Entrepreneurship in Food and Beverage Industry

Question: Discuss about the Entrepreneurship in Food and Beverage Industry. Answer: Introduction Food and beverage industry is known as a complicated, worldwide collective of diverse businesses that supply most of the food consumed by the world population. The morn food and beverage industry includes agriculture, food dispensation, manufacturing (farm machinery, agricultural construction, seed and supplies), marketing, food service, wholesale and distribution, regulation, education, research and development, financial services and advertising. Agriculture is known as the method of producing food, feeding products and other required products by the cultivation of specific plants and the raising of domesticated animals (Chittithaworn et al., 2011). In the method of food processing, raw ingredients are transformed into food people. Several types of food production methods are one off production, batch production, and mass production and just in time production. From the time of World War II, agriculture in the United States of America and in the entire world, food system is charact erized by models that mostly focus on monetary profitability at the expense of social and environmental integrity. However, recently the conventional characteristics of food industry have changed a lot (Jolink Niesten, 2015). Companies are now focusing on human health and environment safety while manufacturing foods. A rapid change is experienced in this industry which is making it difficult for entrepreneurs to start a new venture. Challenges in Entrepreneurship in Food and Beverage Industry Establishing vision and business idea Establishing a business idea is the first challenge faced by the entrepreneurs in food and beverage industry when starting from scratch. In this industry it is quite a difficult task to find out proper business opportunity and creatively establishing an idea (Serafimova Angelkova, 2013). The first true task of an entrepreneur is to envisioning the idea. An entrepreneur must be able to see things that others cannot see. In food and beverage industry, consumer trends and demands are changing so fast that it quite challenging for the entrepreneurs to fix a particular vision for his organization. Business location Another major challenge faced by the entrepreneurs in food and beverage industry is related to the location of the business (Liang, 2014). Food and beverage companies entirely depend on the consumers living around. Therefore, it is important that they select a location where demand for food and beverage is high. Identifying such an area is a difficult task for the entrepreneurs. Qualified employees Most managers of an organization think that finding good employees is an easy task. Actually it is an easy task if labor supply is high and if other organizations in the same industry are not delivering satisfied wages and other benefits (Bridge O'Neill, 2012). However, in todays business context, most of the food and beverage companies are offering not only satisfying wages but also offering number of benefits such as incentives, bonuses payments, healthcare services and flexible working hours. Therefore, it is quite tough to attract experienced employees from other organizations. Loyal consumers This another critical challenge for the entrepreneurs while opening a new venture in food and beverage industry. In any business there are good consumers and bad consumers. Good consumers who will stay loyal with the organization and will forgive the company if any mistake is committed are hard to find in food and beverage industry. In this industry, consumers choose based on the taste of the foods, price and ambience (Schaper et al., 2014). They will never hesitate to change a restaurant if any other restaurant is offering the same food at a lower price. Extreme competition Competition in the food and beverage industry is the next challenge that entrepreneurs face while staring a new venture. Most individuals see competition as a plague; however, without competition there would be no innovation in any industry. In food and beverage industry competition is enormous (Karlan Valdivia, 2011). Famous food chains such as PizzaHut, Dominoz, Burger King and KFC are continuously introducing new products to allure consumers. In this scenario, it will be difficult for an entrepreneur to start a new venture and attract consumers. Industrial changes and trends Change in trends is a challenge than an entrepreneur must be prepared for when starting a new venture. Rapid changes in industrial trend and consumer trend have wiped out a lot of businesses (George Bock 2011). One such big example is Dot com trend; a number of industrial based organizations were wiped out by new web based dot com companies. In food and beverage industries, consumers trends change almost daily. Currently the consumers are shifting towards healthier foods. That is why; food and beverage companies are focusing on providing healthier foods. It is possible that in future this trend will change. When a trend changes, companies will higher revenue will be able to consume the shock (Khan et al., 2013). New ventures will not be able to restructure entire business to meet the new consumer and industrial trends. Entrepreneurship activities in Food and Beverage Industry In food and beverage industry, entrepreneurs are increasingly keen to change the way consumers eat. In the year of 2015, consumers have experienced the rise of Sourdough. More quirky cafes are popping up every day and the chances to rent a chef to cook are becoming common (Barringer, 2012). A number innovative stat ups are also seen in the food and beverage industry. By the end of 