tackle the problem. A series of surveys have demonstrated that the majority of parents are in favour of a protecting their children from junk food advertising. A recent British Heart Foundation survey found that 68% of parents were in favour of pre-9pm junk food advertising restrictions, with only 7% against. (Junk Food Marketing: Junk Food Advertising and Marketing Works. 2008).
It is our proposal that schools in the country take up the matter themselves instead of waiting for legislations. As the first school to be approached, we sincerely hope that an arrangement can be worked out and ultimately set an example for other schools to follow.
Nat Fruits is a rapidly expanding business engaged in selling fresh fruit and vegetable juice and healthy snacks through stalls and vending machines. One can find us in many street corners and shopping malls in the city. We have more than ten years of experience in this line of business and have a turnover of more than 100,000,000 pounds. We use only organic foods grown in our modest farm and through purchase from local farmers.
With proper education and guidance children can be persuaded to change to healthier food habits. If this happens, there is tremendous scope in setting up fresh fruit and healthy snack stalls in schools that will be mutually beneficial to both of us. All relevant details are given in detail below.
Extent of the problem
A recent National Diet and Nutrition survey ahs discovered that 92% of children consume unhealthy saturated fat in excess of RDA, 86% have excess RDA intake of sugar, 72% have excess salt intake and a whopping 96% do not get enough nutrients by not consuming adequate fruits and vegetables. Childrens dietary health, in particular childhood obesity, is widely recognized as one of our most pressing public health problems. (Childrens Diet Crisis. 2008). These figures are self-explanatory and need no further elaboration.
Study
A detailed study was made by the company to substantiate our initial findings. Officials from our company visited 20 schools inside the city of London. The following findings were made. Methodology used to collect data was mainly through informal interviews with existing staff of vendors of junk food inside school premises. Interviews with school authorities, parents and students were also conducted. Questionnaires were used to interview students. Copy of the questionnaire is included in the appendix
Students spend on an average £1 per day on junk food and fizzy drinks.
Only one third that amount was spent on healthier items like fruit juice and salads
Main reasons cited by students for the above was non availability of alternatives 57%, taste 36% and cost 3%.
44% of students were willing to try healthier alternatives if they found it to their liking.
An awareness session on health was given at each school lasting one hour, after which 75% of students were ready to try healthier alternatives for reasons of better health. This figure can be achieved only if junk food vendors are not present in school premises
Proposal
Our proposal is to set up stalls in the school premises once occupied by fast food vendors if possible or alongside their stalls. Only fruit juices, milk (hot, cold, flavored) and salads (including fruit salads) will be made available.
We are willing to offer up to 30 of our profits going to the school. Independent audit of our accounts may be conducted by the school authorities for verification of figures.
A pilot study period of six months can be agreed to for the schools to see whether the proposal works out. If found satisfactory a contract for a period of five years can be signed.
The school authorities will provide an area of 100 sq. ft. to set up our stalls. Power to run mixers, blenders and ovens will have to be provided. Burners will be using gas and the same will be taken care of by our company.
A running water facility with a sink and drainage facility for water from the sink has to be added. In addition to the above, a small room with a deep freeze (provided by company) adjacent to or near the stall may be used as a store to keep fruits, vegetables and other materials be made available.
A student strength of 500 is estimated to bring in about £3000 of profit per month. In such a case the school will get £1000 as per agreement. The school can estimate profits as per the number of students in their schools.
All efforts will be made to keep the prices of our products steady. Due to seasonal nature of some fruits, small variations in prices may be unavoidable.
Nutrition Advisory Board
A board that will advice and educate students, parents and teacher will be formed with our initiative. The board will include representatives of parents, teachers, students and a part time qualified nutritionist, salary to be paid for be the company. A working group could be assembled to oversee the policy writing and consultation. School Nutrition Action Groups (SNAGs) or a food forum (like a school council) are successful models that many schools use throughout the country . (Establishing a Whole School Food Policy: Bringing Together Messages about Food Throughout the Whole School Day: How to Develop and Implement a Whole School Food Policy. P. 4).
Products
Our products initially will be limited to fresh juice, salads (vegetables and fruits) and milk (hot, cold, flavoured). The nutrition content of the main items is given below.
Juices
Fruits
Amount
Minerals Contained
Vitamins Contained
Apple
One medium apple with skin contains almost 4 grams of dietary fiber.
Potassium 158 mg Calcium 9.5 mg Phosphorus 9.5 mg Magnesium 7 mg Selenium -.4 mg Also contains small amounts of iron, manganese, copper and zinc.
Vitamin A 73 IU Vitamin C 9 mg Folate (important during pregnancy) 4 mcg Vitamin E -.66 IU
Grapes
One cup of grapes contains one gram of protein and 1.6 grams of dietary fiber.
Potassium 176 mg Calcium 13 mg Phosphorus 9 mg Magnesium 4.6 mg Iron -.4 mg Selenium -.3 mg Also contains trace amounts of zinc, manganese and copper.
Vitamin A 92 IU Vitamin C 3.7 mg Folate (important during pregnancy) 3.6 mcg Vitamin B6 -.1 mg
Orange
one medium orange contains 1 gram of protein and 3 grams of dietary fiber.
Potassium 237 mg Calcium 52 mg Phosphorus 18 mg Magnesium 13 mg Selenium -.65 mg Also contains trace amounts of iron, zinc, manganese and copper.
Vitamin A 269 IU Vitamin C 70 mg Folate (important during pregnancy) 40 mcg Vitamin B1 (thiamine) -.1 mg Pantothenic Acid -.33
(Dr. Decuyperes Nutrient Charts: Fruit Chart. 2002).
Fruit Salad containing apple, grapes, banana and mango in a single serving of 200 gms
No
Quantity
Pottassium
165 mg
Calcium
5 mg
Phosphorus
6 mg
Magnesium
1.25 mg
Selemium
1.0 mg
Iron
4 mg
Copper
0.5 mg
Zinc
1.2 mg
Vitamin A
2000 IU
Vitamin C
12 mg
Vitamin B6
0.8 mcg
Selenium
0.2 mg
Vitamin E
1.2 IU
Note: Other vitamins and minerals available in trace amounts.
