Food And Beverages Industry

The food and beverages industry is all companies involved in processing raw food materials, packaging, and distributing them. This includes fresh, prepared foods as well as packaged foods, and alcoholic and nonalcoholic beverages. Any product meant for human consumption, aside from pharmaceuticals, passes through this industry. The industry is fragmented. The production in this industry is divided among a few different companies, however, no single firm has large enough share of the market to be able to influence the industry's direction or price levels.

The primary demand drivers of the industry includes demographic shift (particularly trends in population and age, household size, and disposable income) and consumer tastes while profitability drivers includes good product mix, efficient operations, superior service and effective marketing. It is highly labour intensive with low use of capital.

The industry is divided into two major segments. Those two segments are production and distribution of edible goods. Production includes the processing of meats and cheeses and the creating of soft drinks, alcoholic beverages, packaged foods, and other modified foods. The production segment of this industry excludes foods that were directly produced via farming and other forms of agriculture, as those are encompassed by our definition of the agriculture industry. Distribution involves transporting the finished food product into the hands of consumers. The industry is much more focused on technology and mechanical manipulation of raw foods to create more value-added food products than the agricultural industry.

In the distribution segment of this industry; SYSCO, US Foodservice, and McLane Company are the major companies. In the processing segment; diversification and expansion has led to companies being involved in many different markets. PepsiCo is a major part of the beverage and, with their Frito-Lay brand, food processing segment. Nestle is the world’s largest food conglomerate and Kraft and its subsidiaries are very involved as well. In addition to PepsiCo, the nonalcoholic beverage is dominated by Coca-Cola and Dr. Pepper-Snapple. The big companies in the alcoholic beverage market are Anheuser-Busch InBev, MillerCoors, and Diageo.

Due to the recent economic meltdown, consumers are looking to save as much money as possible. One major way that consumers are doing so is by purchasing more  generic foods  and making their own meals, not going out to eat. This is causing food processing companies to become more innovative to decrease the cost of goods sold, attract more customers, and increase profit margins.

The large amount of obesity in the world has a major effect on the food and beverage industry. There has been an increase in demand for health foods and more informative nutritional labeling. Both of these trends have caused companies to release lower calorie foods and to better control how their brand is viewed. Companies want to be viewed as a healthy brand and are promoting activities, such as youth sports, that show this healthy image. There also is mention of a tax on foods known to lead to obesity in order to curb consumers’ usage of them.

The food and beverage industry has seen their profit margins decrease recently. However, due to the falling cost of commodities, these margins should increase in the coming years. Food is a necessary part of life and will always be needed. Those are some reasons why this industry has an above average outlook.

For further information check 

http://globaledge.msu.edu/industries/food-and-beverage

Industry Insight : Agriculture

Agriculture dates back nearly 10,000 years. The agriculture industry is made up of Individuals, companies and corporations that are involved in the production of food or crops for consumption purposes. This includes both firms that specialize in raising animals as well as enterprises that specialize in growing crops. The animal production segment is not limited to traditional beef, dairy, chicken, or pork farms, but also apiaries (bee farms) and aquacultures (fish and seafood farms). 

Similarly, plant production comprises food crops, greenhouses, nurseries, and field crops such as tobacco and cotton. Agriculture is both an old and new industry; it has been in practice for thousands of years, but the forms of production have been under constant evolution. However, despite all of the evolution in the industry, the basics remain the same; to sow and harvest crops for consumption or use by humans. The agriculture industry also includes the agriculture support businesses that produce the seeds, farm equipment, and other goods and services that have helped the agriculture industry become more efficient and productive over the years.

The vast majority of farms and ranches are small family-owned affairs, but corporate farms, which account for only 10 percent of the total number of firms, produce over 75 percent of the agricultural output. Certain sections of the industry may be concentrated, but on the whole, the industry is very fragmented. Major corporations on the crop growing side of the industry include the Dole Food Company and Del Monte Fresh Produce; on the animal raising side, Cargill, Tyson Foods, and Smithfield Foods are better known. Nestle is the largest food conglomerate by measure of sales and is involved in many facets of the industry.

