Analysis of the snack food market in India

By on October 28, 2014

The snack food market has developed a lot recently in comparison to the period before 2005. According to the research conducted by the IBIS on the snack food production, it was found that the total revenue generated by the snack manufacturers world wide is $35bn (IBIS world, 2013). At the same time the market of these companies shows an annual growth rate for the year 2009 to 2014 at 3.8%. (IBIS world, 2013). The employment provided by snack food manufacturers is 46,018 in a year (IBIS world, 2013). The growth of snack food manufacturers is at a high risk as the consumers have developed a negative mentality that snack food currently manufacturer are not healthy. Now to be in the market, manufacturers are innovating healthy options that can attract most of their own customers. It has been forecasted that these companies till the end of 2019 will bring some of the choices that contains less calories and low sodium. As far as the revenue generated by these companies is concerned, it is 44.9% of the total revenue generated in the world market.

PEST analysis of a snack food manufacturer

In the current study, one of the biggest snack food manufacturer has been analyzed. Pepsico Inc. is one of the biggest multinational corporations dealing in the snack food and beverages market since 1998 (Mooneser, 2013).Some of the major brands that have been associated with the company are Frito-Lay, Gamesa, Quaker Foods, Sabritas, Latin Americas Foods.

The company is planning for new launches of healthy snack food in India at the initial level and then in China. In the current research, Frito-Lay North America is the focus and is being analyzed with the help of a PEST analysis to understand the product’s feasibility in India.

Political factors

In case of this factor the company focuses on the legislation and regulations associated with the country in which the product is available for launch. Along with this the company also has to focus on the government initiatives that are directly or indirectly related with the product (Mooneser, 2013).

As per the recent position of the market, Frito-Lay has to wait for till the end of the 2014 as the market is revealing some of the major changes in the legislation due to new government processes. The new government of India will change some of the major regulations which will be applicable from the financial year 2015-2016. In the year 2015 the product will get better market condition and favorable market growth.

Economic factors

The company should focus on the high inflation prevailing in the country. High inflation in the market can adversely affect the market position of the new product. Along with this the responses to the competition, the market of the new product get affected (Mooneser, 2013).

As per the new product of Frito-Lay, the market is in bull market and giving new opportunities to the product and accordingly the condition will remain for more 2 years as per the report of IBIS. Therefore launching the product in smaller packs can help the company fight price competition and inflation.

Social factors

The company focuses on the customers’ needs. The company product need to get satisfy taste buds of its customers. At the same time the loyalty of the customer also matters for the company. The loyal customer gives a promotion to the new product entering the market (Mooneser, 2013).

As per the need of the Indian customer, the product carries all the features that suit their eating desire. So in case of social factors, there is positive vibes for the product to enter Indian market. The product in few months will be able to make lots of loyal customers.

Technological factors

In this the company product gets affected with the technological changes adopted by the market. The change in the machinery affects the production of the new product in the market (Mooneser, 2013).

As per the technological changes are concerned, now the Indian market has adapted to digital machinery processes. So it is beneficial for the company to bring the new product in the market.

Legal factors

Legal factors that need to be followed by the company while entering the new market are government laws and regulation and rules and tax policies etc.  Many changes in the law stem from government policy effect the promotion and development of the new product in the new market (Mooneser, 2013).

The company is able to having already some of the products that are sharing the portion of Indian market. So, the company doesn’t have to be afraid of the any form of the legal formalities which can be a hurdle for the new product.

Environmental factors

Today the environment is perhaps the most important external influence on any companies who trying to launch new product in the market. There are awesome facts that human activity is contributing to climate change. Government, consumers and businesses all want to see better environmental management.


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