Guarantee
Natfruits hereby guarantee that all agricultural produce used by us has been grown organically in our own farms or in farms that have organic certification. In our case our products are certified by the Organic Farmers and Growers Association. Talk to us about the inspection and licensing of organic food processing, farming, body care products and other organic enterprises, as well as composting certification to PAS 100 and the Compost Quality Protocol. (Organic Farmers and Growers (OF&G) is a Leading UK Certification Body with a Reputation for Practical, Efficient and Friendly Service. 2008).
Helping the farming community
A switch to healthy alternatives in schools will be a big boon for the farming community in the region. The need for organically grown produce will increase substantially. It is our endeavour to buy locally as much produce as possible. Organic farming may offer UK farmers an opportunity to improve business profitability, biodiversity and sustainability both within agriculture and rural communities. (Converting to Organic Farming. 2006).
Conclusion
The survey conducted by us has convinced us that this is a viable opportunity as a business and a necessity as far as health is concerned. The many news items regarding this issue only fortify our stand. A conservative estimate is that 60% of students will try our products. With the cooperation from your side we can strive to create better health in our children. We will be following up with other schools in the city immediately. If implemented here, a model can be set for other schools to follow.
Please feel free to contact us for any clarifications.
Questionnaire to students:
Q.1. In which school are you studying?
Q.2. In which class are you studying?
Q.3. How old are you now?
Q.4. Does your school have facility for buying eatables?
Q.5. What are the main items available?
Pizza
Rolls
Cakes and pastries
fizzy drinks
Others (Specify)
Q.6. Which item do you buy most often?
Q.7. For what amount do you buy items every day?
Q.8. Do you know that these products are not very good for you? (a) Yes (b) No
Q.9. Do you get to buy products like fruit juices, salads etc?
Q.10 If yes, do you buy them?
Q.11. Will you buy such products if no other products were available?
Note: Question to be asked again after health education class.
Dear Sir,
Please find enclosed a report and proposal for starting a fresh fruit and vegetable juice stall in your prestigious institution.
As you are well aware, junk foods available in schools in the country have had a negative influence on the health of students.. Obesity levels among school students are rising at an alarming rate. Parents and school authorities have expressed concern many times in the past over this issue. As the head of your institution you too must have felt concern for this trend.
Natfruit Drinks is a well established company that sells fresh fruit and vegetable juices and healthy snacks in many parts of the city of London. We have over ten years of experience in this field and you may find us in street corners and many of the malls here.
Please go through the report and proposal and allow us to have a personal meeting with you at a later date that is convenient for you.
Converting to Organic Farming. (2006). [online]. defra Department for Environment Foods and Rural Affairs. Web.
Dr. Decuyperes Nutrient Charts: Fruit Chart. (2002). [online]. Health alternatives 2000.com. Web.
Establishing a Whole School Food Policy: Bringing Together Messages about Food Throughout the Whole School Day: How to Develop and Implement a Whole School Food Policy. [online]. DATA, British Nutrition Foundation. P. 4. Web.
Organic Farmers and Growers (OF&G) is a Leading UK Certification Body with a Reputation for Practical, Efficient and Friendly Service. (2008). [online]. Organic Farmers and Growers, Organic Certification UK2. Web.
A provisional title for the major project research: eco-friendly packaging and its issues.
Sustainability has recently become a new trend in doing business. As the overall green consciousness grows and consumers worldwide prefer buying eco-friendly products, companies tend to become more environmentally friendly reducing their impact on the environment. In most cases, the areas for influence reductions are minimizing the level of greenhouse gas emission during the process of manufacturing and transportation of the finished goods and using renewable resources in the production stage. However, eco-friendly packaging is still a matter of concern for most manufacturers because their major objective is to decrease expenditures and maximize profits, which is not always possible when it comes to upgrading packaging design and switching to eco-friendliness.
This paper will focus on the issues of eco-friendly packaging. The topic will be narrowed to the food industry, i.e. food and beverage production. The motivation for choosing the food and beverage industry is its indissolubility from direct connection with the everyday life of the consumers without regard to the region or culture. The rationale for choosing this topic for future research is the fact that the transition towards environmentally friendly packaging has both economic and environmental aspects.
Economically, it might help reduce costs in the long run because traditional packaging technologies are characterized by the excess use of materials and resources and high waste rates. Initially, such transition would require investments in designing new packages and upgrading the process of manufacturing and packaging, but once this step is taken and all necessary changes are implemented, a company will obtain an opportunity to reduce expenditures and win new customers, who choose to buy green products and those packed in recyclable materials.
The environmental aspect of the topic under investigation is simple and comes down to reducing the negative impact on the natural environment and contributing to solving the climate change problem because of using recyclable packaging or making it from post-consumer waste or already recycled materials.
This research will focus on investigating the trends in changing the face of packaging and shifting to eco-friendly technologies and answer the following research questions:
What are the possible strategies for changing packaging and making it more environmentally friendly?
What are the ways for developing the packaging design to hint the consumers that the package is environmentally friendly?
What are the necessary steps for the transition towards eco-friendly packaging?
How to persuade companies that the shift towards environmentally friendly packaging is economically, socially, and environmentally profitable in light of conducting cost and benefit analysis?
What is the management process for promoting and selling eco-friendly packaging design?
The proposed research design includes several steps. First of all, it is vital to determine what is eco-friendly packaging and what requirements should be met to call a package environmentally friendly. Second, it is significant to estimate the current trends in packaging food and beverages, i.e. identify what are the primary materials and resources used for producing it and how recyclable they are. Third, it is paramount to analyze the current trend in eco-friendly packaging to propose a new design.
The expected results of further research, i.e. the desired activities, including conducting comprehensive theoretical research, developing the design of eco-friendly packaging, and crafting the management plan for selling it. Reaching the expected objectives of future research can be achieved by combining several research methods. For this research, the most appropriate methods include theoretical framework, qualitative and quantitative analysis, ethnography.
The theoretical framework will be necessary to understand the specificities of the subject under investigation. Qualitative and quantitative analysis will be advantageous for determining the current trends in packaging. Specifically, the qualitative method will be deployed for estimating the primary qualities of packaging such as materials and resources used while quantitative research will be used for understanding the figures behind the determined qualities, i.e. the rate of spending on packaging and percentage of recycled or recyclable materials in packages. Finally, ethnography will help assess major stakeholder interests by understanding the preferences in packaging and whether there are any cultural peculiarities regarding the issue (Silva et al. 2015; Salkind 2012).