The Agriculture industry is Fragmented. The production in this industry is divided among a few different companies, however, no single firm has large enough share of the market to be able to influence the industry's direction or price levels. It is moderate labour intensive with high capital intensity. The primary demand drivers of the industry include domestic federal agricultural policy programs, domestic food consumption trends and accessibility of export markets while the profitability drivers include maximizing crop yield and minimizing pest damage and disease risk.

The fact that the rapid growth of the world’s population has caused an increase in demand for food production has become an issue with many problem. The negative environmental impacts of large-scale cultivation, such as soil salination, the loss of ecosystems as they are turned into arable land, air pollution from burning fossil fuels for farm machinery and from the vast numbers of livestock, land pollution from fertilizers, and the reduction of diverse biomasses to a select few species of flora and fauna that the industry has deemed profitable. As the interest in biofuels continues to grow, expect the price of the crops used to produce these fuels to increase as well. Finally, there are concerns about the increased usage of genetically modified organisms (GMOs).

In spite of all the concerns raised, the future of the agriculture industry is strong, as it will always be. In many countries, this industry is subsidized by the home government to make up for tight margins, but no matter how agriculture is accomplished, the world population is growing and this industry must grow in proportion with it. People will always need something to eat, and that is why this industry is the backbone for nearly every economy.

 

For those investors who are interested in understudying the industry, considering the following resources among others would not be a wasted effort.

·         AgriculturalMarket Information System (AMIS)

·         AgriculturalResearch Science (ARS)

·         AgricultureIndustry Today

·         AgricultureLaw

·         Agriculture.com

Over recent years, the agricultural industry has experienced high price volatility. High prices defined the previous five years but a rebound in supplies of major crops has helped restore market balances

Entrepreneurs Smell Opportunity

In Ayede area of Odomeje, the State Police Command arrested two men for allegedly kidnapping and raping a girl. The two drunken and remorseless drug addicts shattered the life of the ten-year-old beautiful girl. It was alleged that within a few days of upload, the nude photographs went viral on social media, exposing the girl (Name withheld) to ridicule and shame. The prosecutor said the offences were contrary to and punishable under Section 409, 269, 144(1), 258, 135(2), 150(1)(2), 228, 56(a) of the Criminal Laws of the Odomeje Region 2011. It was reported that the one of the defendant gave written confession and the other said he was not guilty. The magistrate Mrs. B. F Mabayeje, admitted the defendants to bail in the sum of N300,000 with two sureties each in like sum. The mostly Yoruba town reacted with shock and horror at the inhuman crime perpetrated by those men. Until the old non-indigenous Biafia war veteran father of the girl acquired an hunter gun and a machete and he took justices into his hand in a broad day light.

In the midst of his criminal trial, which was branded the biggest criminal trial in the town, as there was a life on the line? Pressure was so thick you could see it in the air. Courtroom was packed and security was tight. Half of the people hated the defendant and his young but brilliant lawyer. The other half prayed he get off because he is one of their own. It was a trial of all trials. The tribal implications are enormous. A non-indigene father killed two indigenes that raped and left her daughter to die. This trial was different.

The side street leading into the village square became congested as cars from all directions inched towards the high court. Hundreds of non-indigenes left their vehicles in the street and walk solemnly towards the square. The Inspector of police and his men directed traffic until the highway and streets leading to the high court were hopelessly gridlocked.

Danbam and every full-time, part time, retired and prospective members of ACF (Araokeoya Consultative Front) in the entire state found their way down to the town. Thousands of their fellow non-indigenes were there with waving their placard and yelling their lung out. They had vowed to walk around the court until their man was acquitted and allow to go home as a free man. All the policemen in the village were now at the court and the governor had requested the presence of the military men armed to the teeth.

The OPC (Odomeje Peoples Confederate) had earlier added another dimension to the trial. They had intimidated all that were directly or indirectly involved in the case. The lawyers house; one of the landmark of the town had been burnt down. It was reduced to smoldering wreckage. His secretary and her husband were seriously beaten and the poor man did not survive it. The beautiful and brilliant law clerk was harassed and left to die in the forest but for the help of a good Samaritan. Even the judge who had earlier proven to be strong hearted was showing hints of frustration at that point. The tension increased when the OPC leader in the town was killed by an unknown man, after his historic address at the front of the court. A firebomb was thrown at him. The OPC proved ready for the assault, within seconds, the front of the high court was a great battlefield. The police officers had to form dividing line between the non-indigenes and the indigenes while the military men were surrounded the court. Some bystanders were thankful for the truce.