2014, food and beverage industry of UK was worth 103 billion. It developed new job opportunities and introduced several new products in the market. OLIO is another start up in food and beverage industry where the organization has launched a free smart phone app that allows people of London to get their hands on excess food items (Baregheh et al., 2012). Unlike other business apps, this app also helps the users to connect to local businesses. On the other hand, another trend can be seen in food and beverage entrepreneurship which is to provide health food and drinks items. These new business are using innovative concepts, fresh and healthy ingredients, fun branding and convincing messaging such as guilt-free snacking and low calorie indulgence along with ethical conscience. Until now, not much of healthy food and drink businesses has achieved success (Koellinger Roy, 2012) However, now the trend is different. Companies such as Innocent Drinks, Ellas Kitchen and Vita CoCo are gaining tremendous success. That is why, if an entrepreneur wants to open a new business in food and beverage industry, it I the best time to do that. Factors that influence of the probability of new venture success Start up venture always depends on various critical factors, which are influential for the accomplishment of success. In this context, the smooth availability of these factors are highly encouraging for creating new fast food ventures. These factors are described below: Infra-structural facilities: The external environment is highly imperative for the success of any fast food business venture. In this context, the infrastructural facilities play a significant role in encouraging the entrepreneurs for starting new fast food ventures (Hatten, 2015). The smooth operation of infrastructural facilities enables the entrepreneurs to avail communication facilities, transport, water connection, electricity, raw material, latest technology as well as industrial site. These particular elements are considered as the pillar of the fast food business operation. Therefore, the enhanced availability of these crucial fast food business elements would naturally encourage the entrepreneurs to start up new venture. In addition to that, the fast food business operation is also needed various licenses, which cannot be achieved in less developed infrastructural facilities. Economic climate: The level of entrepreneurial opportunity is considered as the major influencer for starting up new venture. Therefore, suitable economic climate is one of the most important factors for starting up a specific new venture. A suitable economic climate includes consumer demand, finance availability, economic condition as well as competitions. In addition to that, the competition is also crucial factor, as greater competition would naturally discourage any entrepreneur to start up new fast food business venture (Onetti et al., 2012). The greater numbers of fast food business venture is also immensely depended on the availability of finance. Therefore, sluggish economy would drive back the fast food business start ups, as the banking system would not be able to support a start up fast food business. Training and Guidance facilities: The facilities of training and guidance are also quite essential for starting up new fast food business ventures. Excellent training and guidance facilities are quite capable to offer enhanced access to entrepreneurial training programs as well as greater availability of consultancy facilities (McKenzie Woodruff, 2013). Without the availability of training programs and guiding facilities the entrepreneurs face critical dilemma at the time of starting production. In addition to that, without the proper guidance systems the new fast food business organizations experience critical dilemmas to manage the regulatory policies at various stages of fast food business operation. As the market factors are significantly dynamic, the new fast food business organizations are highly depended on training and guidance facilities. State Regulation: The opportunity for successful fast food business operation highly depends on the state regulations. These state regulations can therefore significantly encourage the entrepreneurs to start up new fast food business (Koellinger Roy, 2012). The success of starting up process in new business is greatly depended on the level of bureaucratic cooperation, governmental economic restrictions, foreign exchange availability as well as import and export policies. Majority of the governments in the world is focused on rapid economic development, therefore offers a favorable business environment for the entrepreneurs. These favorable business environments help the organization to attain cooperation from the bureaucratic departments. At the same time, the economic restrictions are also elevated from the new start up of fast food business. Hence, it can be easily understood that the state regulations has the capability to encourage greater numbers of fast food business start up ventures. Conclusion There is multitude of challenges are present in the market for the entrepreneurs in the context of starting up new business ventures. Despite of these challenges, the entrepreneurs has the most favorable opportunity to start up new business in the food and beverage industry. The growing popularity of the health food has created a greater opportunity for the entrepreneurs. Moreover, the less cost of production would be also vital factor making this line of business immensely profitable. The discussion has also helped to identify the major factors that would be crucial for starting up new fast food business ventures. 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