Moodboard creating a framework that can be sold
Nowadays, packaging, in most cases, is made of several layers of foil and plastic. These materials cannot be considered eco-friendly because they are not recyclable. After all, it is impossible to separate the layers of foil (Wu 2014). That is why the primary idea behind developing the new design is to change foil and plastic with paper, paper pulp, and recycled materials. The inspiration for this notion came from the packaging concepts shown below.
The motivation for proposing a paper and other recyclable materials as the alternatives for foil and plastic is the fact that they are cost-effective, environmentally friendly, highly flexible, printable, easily recyclable, mechanically strong, suit all sizes and shapes of the products, and are produced from consumer waste and already recycled materials (Muthu 2016; Berk 2013; Natarajan, Govindarajan & Kumar 2015).
Eco-friendly packaging for the food and beverage industry (Reyes 2009).
As was mentioned, the industry of design is the food and beverage industry. The primary advantage of eco-friendly packaging for this sector of manufacturing is that it is healthy. Moreover, because of the materials flexibility, paper and paper pulp can be used for designing creative and bright packaging for a great variety of products and drinks including water, juices, coffee beans, cocoa, nuts, chocolate and sweets, spices, and even wine.
The primary idea for the new packaging is to make it of 100% recyclable materials because, in other cases, there is no sense in switching to it. The motivation for making this statement is the fact that packages using both recyclable and non-recyclable materials cannot be considered eco-friendly because they are automatically non-recyclable (Wu 2014). The most significant detail of the concept of design is to make a package bright but, at the same time, minimalistic, so that it attracts the attention of potential consumers and provides them only with the necessary information about the product highlighting the recyclability of packaging.
This information should be mentioned on the face of a package. Recyclability is proposed to be indicated with a traditional ring of green arrows. Moreover, the design implies indicating a green leaf together with a green arrow, which would mean eco-friendliness and that a package is made of 100% recyclable materials. As of the information about the product, it is proposed to include only the name of the product itself, e.g. freshwater or coffee beans, in plain, bright text and mention the rest of the details on the back. This simple but bright design will hint to environmental friendliness on the subconscious level.
The proposed design technique, which will be used in the design process, is a hybrid one. This technique implies the combination of traditional and digital design methods. The main idea behind this strategy is to conceptualize the design by hand sketching first and then add the required details using computers and designer applications (Gorski 2015). The motivation for choosing this tool is the fact that sketching is more effective in light of communication between designers and managers and the creation of something new if compared to digital design. On the other hand, computer designing is beneficial because of the ability to simulate the project and make changes easily. So, it is the combination of two techniques, which is the most appropriate technique to introduce the new design of the packaging.
The target audience of this design project is the senior management of the companies specializing in producing food and beverages. The project aims at attracting their attention because these people develop plans and strategies for their firms future development. So, it is vital to persuade them that environmentally friendly packaging is economically, socially, and ecologically beneficial. The strategy for convincing them is conducting cost and benefit analysis of the transition towards paper and paper pulp packaging pointing.
Project management
The project process will include several interrelated steps. First of all, it is necessary to determine the problem, which should be solved, and those, who would be interested in the proposed solution. In our case, it is packaging and its relation to solving environmental issues as the problem and companies operating in the food and beverage industry as stakeholders. Second, it is required to research the problem, i.e. evaluate current trends and gaps for improvement. This step is usually the most time-consuming because it demands a thorough analysis of the economic environment and strategies of key economic actors of the chosen sector.
The next step is crafting potential solutions to the problem. In our case, it is offering to switch to bright and minimalistic packaging made of recyclable materials such as paper and paper pulp. This stage usually does not take a long time because accurate research conducted at the second phase of project design points to the gaps, which should be filled. Next, it is important to evaluate ideas and collect them to develop a design of the new packaging using the hybrid technique described above.
This process is also time-consuming because it requires intense communication and specific skills such as the ability to think analytically, creativity, and enough knowledge to operate designer applications. The following step implies reviewing the design proposal and improving it to eliminate significant defects. This stage requests communication with senior management of the target companies because it is the only way to detect deficiencies. The final step is implementation.
Because the rate of global change is spectacular, it is crucial to assure that the process is not too long because others might start promoting similar ideas. Hence, the proposed timeline is as follows:
Conducting research 1 month;
Finding solutions 1 week;
Developing design 3 weeks;
Communication with managers and changes 3 weeks;
Implementation 1 month.
References
Berk, Z 2013, Food process engineering and technology, Academic Press, London, United Kingdom.
Gorski, G 2015, Hybrid drawing techniques: design process and presentation, Routledge, New York, New York.
Muthu, S S 2016, Environmental footprints of packaging, Springer Science +Business Media, Singapore.
Natarajan, S, Govindarajan, M & Kumar, B 2015, Fundamentals of packaging technology, PHI Learning, Delhi, India.
This new energy drink aims to cater to the consumers demand for healthier options with less sugar and caffeine. Moreover, this beverage is manufactured in a local community, which is another selling point for conscious customers who want to support local brands. Some issues include intense competition in the market, with companies such as RedBull, VPX, and Monster Energy offering their products at a low cost and lack of financial support for the company. This paper details a marketing plan for an energy drink for women.
Environmental Analysis
The market of energy drinks in the United States is saturated with products and well-established players. For example, companies such as RedBull are well-established in this industry and have a substantial consumer base, and established relationships with suppliers and distributors. However, since this beverage aims to introduce a new approach to energy drinks and focuses exclusively on females, its differentiation will become a competitive advantage when compared to mainstream energy drinks.
The Marketing Environment
Competitive Forces. RedBull has 24% of the energy drink market in the state ( Market share, 2020). Other competitors are Monster Energy with 15% of the market, VPX Bang with 6.6%, and Red Bull Sugar-Free with 5.9% ( Market share, 2020). Other brands are substantially smaller and have a low presence and margin in the energy drink market.
Economic Forces. The average cost per can for a standard energy drink ranges from $2 to $4. However, a healthier energy drink option and local small community manufacturing can justify a premium price of this drink.
Political Forces. The only concern is the Food and Drug Administration (FDA), which has taken some steps to protect consumers who purchase energy drinks and dietary supplements containing pure or highly concentrated caffeine in powder or liquid forms are considered unlawful when sold in bulk quantities directly to consumers (FDA, 2018, para. 2).