After the closing argument of the two lawyers, the judge decided to break for the lunch. The court was crowded by with the curious, the press, and small army of jealous lawyers. Seat in the court was so precious that none of the spectators, law students, law clerks, reporters and other were willing to leave for the lunch. They were ready to suffer in the course of the lunch rather than let the seat go. The people of town were at that courthouse and were willing to forgo their lunch; tough decision but quintessential one for that matter.

Olaiya could smell the opportunity. He could sensed people in need. He felt their willingness of the people to stay in the court and still have their lunch. We all like to eat our cake and have it. Olaiya ran out of the court, navigate through the crown, he returned in few minutes with a shopping cart filled with a wide assortment of sandwiches, meat pie, eggroll, and disposable plastic plate filled with fast food from the closest sweet sensation. He began yelling towards the far end of the court, he pass the food to his customers. He worked his way slowly to the front of the row. A sandwich, meat pie and eggroll went for 150naira each in the court, their cost 100naira. Lacaera, VijuMilk and  teem and other drinks went for 200naira, their cost 100. A plate of the packed fast food went for a thousand naira, it cost 750naira. He sold out before within two rows. He began taking order from the rest of the courtroom. Olaiya was the man of the moment.

With a fistful of orders, he raced from the courthouse across the square….he ran to the nearby fastfood kitchen and return with the order. At the end Olaiya was jubilant not for the judgement passed but for the enormous profit he has made within the 2 hours recess of that trial of all trials.

Entrepreneurs have unique characteristics that separates them from others; their ability to easily see business opportunities. Some of them have uncanny ability to see a business opportunity in everything around them. It is as if they have a special radar device built into their senses.

We All Start SOMEWHERE

A Census Bureau data in America show that most of the net employment gains in the United States between

1980 and 2005 come from firms younger than five years old. Without startups, the average annual net employment growth rate would actually have been negative. Economist Carl Schramm posited that for the United States to survive and continue its economic leadership in the world, it must see entrepreneurship as its central comparative advantage. Nothing else can give it the necessary advantage other than entrepreneurship. Equally, the problem of continuous raise in unemployment figure across the world would only be reduced by efforts of entrepreneurs.

The success of the business will not be measured by the dollar return per hour of work or by dollar return on amount of investment. Rather it will be measure the by entrepreneur’s ability to be able to solve a larger problem by creating overall satisfaction for the owners, the community, government, customers, suppliers, competitors, creditors, employees and other stakeholders.

There are many factors that serve as internal motivator for individual who go into business. Nevertheless, some are just born entrepreneur. I mean, they are just serial entrepreneurs. They will never be satisfied working for others; something will keep propelling them until they are able to solve problem(s) that will not only create satisfaction for customers but one which customers would gladly pay for. There are others, who will just build up their business slowly and prudently, they take all the measure in the books and all those they can pick from trained consultants and other sources. There are even other groups; those whose entrepreneurial energy can only be awoken when their company liquidates or they are fired and find themselves out of job. The wiser ones get into part time businesses at the slightest detection of daily increase in the uncertainty surrounding. Moving closer to the retirement age is the impetus for others. The final group includes those fresh graduates who had realized that it difficult to get job because of the scarcity of vacancies for people without some level of working experience or right connections.

It must be stated that self-confidence does not mean perfection, we all make mistake, those who did not ever make mistake had probably did not make anything. An entrepreneur should clearly understand the concept of failure and failing both in life and as in business. Forget that view that state that success is everything and everything has to produce a success. In reality, most successes came from a succession of failure from which the individual learn more about the activity. Edison was reported to have said that he did not fail ten thousand times when inventing the bulb; he just found ten thousand ways that did not work. Imagine if he had quitted at 9999 attempt probably we would all still be using candles or lantern. On the other hand, the most painful thing is that the 1000^th attempt might lead to another person’s success; all that credit goes to him

Startup businesses usually succeed as much as they fail. This is a common fact that is known to many consultants, trainer, and entrepreneurs. Some statistics even suggest that the failure rate for new startups within the first five years is as high as 50 percent. No wonder some entrepreneurs know and advise that business failure should be handle as a milestone on the road to success. Here is where the issue of learning from one previous mistake is use as an experience that will be used to manage their next idea in a profitable and sustainable business.

