Frooti PESTLE Analysis

Published in Companies category by MBA Skool Team

Here is a detailed PESTLE analysis of Frooti which examines political, economic, social, technological, legal & environmental factors.

Political Factors:

The political factors in the Frooti PESTLE Analysis can be explained as follows:

Frooti is the biggest selling mango flavored drink which originated in India. It exports to multiple countries including the United States, Canada, Singapore, Japan etc. Hence, the varied political factors like government policies and legislations etc. in different countries influence its operating business accordingly. For e.g. The food and beverages regulatory authority in India which is FSSAI (Food Safety and Standards Authority of India) has changed its certain norms which are in favour of beverage industry as a whole. It has eased the minimum solid soluble percentage in fruit nectars, carbonated fruit beverages and other fruit drinks. This is going to be an advantage for Frooti as many consumers today demand less sugar content in their non-alcoholic drinks and beverages. The taxes and duties related to import and export also play a huge role.

Even the production and distribution policies can impact the strategies and its business model significantly. The FSSAI also issued an amendment to bifurcate carbonated beverages with fruit juice and only fruit drink will really help the brand to strengthen its position and capture more market share. As Frooti was the market leader to start with Tetra Pak packages back in 1985. It has the first mover advantage in Indian market and stands tall with its PET and TCA tetra pack. As compared to its competitive brands like Slice and Maaza, the brand still holds a large chunk of market share with good consumer choice and likeability till date. It needs to work on its competitive strategy and then align its marketing mix accordingly. As in India, the Government is bringing new laws related to quality, health and wellbeing, this company can leverage this opportunity to increase its sales and profitability.

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Economic Factors:

Below are the economic factors in the PESTLE Analysis of Frooti:

During the recent COVID-19 pandemic lockdown, the sale of longer shelf-life beverages like that of Frooti got impacted tremendously. As consumer spending got decreased and consumption worsened in many parts of India, the brand as one of the most famous fruit drink brands suffered a lot.

With supply chains getting hampered and many distribution channels like retail stores and markets, restaurants being shut down, the consumption and sale decreased. A number of economic factors such as rising inflation, demand and supply, imposed taxes and duties and fluctuations in raw materials availability, pricing affects the business strategy and operating model. Even due to COVID-19, the layoffs and unemployment got triggered, in both organized and unorganized sectors. This led to decreased disposable income at consumers end and they spent less on non-essential items like beverages. But with the situation coming into control now and restaurants, commercial places getting opened once again, the consumers are again focusing on more consumption. This is an opportunity for Frooti having high consumer appeal to position and market itself accordingly. It can increase its share over different segments like carbonated drinks with its high fruit juice content.

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Social Factors:

Following are the social factors impacting Frooti PESTLE Analysis:

There are a lot of social factors which play a huge role in consumers eating and drinking choices. Factors such as lifestyle, employment, education level, status, culture and the community impact the consumer choices and decision-making process. Even the demographic factors such as age, gender, location and income status have a major role in consumer buying decisions. Youngsters have an inclination towards beverages along with food in college campuses, canteens restaurants, during travelling and in many more instances. People have preference for easier to go laced with convenient packing and healthy products with less sugar content. Frooti because of its fresh mango juice content with no aerated content stands an opportunity in this target market. With the rising culture of dining out and urbanization, this brand has a huge potential to focus on its competitive strategies. It can even tap the untapped markets with variations in its product offerings to bring the unique value proposition to its consumers. All these factors can help the brand to increase its sales revenue and market share.

Technological Factors:

The technological factors in the PESTLE Analysis of Frooti are mentioned below:

With rising technological innovations in product design, packaging, promotional channels, the beverage industry is evolving in itself. People nowadays are looking for convenience shopping, freshness in products and home delivery options. Technology is helping in fulfilling this consumer demand and need as per se. As sales and distribution channels are increasing and making a shift to E-commerce platforms like Big basket, Gofers, Flipkart etc. The company is increasing its sales revenue through this channel as well apart from Brick-and-Mortar stores. Apart from this, a lot of technological innovations are happening in the beverage industry for making its operations seamless and efficient. Voice technology, Internet of Things (IOT), flow through sortation, Cloud services are some of the rising technologies and standards for Frooti to look up to in the industry.

With the rising internet penetration among consumers, this brand can leverage the online digital marketing for boosting its sales and other operations.

Following are the legal factors in the Frooti PESTLE Analysis:

The beverage industry is regulated and controlled by several laws in India. FSSAI is the authority which governs many aspects like licensing, packaging, labeling and other necessary permits. All legal factors which include health and safety laws, environment laws, consumer protection laws etc. must be taken into consideration while formulating strategies. Frooti needs to take care of waste management laws as well in all countries and abide it legally. This brand should be careful of adulteration in its product offering as consumers loyalty and brand equity depends on it. As this brand follows all legal factors present in any country or even state, it stands a very good opportunity to position itself strongly in the market. It can avoid any legal punishments, lawsuits or penalties as well which can save its resources and increase its sales.

Environmental Factors:

In the Frooti PESTLE Analysis, the environmental elements affecting its business are as below:

The environmental factors such as usage of plastic packaging, other non-biodegradable raw materials used in the processes impacts the operating business of Frooti. The brand is required to bring down its negative impact on the environment and cut emissions. It should comply with all related environmental regulations and successfully run its operations. This brand should take this as an opportunity to innovate more environment friendly packaging.

A number of waste management and protection laws exist in the industry which the brand needs to consider in its strategy making process. As awareness about environment protection among people is on rise, it becomes important for this brand to work in this direction. This can increase its customer base and even brand equity leading up to higher sales and profits.

To conclude, the above Frooti PESTLE Analysis highlights the various elements which impact its business performance. This understanding helps to evaluate the criticality of external business factors for any brand.

This article has been researched & authored by the Content & Research Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

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