Legal and Regulatory Forces. Since this is an energy drink, the final product will have to go through the FDAs approval, especially if it contains new types of additives.
Technological Forces. Technology plays an important role in engineering new types of energy drinks.
Sociocultural Forces. The consumer has begun to dedicate more attention to healthy foods and drinks, for example, those with less caffeine and sugar (Mordor Intellegence, 2020).
Target Markets
This energy drink will target females of ages 15-40, professional or amateur athletes and sports enthusiasts, as well as women interested in dietary supplements. According to the Mordor Intelligence Report (2020), the increased consumption of energy drinks is driven by demand from working professionals and health-conscious individuals. Additionally, the consistent demand for these drinks comes from athletes and people involved in physical activities. This new drink will be advertised to the local community of the Midwest, beginning with a promotion campaign in Wisconsin.
Current Marketing Objectives and Performance
The energy drinks marketing strategy focuses primarily on using the Buy One Get One (BOGO) strategy to promote it to frequent buyers of energy drinks. The drink will be sold through vending machines, at gas stations, and grocery stores. BOGO refers to a promotion deal where a consumer can receive a second product for free when paying for the first one or have a substantial discount, for example, 50%. With this strategy, this drink will be promoted to athletes and health-conscious individuals who buy energy beverages regularly. They will receive two cans and will be able to try out the new item and get used to the taste of it. By working with a few suppliers, the manufacturer will be able to ensure that they receive all the raw materials needed for production.
SWOT
Table 1 shows the SWOT analysis for the new energy drink. When matching the opportunities with strengths, this product will offer clean-label beverages with minimal use of ingredients that may be perceived as harmful. When reviewing the weaknesses and threats, this product will be launched in Wisconsin first, which will allow minimizing the financial burden on the company. Moreover, although it is a new brand, the goal will be to offer the best ingredients combined specifically for women at a low price, which justifies the beverages higher price in comparison to the mainstream competition.
Strengths
Weaknesses
Local community production and work morals and ethical standards
Low sugar and low caffeine product
Financials
New brand
Opportunities
Threats
The demand for energy drinks will increase by 7.64% in 2024 (Mordor Intellegence, 2020)
Consumers are interested in clean-label energy beverages (Mordor Intellegence, 2020)
80% of the market share belongs to Red Bull and other top-five companies (Mordor Intellegence, 2020)
COVID-19s economic effects, which may lead to consumers choosing to avoid energy drinks with premium pricing
Table 1. SWOT analysis (created by the author).
Marketing Objectives
The main goal of the campaign is to introduce the new energy drink to the consumers. Since the market is mainly occupied by one major companyRed Bull, it is necessary to educate the consumer on the benefits and advantages of this product (Mordor Intellegence, 2020). Additionally, the promotion will help justify the premium price of this product, which is linked to it being produced locally with adherence to ethical work standards. Finally, the drink should appeal to health-conscious consumers and athletes due to its low sugar and low-caffeine contents. This is important because Red Bull has launched a separate brand for its sugar-free beverages, titled Red Bull Sugar-Free ( Market share, 2020). Thus, the first objective is to introduce the benefits of this product, such as local manufacturing, ethical work practices, and healthier content when compared to the competition.
Since this is a new drink, the company will have to focus on introducing it to the consumers and ensuring that it becomes a regular purchase. The campaign will include both online and offline promotions. For the online promotion, targeted advertisements and social media campaigns in collaboration with local female influencers and athletes who will show the energy drink and explain its benefits. An essential factor of promotion is that this energy drink is designed and manufactured for females. Hence, it considers their nutritional needs and helps them maintain wellness.
Finally, the promotion and sales will focus on the Midwest region. The choice of a specific area for launch and advertising and the narrow consumer segment will allow addressing the issue of low budget and lack of financial assistance that this company currently has. The promotion materials, such as posters, should be placed at the points of sales, such as grocery shops, gas stations, and near the vending machines that will sell this energy drink.
Marketing Strategies
Target Markets
Target Market 1. Professional female athletes.
Target Market 2. Women of ages 15-45.
Target Market 3. Health-conscious women.
Target Market 4. Vending machine operators.
Target Market 5. Distributors of products to grocery stores and gas stations in the Midwest.
Marketing Mix
The company will offer one type of energy drink in two serving sizes in terms of product mix. The drink will be designed for women with low sugar and low caffeine. The price will be $3 for a small serving and $5, which is higher than the market average. The distribution channels will include vending machines, chain grocery stores, and gas stations. The promotion will consist of social media campaigns and in-store events, and posters.
Markeitng Implementation
Introducing the energy drink to the market.
R&D Stage 1. The marketing team will gather data by March 30th.
R&D Stage 2. The product designer and the technical specialists will create the test drink by April 30th.
Testing. The focus groups will participate in testing to evaluate the qualities of the energy drinks and their presentation by May 10th.
Launch. The marketing team and product design team will launch the product and the marketing campaign by June 1st.
Audit. The marking team will evaluate the sales figures and response to the product by September 30th.
Evaluation and Control
The primary strategy for evaluation and control will be consumer surveys. Through them, the management will assess the perception of these energy drinks by the target market and the appropriateness of the selected differentiation strategy. The performance in the form of sales will be evaluated in comparison to the marketing plan objectives. Finally, the response to social media posts and consumer feedback will be used for analysis by the marketing team as well.
The proposed research is focused on the investigation of the company Soft Drinks S.A and its failure to capture the expected market share by its new product. The need for the given research is justified by several factors. First of all, the inability of soft drinks to attract clients results in substantial financial losses, which might result in the companys collapse. Second, low sales of a new beverage might indicate the existence of crucial problems in the companys functioning, its main operations such as market analysis, promotion, and distribution. For this reason, the study of the given question can help to acquire data useful for the initiation of the change process and improvement of the firms results.
The major problem that should be researched is the inability of a new soft drink to demonstrate the desired level of sales and customer interest. It is defined that brand awareness, brand image, and product positioning can be taken as the three major factors that preconditioned the emergence of undesired outcomes and the lack of planned income. For this reason, the research should be focused on the analysis of these three aspects with the primary goal to determine the leading causes and conclude about measures that can be employed in the future to avoid similar results when launching a new product line.
