Macro Environment Assessment

that “Typical middle-class families will see bigger paychecks”” (Welker, 2018). If middle- class families are getting bigger paychecks, then the money is going to be more evenly distributed throughout the country, which could possibly lead to more available income for goods that Conagra Brands packages. This is important because Conagra will be able to benefit from the tax reforms, meanwhile other businesses might not be able to, giving Conagra an upper hand.
Technological Forces : Exhibit B
“Technology is a driving force of innovation today, challenging even the most established companies to modernize and reimagine how they stay relevant” (Agrawal, 2016). The rise in usage of technology in today’s society is greatly impacting many business industries across the globe, as will be discussed below.
The Rising Relevance of Cloning Foods:
The emergence of cloning technology can and will largely impact the way that our company does business (see exhibit B, section 2). At Conagra Brands, we supply to many food brands that use types of produce that can now be cloned. For example, we supply to ‘Healthy Choice’, which is a company that sells frozen meals that often include meat, which is becoming a popular cloning option; “Clones allow farmers to upgrade the overall quality of their herds by providing more copies of the best animals in the herd” (FDA, 2018). This cloning method could be used in our company to help create a larger, finer supply to our customers, by ensuring that the highest quality animals are used to create these meals and other products that we manufacture and distribute. With news that cloned products have been deemed safe for consumption, this method of production is gaining popularity and could prove to be very practical for our company.
Increase in Satellites and Precision Farming:
Precision and satellite farming entails using GPS and satellite readings in order to help benefit the lives and yields of crops (Livingston, 2018). For example, “Geographical Information System (GIS) maps that show where the soil in your field is moist, where the soil eroded over the winter, and where there are factors within the soil that limit crop growth” (Herring, 2001). This advanced technology will allow farmers to better predict the conditions in and around their plots. The benefit of this to a company like Conagra is that, if there is an increase in supply due to these innovative resources, it would result in a decrease in price of the produce that we use to manufacture goods. This would cut back costs, as well as allow us to provide more to our partnered brands.
Adaptation to Minimal Fertile Land:
Changing technology has found its way around the issues surrounding land lacking proper nutrients needed to grow produce. Hydroponic farming is a form of growth that “is growing in popularity because food can be grown without soil…” (Gilpin, 2014). Rather than soil, hydroponics uses nutrient rich water, which allows for this kind of farming to be used anywhere, including underground. It has been said that “some crops can grow twice as fast in hydroponics due to getting exactly the correct amount of nutrients, water, and oxygen”, and that “no herbicide or pesticide chemicals” need to be used (HydroponicMicroFarms, 2012). The efficiency of this process would allow Conagra to get ahold of more raw materials at a quicker pace, thus, leading to more output. Finally, buying these raw materials that do not use herbicides or pesticides would bode very well for our company’s reputation, as it is healthier for our many consumers.
Increase in GMOs:
Genetically Modified Organisms are those who have had their DNA altered (see exhibit B, section 1), (Lallanilla, 2016). It is said that “GM [is] the fastest adopted crop technology worldwide in recent times” (Norero, 2018). With GM crops “grown over 160 million hectares in 29 countries” (Anilakumar and Bawa, 2012), they have “increased global production by 357.7 million tons of corn, 180.3 million tons of soybean,” and more (Norero, 2018). Many of Conagra’s products include corn, soy, and many other raw goods that can be impacted by GMOs. GM crops can reduce the use of land used in the growing process due to the increase in productivity and yields (Norero, 2018). The increase in efficiency plays a role in our company, as explained (see ‘Adaptation to Minimal Fertile Land), as well as the fact that you can inject nutrients into GM foods, which will be more appealing to our buyers and consumers.
Political / Legal Forces : Exhibit C
Political and legal forces shape an industry, but make sure that products are safe for consumption. Laws protect both the company and the consumer. When operating a company one must always be mindful of the rules and regulations surrounding their products. This can be anything from new FDA requirements to lawsuits about packaging or ingredients. Conagra must be mindful of the rules, or they can subject themselves to legal action or fines.
NAFTA:
The possibility of the NAFTA deal falling through would greatly affect Conagra as a company as taxes on goods crossing the borders would add huge expenses. With the massive amount of international trade in the food industry, a total of $19 billion worth of food crossing the Canada-US border in 2017 (Yougali, 2017), this trade would slow greatly if NAFTA negotiations fell through. Conagra, operating in North America will have to make adjustments to the production and sale of their products, such as change in suppliers and adjustment is product prices to account for the raises in taxes.

