PESTLE analysis of the fast food industry's challenges and opportunities

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PESTLE analysis: Fast food industry

Political

The recent backlash against unhealthy eating could prove to be difficult for the fast food industry. There are calls to limit the marketing of fast food products to children and to limit the sale of fast foods in schools. Given that children are such an important driver of sales, this could curtail the efficacy of many fast food campaigns, particular those with tie-ins to children's films and television shows. Campaigns like Michelle Obama's "Let's Move" campaign underline the importance of healthy eating and eating minimally processed foods. Although President Obama and the First Lady have been photographed eating burgers and they say that they are not against all fast food, the overall emphasis on the administration has been on restricting access to 'junk food' (Michelle Obama loves fast food, 2010, Slashfood).

Social

Although the economic conditions are currently salutary for the fast food industry, the social conditions are less so. Many schools are calling for bans on junk food because of fears of the rising childhood obesity epidemic. A study in the American Journal of Public Health found that even when controlling for the economic status of students, students who attended school near fast food restaurants had a greater risk of being obese than students who did not (David & Carpenter 2009). Proximity fostered a tendency to overindulge.

There has also been a rise in interest in cooking, thanks to the Food Network and other popular culinary shows and books. Consumers are more willing to try new flavors, rather than stick to the traditional offerings of burgers and pizza. In response, fast food chains have been trying to offer healthier options and more innovative products, such as products with Asiago cheese and artisan breads. Quasi-fast food establishments like Panera Bread now offer more 'real foods' to compliment more traditional fast food offerings like sandwiches and Subway has made healthy eating a cornerstone of its marketing campaign, which features 'Jared,' a young man who lost weight eating Subway's diet subs.

Technology

Technology has been a boon to the fast food industry, most notably in the ability of products to be premade and then reheated on-premises. This ensures consistency of the product. For fast food establishments which promise higher quality, however, there must be a balance between speed and taste. Starbucks was forced to shut down and entirely retrain its staff in new procedures for making espresso because the quality of its expensive beverages had gone down and its price structure is not strictly budget-related. It decided to go back to a slower method of making espresso that produced a higher-quality product (Starbucks shuts down 3.5 hours for training, 2008, ABC News).

The ability to order online and have food waiting for you at the restaurant during office hour lunchtimes or to order so food is delivered to your home online has proved popular for many restaurants. Online technology also enables customers to research where their favorite dishes come from, the calories, and ingredients. This may provide some customers with more security about eating fast food and sticking to their diets on one hand. On the other hand, some customers may be dismayed with the calories in their favorite fast food orderings.

Legal

Many fast food restaurants have been fighting regulations demanding that they post known calorie counts on-site, which is intended by the government to encourage customers to make more informed choices. The restaurants fear this might dissuade customers from eating there, although the evidence is mixed if this actually influences customer choices. Links to obesity rates and proximity to schools have raised the call for zoning ordinances to limit where fast food establishments can be located (David & Carpenter 2009). In the past, some schools have allowed fast food to be sold in school or allowed sports sponsorship and using fast food coupons as rewards in the classroom -- a practice now under great criticism and scrutiny. Some communities have tried to ban fast food outlets outright within certain neighborhoods, because of the connection between communities with many fast food restaurants and obesity.

Environmental

Fast food companies have tried to respond to calls that they generate environmental waste by getting rid of Styrofoam packaging (in the case of McDonald's), Fair Trade coffee selections in the case of Starbucks, and virtually every company has a sustainability section on their website. However, meat consumption causes a greater environmental drain upon the planet than a vegetable-based diet, and fast food companies may continue to draw fire for this reason, particularly if they fail to include more vegetarian options.