To ensure the in-depth and comprehensive analysis of the problem, the following objectives are also formulated:
Identify customers attitudes to the new product
Determine clients attitude to the brand
Research demands of the target audience
Collect customers feedback about the products taste
Adherence to these objectives is vital for the research project as it will help to collect relevant information and conclude about the impact of these factors on sales, outcomes, and the future of the company. At the same time, these objectives introduce the framework for the investigation and guarantee that all essential aspects will be considered.
The existing issue and objectives impact the formulation of the research hypotheses that will help to select the appropriate methodology, analyze the problem from different perspectives, and conclude about real causes of failures. Regarding the information mentioned above, two hypotheses are formulated:
Insufficient promotional activities preconditioned the firms inability to increase brand awareness among the targeted audience and create a positive brand image
Poor analysis of the target audience, its demands, and the market resulted in critical problems with product positioning and its taste.
The introduction of these hypotheses also means the choice of the descriptive study design as it is vital to describe the selected variables and determine their impact on the functioning of the company.
The accuracy of the information and its relevance is fundamental for the proposed research project. For this reason, primary data should be employed as the central source of knowledge (Cooper and Schindler, 2013). The correct analysis of the products failure is possible only if the feedback of the target audience is evaluated. It is vital to develop an effective research design that will help to collect information about the product and factors that are associated with it. There are dependent and independent variables demanded to determine the correlation between the investigated factors (Cooper and Schindler, 2013). Thus, the brands image, awareness, and taste of products are independent variables as they are used to explain the outcome that can be observed. At the same time, the customers attitude to the beverage is a dependent variable as it is impacted by the factors mentioned above.
Regarding the nature of the research and the need for primary data, the survey can be considered the central data collection tool that helps to conduct qualitative research. First, it can help to acquire up-to-date information about clients preferences, expectations, and attitudes to the presented product (DeVellis, 2016). Second, it can be easily distributed among the target audience by using e-mails or other ways that are convenient for participants (Cooper and Schindler, 2013). Finally, surveys are known as sufficient data collection tools that can help to create the basis for the research and conclude about the investigated variables. For this reason, the choice of this approach is justified by the purpose of the study and its objectives.
The approach to the selection of the participants of the research should consider some leading factors. First, all individuals should belong to the target audience, as it is critical to understand the primary causes of the products failure (DeVellis, 2016). Additionally, the demographics should possess the desired buying capacity. It is also vital to ensure that the appropriate age group is selected for the research. For this reason, a specific approach to sampling should be chosen as it is a key to the improved data collection and formulation of relevant outcomes, which is vital for the proposed study.
The planned outcomes presuppose that tanimproved understanding of the basic causes for the deterioration of the situation and failure of the product will be acquired. Due to the collection of primary data, the company will be able to create a plan to introduce a positive change and ensure that no similar problems will emerge in the future. Additionally, the project can help the company to focus its efforts on activities that are vital for this survival and improved work such as promotion and analysis of clients feedback (Kotler and Keller, 2015). For this reason, the project can be considered an essential step towards the creation of a new business environment beneficial for higher sales.
Because the project presupposes the involvement of individuals, it is vital to observe the ethical code. Their participation should be voluntary, which means that all testees should provide their informed consent and be ready to give their personal information (Cooper and Schindler, 2013). Additionally, they should be guaranteed the anonymity and confidentiality of all data pieces they give. It will help to avoid ethical claims and problems.
Altogether, the given project aims at the generation of an improved understanding of the basic causes for the products failure. It can be achieved by collecting data from participants and its analysis to determine if brand awareness, image, and poor taste are vital for the discussed outcomes.
Sampling
The primary goal of the proposed study is the analysis of the product and its failure, which means that there is a need for an in-depth investigation of the target audience. It will help to collect information about attitudes, preferences, and features that should be present in the product to guarantee its success and high sales. For this reason, there is a need for an effective sampling design to include customers who can provide relevant and accurate data and create the basis for the research. The nature of the project also presupposes that populations with specific features should be inincluded
Every brand has its target audience that possesses its unique characteristics that are employed to popularize products and guarantee a high level of interest towards the existing or new offerings. For Soft Drinks S.A., it is critical to determine the leading reasons why its potential clients are not interested in a fresh beverage. It means that non-probability, purposive sampling can be employed as a sufficient approach to selecting participants of the research (Cooper and Schindler, 2013). First, it will help to take a group that is most useful for the study and acquire detailed knowledge about the phenomena under investigation (Cooper and Schindler, 2013). Second, the employment of this model will generate a better understanding of the basic demands of the target audience and introduce appropriate changes to ensure that future promotional activities will be able to affect individuals and trigger a high level of interest in the proposed product (Patten and Newhart, 2017). In such a way, non-probability, purposive sampling is selected as the approach for selecting participants.
The sample size is also determined by several factors. It is fundamental to ensure that the number of individuals is sufficient to analyze the problem and create the theoretical framework for its discussion. At the same time, the inclusion of too many participants might contribute to the appearance of unnecessary sophistication and complexity of the research and corruption of final data. For this reason, it is recommended to distribute surveys among 50 testees as it will be enough to acquire an improved understanding of the current problem and either prove or refute the hypotheses formulated above. The population under study should possess all characteristics peculiar to the target audience of Soft Drinks S.A. It means that their age, buying capacity, and behavior, along with the preftheirnces, should be considered by the company when designing promotional activities and products. It means that there are strict demands to age range, income level, and preferences.
Altogether, the proposed approach to sampling is justified by the fact that it will help to align the effective data collection procedure and avoid corrupted or biased data. At the same time, the employment of this paradigm can help to analyze the problem from various perspectives and conclude about the importance of such factors as brand awareness, image, and product taste, and their impact on the failure of the discussed product.
Data Analysis Plan
The correct analysis of acquired data is vital for formulating conclusions and outlining the basic causes of the products failure. For this reason, it is required to select an effective approach to processing data and its systematization to avoid critical failures or the use of corrupted information that might precondition new fatal errors in the future. Regarding the proposed research project, it is fundamental to determine the correlation between independent and dependent variables and provide recommendations towards the improvement of outcomes resting on knowledge generated in the course of research.