Conclusively, are you passionate enough about you idea, passion play a large part in the success of any business. Without passion or with less than enough passion, you will surely find it difficult to work continuously for ten-fourteen-hour a day without any possibility of vacation or leave plus a lot of stress, tension, employee problems or demands, misplaced cash, bank loan turndown as well as frustrations from all angles.

Entrepreneur is a problem solver, so you will have to look into your community, where you live or some other place, considered the problems they are encountering there and see if you could solve the problem, if you think you could then you are an entrepreneur who had just discover a new business idea. 

Before You Walk Away From You Job

Nearly half of the world’s richest people are entrepreneurs, making opening a small business the number one way to get rich and sometimes very rich. Thus, owning one or more businesses that are money spinning is the aspiration of most people in particular when the finicky job that are available are dwindling on a daily bases. The contest for these available few is uptight.

Notwithstanding the situation, as good as being referred to as the ‘Chief Executive Officer’ or ‘Managing Director’ may seem, one need to re-evaluate the thought before leaping into it. Normally, when we think of starting a business what usually come to mind include more money than normally possible as employee, the thought of extra stream of income and extra profit if the business is sold off later can make the blood to run. What motivates others to go into business is the freedom from another master; they dislike the thought of having someone monitoring, supervising and bossing them around. They just do not like interference in their day-to-day decision. They do not want anyone to have power to ‘fire’ them. They have the sense of independence simply put.

They usually have control over long term of their work direction cum opportunity for flexibility in their business policies. Some are in it for the favorable tax treatment, since more allowance against income will reduce the effect of tax on their earnings. The last set of people comes into business because of some government specific incentives. Self esteem and self-actualization is what some people cherished most and no price can be place on it for them. In short, we all like the idea of authorizing our own salary increases, making your own work hours, and choosing the people for who you will work. It is all about more flexible lifestyle and greater freedom.

If these are your view about starting your business then you might need to know that if your startup business fails or liquidate, you might be exposing yourself to more risk than what unemployment or underemployment could ever bring. Have you also considered the simple fact that no one is really his or her own boss? An entrepreneur must answer to many people, including customers, investors, banker, government workers, supplier, employees and other professional experts and organizations. More so, there are no successfully startup businesses that open for short hours, someone has to work extra hours and that person in most cases is the entrepreneur.

New business involves considerable pressure, long hours of work and a great lot of stress. You also need to think and work in other to be able to with meet up with your employees’ payroll weekly or monthly. With great power, they say, come with great responsibility. As entrepreneur, you will be responsible for any final decision you arrive at and their consequences; both negative and positive. You need cash flow to be able to meet your obligations to your creditors such as suppliers, landlords/mortgage holder, insurance companies, and tax agency among others. Whenever there arise adverse conditions such as depressed economic or bitter competition you will be the one that will have to withstand it head-on. Aside from the creditors and customers, you will have to deal with a lot other group like the fire authorities, health authorities; insurance people that will make sure that standards and regulations are met. Wage and hour of work regulation will affect your work, so think about that too. You have to consider many days of loneliness and financial insecurity and the possibility of business failure.

As an entrepreneur, you are the most important employee of your company. Hence, you must be able to access your strong points against your weak points. You must be able to ascertain from the beginning your weakness and work on it. If you know you cannot be referred to as a great salesperson, you have two options; firstly, you can learn and secondly, you could employ an experience or talented marketer. Just capitalized on your strong side for effective performances.

You must note that no startups or even big businesses are too big or small to be immune to failure. The era of too big to fail companies ended with the collapse of Lehman Brothers and others during 2008 financial crisis. Successful startup entrepreneurs have developed culture and principles that reflect unique attitude towards failure. They have repeatedly tried to use the experience they gained from the failed venture in the subsequent businesses that might or might not fail. Israel have a culture that usually tries to repeatedly handle the return failed entrepreneurs back into the system to constructively use their experience to try again, rather than leave them permanently stigmatized and marginalized and it has work effectively for their economy.

You must now weigh the benefits against the challenges and think about how you will handle the circumstances. Another thing is that you should also weight the rate of return on your investment against the rate of return on your investment of your money or rate of return from your employment.