Taxation:
Taxation affects every industry. The general rule is that taxes have an inverse relationship with money that is invested, as well as wages. CNBC released an article that showed what several S&P 500 companies did for their employees following a tax reform bill passed in the United states (Imbert, Wells, Zhao, 2018). The tax reform influenced a variety of companies across many industries, and any large corporation is heavily influenced by tax cuts, especially Consumer Packaged Foods, because there is several large corporations in this industry.
Tariffs:
The recent tariffs put in place by U.S. President Donald Trump sent shockwaves throughout a variety of industries. Consumer Packaged Goods was not spared. Molson Coors, Coca-Cola, and Campbells raised their prices to combat the 10% aluminum tariff (Deschamps, 2010), which causes people to be less likely to buy their products, eating into the profits of these corporations.
Minimum Wage:
The Canadian Centre of Economic Analysis found in the two years after the wage hike businesses will spend 23 billion extra dollars paying wages (Sagan, 2017), which affects not only the Consumer Packaged Foods industry, but the suppliers and buyers of this industry. Farms that supply the raw materials for this industry might not be able to hire as much help and have to downsize, as well as the supermarkets who employed many people at minimum wage will also be affected, causing the supermarkets to try and get product at a lower price from this industry, or charge people more money for these products, causing less people to buy them, and ultimately resulting in less product sold by the Consumer Packaged Foods industry and lost jobs.
Social Forces: Exhibit D
Social and cultural trends greatly impact the Consumer Packaged Goods industry, as consumers’ preferences in food dictate what we, as a supplier, produce. Trends in lifestyle choices, such as diets, determine what kind of food is produced. Demographics also tie into this as the size of the group that participates in a particular lifestyle dictates whether it is profitable to produce goods of their preference and how much of the factors of production should be allocated to produce those goods.
A Rise In Demand for Organic Products:
Over the last ten to fifteen years the popularity of organic foods has risen consistently. In 2016, the market for organic produce was valued at $110.25bn and in just four more years it is estimated to reach $265.85bn. An increase of $155.60bn in 6 years (PMA Research, 2017). This kind of growth requires attention from Conagra Brands. Allocating resources to the production of organic CPG products could mean a significant increase in revenue for Conagra. If demand for organic goods continues to increase, it could potentially require that Conagra puts more focus towards producing organic goods, so that they may fulfill what consumers want.
Lifestyle choices (veganism):
Currently, a significant growth of the vegan diet has been consistently growing over the last few years. We are seeing a significant annual decrease of dairy milk products while plant based milk beverages keep rising. In ten years, from 2006 to 2016, the amount of vegans has more than tripled (Singer, 2018). Restaurants now have more and more vegan friendly options. Lifestyle trends have a large impact on the CPG industry because depending on the lifestyle some goods that Conagra produces may become obsolete and some may become very popular. It is important to analyze and follow lifestyle trends of consumers to be as profitable as possible. Like the rise in demand for organic products, lifestyle trends like veganism or other diets are important to track as they continue to grow because they can turn out to be very profitable opportunities.
Behavioral social influences (sustainability, ethical responsibility):
Consumer behaviour is shifting. Recently consumers have been becoming more aware of where their food is coming from and how it is made. A focus on sustainability and ethical sourcing has been evident as the demand for “fair trade” products has been growing. According to Dr. Megan Meyer of the International Food Information Council (IFIC) Foundation, 75% of millennials say it is important to them to know that their food is produced in a sustainable way and 43% are willing to pay more money for a product that is made sustainably. For Conagra this could mean an improved brand image as well as higher revenues associated with higher priced goods if we would advertise our products as sustainable and ethical.
Immigration/Demographics:
As mentioned before consumers have a huge say in what is produced. What Conagra produces vastly depends on consumers’ tastes and preferences. Depending on where the consumers are from, their tastes and preferences in food will be very different. Similarly, the age majority of the population is important because as mentioned in factor #3, millenials, for example, prefer sustainably produced goods. Also younger people (<50) tend to be more health conscious than previous generations as the trend in health foods is increasing. Knowing the age majority, not only of a country, but communities surrounding a grocery store is important to know as the goods supplied may be better suited for that area.