As it has been stated previously, the selected research paradigm presupposes the existence of two basic variables. The independent variable includes the brands image, awareness, and taste of products as they cannot be altered at the moment and affect outcomes. The customers attitudes and choices are dependent variabvariablesey are impacted by the discussed features. The designed survey tends to collect data about the influence of these activities on the mentality of clients, their behaviors, and readiness to buy the new product offered by the company. The data collection tool follows the research objectives and contains groups of questions related to the proposed hypotheses, as it is vital to acquire information that can either prove or refute them.
Prior to processing data and its discussion, it is vital to structure all answers and categorize them. The major domains might include the attitude to the brand, the effectiveness of the promotional campaign, and the quality and features of the product that failed to become popular among the target audience. The given division is important for the analysis of the selected issue as the first assumption presupposes that three areas were central in the products failure and its inability to achieve the desired level of sales (Patten and Newhart, 2017). For this reason, by using this approach to structuring, it is possible to determine the impact of all these features and discuss them separately.
The existence of several independent and one dependent variables justifies the use of the regression analysis as one of the possible approaches. It helps to reveal the impact of a certain factor on another one and determine its behavior. One of the benefits of this method is the ability to visualize the change and prove the existence of specific relations between the investigated aspects (Easterby-Smith, Thorpe, and Jackson, 2018). For this reason, answers provided by clients can be processed by using this approach to determine how the problems in one of the mentioned domains contributed to the establishment of the environment negative for the product and its further sales.
The data acquired due to the implementation of regression analysis can be presented by using graphs to demonstrate the existence of the correlation between the mentioned factors and how they impact the attitude to the product. At the same time, it is possible to use tables to represent data in more understandable ways and structure it to improve readers comprehension (DeVellis, 2016). It will also help to discuss the selected features and conclude about their importance for the promotion and sales of the product.
Altogether, the selected approach to data analysis can be considered an effective method to process all information acquired via surveys. The outcomes of the study and project depend on the selection of the appropriate data collection and analysis tool. For this reason, the employment of regression analysis to structure and present data seems a sufficient option as it will provide the basis for further discussion and creation of recommendations for the company to avoid similar problems in the future and guarantee that new products will be met by the audience positively.
References
Cooper, D. and Schindler, P. (2013). Business research methods. 12thandn. New York, NY: McGraw-Hill Education.
DeVellis, R. (2016). Scale development: theory and applications. 4th edn.Thousandn Oaks, CA: Sage Publications Ltd.
Easterby-Smith, M., Thorpe, R. and Jackson, P. (2018). Management and business research. 6th and. Thousand Oaks, CA: Sage Publications Ltd.
Kotler, P. and Keller, K. (2015) Marketing management. New York, NY: Pearson.
Patten, M. and Newhart, M. (2017) Understanding research methods: an overview of the essentials. 10th and. London: Routledge.
The paper presents a study of the innovation in food and drink industry, specifically fast food sector. The fast food sector has innovated itself to meet the changing consumer need and therefore have invested in biotechnology, food technology and robotic sciences. They have invested in development of skilled labour that can contribute to the innovative processes. The paper discusses the innovations adopted by the fast food sector and provides a description of their innovation model. The paper provides the reasons that influence the need to innovate in the industry and the barriers that stop innovation from taking place. It further provides an explanation into why innovation in fast food industry is important, and provides a trend in innovation in the industry in past and present.
Introduction
The fast food market is a part of the food and drinks sector that posits a complex and diverse structure. The sector provides various possibilities for innovation but also creates many barriers such as human resource issues and financial to curb those innovations. As food industry is also related to health of the consumers and associated with the different senses, it is necessary to provide adequate innovation to provide safe and healthy food that is also satisfactory to the senses.
The specific sector within the food and drink industry that we intend to study is the fast food sector. Fast food industry has increased by 92% in 2012 since the 90s (Food for thought 2012). Though one of the issues that the food and drink industry, especially the fast food industry faces, is the rising problem of obesity and other health issues emerging that would affect the trend in the market (Michman & Mazze 1998). It is a known fact that the unhealthy menu offered at McDonalds or KFC provide higher profits to the companies, however, without product-innovation that would address the health issues that their products create, continuity of business may be jeopardized (Cutting edge fast food innovations of 2013 2013).
In this paper, I will focus on the fast food sector in the food and drink industry to understand the innovation trends that has been undertaken to adjudge the sectors compatibility to the emerging trend towards healthier food.
Fast Food Sector
Fast food is actually any food that can be prepared very quickly (Is eating out back in? 2014). In 2012 and 2013, the food and drink industry in US rose by 0.6 percent while that in Russia by 7.8 percent and Germany by 1.8 percent. Industry trends show that the fast food sector has shown greater growth in 2012-13. Full-service industry in Europe faced as decline in customers in full service restaurants declined by 13 percent and in 2013 (Is eating out back in? 2014). However, the same in fast food sector saw an increase of 54percent turnover (Is eating out back in? 2014). Therefore, the fast food sector, though faces a threat from changing food habits in urban population, has shown an increase in sales in Europe even during recession.
Past and Present Trend in Innovation
Skills Innovation
Fast food industry, especially the larger companies like McDonalds require, (a) employees with low skill levels and (b) highly skilled workforce such as scientists, food technologists, and food engineers. However, the unavailability of such skilled workforce has created a great barrier to innovation for the fast food industry. The unavailability of such high skilled scientific personnel may be due to general perception being low-tech and low wage industry. The share of skilled educated workers in the food and drink industry is believed to be 6.6 percent tin Europe as compared to 13.7 percent in other manufacturing sectors (Leis, Gijsbers & Zee 2011). Still 2005, the share of training provided by the companies to its employees was far below the manufacturing industry standard.
In order to meet with the shortage of high skilled workers, large fast food industries are investing in building programs that would train food technologists and scientists who would reduce the gap of labor demand and supply in the fast food sector.
Further, the larger companies in the sector are investing in robotics industry in order to utilize the advent of artificial intelligence to device cheaper labor alternatives.
Sector Innovations
Some trends that can be observed in the fast food industry that are creeping in are the trend of adoption of organic, more natural food. The large-scale fast food industries like McDonalds and KFC developed in the fifties in the US. The development of genetically modified food and animal cloning technology has become a part industry since the 80s. The issues that plagued the fast food industry are health concerns such as obesity, diet-caused illness, allergies, reduction of immunity, aging, etc.
The fast food industry benefits a lot from advancement in the advancement of science and technology, especially biotechnology, molecular biology, etc. presently, fast food chains selling pizzas and other snacks are criticized as they are believed to increase chances of obesity. Thus, the main issue here is imbalance in the nutrition provided by fast food. McDonald, one of the largest fast food chains in the world, have made an effort to change this image of unhealthy food by incorporating healthier options such as salad in their menu (Cutting edge fast food innovations of 2013 2013). For instance, Nestle will start using natural ingredients for all its ice cream freezers from 2015 (Eagle 2014). Further, innovation is not only required in food but also in the packaging in fast food sector. Innovative packing and designing has to move fast, other affecting the relevance of the food in the industry (Arthur 2014; Nesta 2014). Using IT solutions for better customer service and customization of products is required for food industry (Spinner 2014; Blank 2014). Thus, sustainable and innovative fast food could become an option for the future (OECD 2014).
Therefore, the factors that affect the innovation in the fast food industry are as follows:
Availability of skilled workers: the availability of scientists, food technologists, food designers, and product designers is essential for innovation in food industry. Therefore, availability of labor and innovation in skill is essential for creating new and better product.
Trend towards Organic and Healthy Food: Health issues are correlated to food and drink industry as the consumers eat and digest the product sold. Hence, proper health and safety measures must be in place. Further, fast food industries face a threat from the changing trend towards healthier food options (Department for Business Innovation & Skills 2014). Therefore, the fast food sector must innovate its product offering to provide healthy fast food.
Providing better service: Food industry is an amalgamation of product and service industry. Therefore, fast food companies like Pizza Hut and McDonalds have to concentrate to provide good customer experience. In order to enhance customer experience, innovation in services through adoption of software like ERP or RFID is essential.
Innovation in Fast Food Sector
So what kind of innovation do we observe in fast food sector? The understanding of the past and current trend in fast food sector innovation, a model for innovation can be developed (Innovation Union Scoreboard 2014). The trend in food market demand and the change in labor market have induced the changes in the fast food market are observed in figure 1. The two factors from the external environment that may affect innovation are trend in labor market and demand for healthier fast food. This model is consistent with the interactive model of innovation as the forces from the external environment enforce the changes on the fast food sector, therefore changing its internal operations.
Figure 1: Model for Fast Food sector Innovation
Barriers to Innovation
The barriers to innovation in the fast food industry are that from social and technological innovations point of view, are related to the inputs for innovation in science and technology. Risks related to the innovations and the sustainable use of the innovation becomes a barrier to innovate. Technological innovation in other sectors like automobile does not usually imply success in innovation as a source of economic profit. But in the fast food industry innovation that transforms the unhealthy food to healthy food is definitely a source of economic profit. The barriers to innovation definitely are the unavailability of skilled innovators.
Conclusion
The investment in innovation and R&D by fast food companies is much lower than other manufacturing companies, but they are as dedicated to build an innovative product and service line as any other companies due to the rapid change in consumer preference. A detailed analysis into the trends of innovation set in the sector shows that the industry leaders like McDonalds have tried to engage in innovative product offering and developing their skilled workers. Further, trend has been observed to innovate packaging of their products, incorporate healthier menu (Hayden 2014; Sozzi 2014), investment in ERP software and robotic technology. Overall, the assessment of innovativeness of the sector shows though not equally at par with other manufacturing industries, it has equipped itself to be more innovative in the future.
Nova Energy Drinks company is an innovative solution in the beverage industry, offering a healthy alternative to a conventional energy drink. Excelled both in sales and social performance, Nova Energy Drinks is ready to distribute its product past the US territory, looking for long-term investments. This case-study assesses the risk of extending business realms to two areas in South America: Argentina and Venezuela. Taken into consideration the analyzed demographics, cultural and legal barriers, as well as effects of currency, the option of penetrating the foreign markets should be carefully reconsidered.
Demographic
Argentina
Though located in South America and deeply embedded in the continents traditions, Argentina differs from most of the neighboring states. An index of 49/100 in the power distance category points at the residents lack of desire and readiness to accept hierarchy, suppressing own interests in the frames of social inequality (Hofstede Insights, 2020a). When it comes to individualism, Argentina scores 46/100, remaining the most individualistic country in the South America (Hofstede Insights, 2020a). While standing on the middle of the individualism spectrum, Argentines still exhibit few collectivistic qualities, such as an obligation to follow family traditions or get approval from the social circle.
In the masculinity dimension, Argentina shows the prevalence of Masculine elements over Feminine. In reality, the score of 56 translates to assertiveness, strong ego needs, and achievement orientation over relationships (Hofstede Insights, 2020a). Talking about uncertainty avoidance, Argentines score particularly high 86/100 which means their strong need for strictly defined legal systems and sets of laws to live a structured life (Hofstede Insights, 2020a). In terms of long-term orientation, Argentina holds an index of 20, establishing itself as a normative society where the absolute truth is prevalent and traditions are deeply respected (Hofstede Insights, 2020a). Argentines dont save much money for the future and frequently fall for immediate gratifications. This finding comes consistent with an indulgence index of 62 (Hofstede Insights, 2020a), as Argentines like spending money for their hobbies and act on impulses.
Venezuela
Unlike Argentina, Venezuela scores high in power distance, tending to accept social hierarchies easily, considering them to be a part of their everyday life. With an index of 81/100, the power tends to be concentrated in the hands of few public officials, leaving many people feeling helpless (Hofstede Insights, 2020b). With a score of 12, Venezuela tops the list of collectivistic cultures in the world. It is important for Venezuelans to belong to a group and align with their opinion (Hofstede Insights, 2020b). Relationships are often valued more than results, and compromises are especially valid in the working environment. An index of 73 in the masculinity field means that the residents of the country are driven by success, competition, and status (Hofstede Insights, 2020b). Interestingly, they do not compete with individuals in their social group, projecting the rivalry toward other groups.
Similarly to Argentina, Venezuela scores high on the spectrum of uncertainty avoidance. Venezuelans seek mechanisms to express themselves openly, either in terms of rules or emotions to avoid ambiguity (Hofstede Insights, 2020b). Following the demographics description of Argentina, the score of 16 indicates that Venezuelan society is highly normative in thinking. Finally, when it comes to indulgence, Venezuela heads the ranking with an absolute highest number of 100 (Hofstede Insights, 2020b). People living in this country often act on their impulses, enjoying life to the fullest and spending much expenditures on leisure time.
Barriers
Cultural
Not a lot of cultural barriers can stand on the way of Nova Energy Drinks entering the market. One prevalent, though, is collectivist culture in Argentina and Venezuela. The practice of drinking energy drinks is commonly frowned upon by the older generation. Thus, with the need to belong and receive approval from their social circle, many potential customers in the targeted market can avoid making a purchase despite their tendency for immediate gratification.
Legal
Though there are not many cultural barriers to enter the foreign market of Argentina and Venezuela, there are much more legal constraints. It is very complicated to get a permit for electricity supply in Argentina which may slow down the production and distribution. Registering property in the country is a complex, multistep process consisting of 7 procedures and lasting about 55 days (Argentina Investment & Trade, 2016). The average in the neighboring states is 26, almost twice less. Before the actual registration can even begin, the owners have to obtain dominio, a certificate of ownership, and inhibiciones, a certificate of good standing (Argentina Investment & Trade, 2016). Another legal restraint is paying taxes: foreign investors have to make 9 payments a year. High taxing rates and confusing system may worsen the working conditions (Argentina Investment & Trade, 2016). Additional legal barriers may come from the Venezuelan side, influencing the quality of Nova Energy Drinks distribution ( Top 10 challenges of doing business in Venezuela, 2020). Export-import trade agreements are surprisingly slow: it takes up to 50 days to export and 70 to import ( Challenges of doing business in Venezuela, 2020). Another restraint is getting entrepreneurial loan in Venezuela: corrupt financial transactions and bureaucratic measures make it hard to obtain credit.
Effects of Currency
Argentina
In terms of currency, it is quite risky to penetrate the energy drink market in Argentina. Since 2011, the state government announced tight currency controls which led to the large drop in the commodity prices and decreased trade revenue ( Argentina imposes currency controls to support economy, 2019). One of the long-lasting effects of such intervention is floating exchange rate. The Argentinian national currency devalued by 30% over the course of one year: in 2017, 1 USD = 17.40 Argentinian pesos while, in 2018, the rate rose to 1 USD = 38 Argentinian pesos. By 2019, the Argentinian currency experienced even a bigger decline 54% against the USD dollar ( Argentina imposes currency controls, 2019). Such devaluation might carry potential risks for the investors of Nova Energy Drink who can bring capital in a country which no longer has reserves of its own currency.
The worth of Venezuelan currency, bolivar, is even more devalued than Argentinian pesos: per 2019, 1 USD = 636,771.03 Venezuelan bolivars (Caracas, 2019). The hyperinflation in the country already had adverse effects on the market, slowing down export-import relationships (Caracas, 2019). The current situation can be particularly dangerous for the Nova Energy Drink as customers wont be able to make even a small purchase without having foreign currency. Therefore, one key positive factor uniting the two countries is cheap cost of business maintenance. Negative factors are much broader: lack of social responsibility, potential exploitation of labor, devaluation of currency, and others. When hiring local distributors, Nova Energy Drink might go against its current business model of social responsibility, using cheap labor from the developing countries to achieve its objectives. Consequently, this analysis provides a solid ground for reconsideration of the target demographic.
In comparison to the US, doing business in Argentina and Venezuela is much cheaper. For example, the minimum wage in the US is 7 USD per hour, while in Argentina it is 2.8 USD per hour (International Labour Organization, 2020). Venezuelan minimum wages are particularly depressing: more than half of the residents of the country receive 2 USD per month. The cost of utilities costs less on both territories; moreover, electricity, heating, and water supply is less regulated than in the US. However, it is important to note that multiple types of taxes can bring the cost of business maintenance in Argentina and Venezuela down, causing additional expenditures.
Social Responsibility
Nova Energy Drinks company thrives to lead the business with the utmost integrity and ethics, based on the framework of the triple bottom line. The organization plans to enter the Argentinian and Venezuelan market not only with the sole goal of making profit but also with the objective of caring about the people and planet. In its production, Nova Energy Drinks follows the guidelines of sustainable production, reducing carbon footprint and greenhouse gas emissions. All products are clinically tested, and dosages are carefully checked by the professionals weekly (Camilleri, 2017). No animal testing is permitted to approve the new energy drinks with respect to the animal rights (Camilleri, 2017). The company makes sure to inform the customer of the potential risks associated with the consumption of the product.
Nova Energy Drinks tries to improve the life of the communities where it operates by improving access to clean water, better education, and healthcare. All employees hired by the organization receive a full package of social benefits and a competitive salary, twice higher than a minimum wage in the respective territories (Camilleri, 2017). In the given scenario, the bottom of the pyramid demographic is members of the low class who are currently unemployed or receive minimum wage. Though these people might not constitute a targeted audience of the product, they will be welcomed to entry the social responsibility model as potential employees of the company.
Management Infrastructure Requirements
Not many management infrastructure requirements are publicly identified for the potential investors. From the Argentinian side, Nova Energy Drinks will go through the IDBs Flexible Guarantee instrument. It is a policy issued to foreign investors and financiers signifying their public commitment to rely on the states competitive advantage while doing business (Argentina Investment & Trade, 2016). Unfortunately, Venezuelan market does not have precise guidelines, informing the investors about the management infrastructure requirements. More in-depth research in foreign language will be needed in the future if Nova Energy Drinks company decides to distribute their products in the Venezuelan market.
Conclusion
Nova Energy Drinks company explores new potential opportunities of moving to an international arena, penetrating two foreign markets in South America: Argentina and Venezuela. The demographic of the customers is as follows: mostly collectivistic, mostly masculine, highly indulgent, and highly uncertainty avoidant. One big difference between the two targeted audiences is that Argentinian society is more egalitarian and less likely to accept substantial social gaps. Some of the barriers to enter the market include collectivistic nature, high taxes, credit issues, poor access to electricity, and prolong period of obtaining property registration. Talking about finances, Argentinian peso experiences significant devaluation, resulting in fluctuating exchange rates. At the same time, Venezuelian bolivar went through massive hyperinflation, no longer circulating on the foreign trade market. The company plans to proceed with the social responsibility model, caring about three aspects simultaneously: people, profit, and planet. Further research is required to identify potential infrastructure management requirements.
