Environmental Scan
-
Upload
shannon-szabo-pickering -
Category
Documents
-
view
32 -
download
0
Transcript of Environmental Scan
Environmental Scan: Buitoni PizzaBy: Shannon Pickering
An environmental scan indicates that Buitoni Pizza is a product which is well positioned to
capitalize on current demographic and socio-cultural forces taking place in Canada. However,
Buitoni faces threats from regulatory forces, namely a recent recall, as well as from competitive
forces, which it needs to pay close attention to in order to stay relevant in the highly competitive
pizza sector.
Buitoni Pizza is a great example of a food product which reflects the demographic and socio-
cultural forces currently affecting Canadian consumption patterns. The emergence of non-
traditional families is continuing to rise in Canada. There are currently more households without
children then with, and the number of single-person households is on the rise. The only
household type that has decreased in recent years is households with children, which was down
0.5% (Statistics Canada). These trends are reflected in Buitoni’s smaller size and adult appeal.
Its size is smaller than typical frozen pizzas, and it is not large enough to feed a traditional family
on its own. Its size is ideal for feeding one or two people. Its gourmet ingredients and flavours
are appealing to adults, reflecting families with fewer children, as well as an aging population.
An increasingly busy lifestyle, an increased focus on health and an increased demand for better
quality food are all socio-cultural forces which Buitoni Pizza is well positioned to capitalize on.
As dual-income households continue to increase, Canadian consumers are increasingly
demanding fast, convenient pre-prepared meals. However, consumers are also demanding higher
quality, healthier food products. Butoni is a product which can satisfy all of these demands. Its
quality ingredients and unique topping combinations portray Buitoni as a high quality, gourmet
meal, which as a frozen food product is also fast and convenient. Its small size also makes it an
ideal choice as a snack or a meal on the go. Furthermore, Buitoni is a comparatively healthy
frozen pizza option, allowing busy yet health-conscious consumers to not have to compromise on
health, taste or convenience.
Regulatory forces have recently been a cause of concern for Buitoni. The biggest threat Buitoni
currently faces is a voluntary recall issued by Nestle on December 11, 2012, which involved five
Shannon Pickering
of Buitoni’s pizza varieties. As a result of pizzas being found to contain metal pieces in
Germany, both the Canadian Food Inspection Agency (CFIA) and Nestle issued a health hazard
warning. The Canadian food Inspection Agency protects Canadians from food hazards. It takes
swift action on complaints, and closely monitors the effectiveness of recalls. Although most
food recalls are initiated by the company involved, the CFIA can initiate a mandatory recall if a
company fails to comply. The complaints from Germany were enough to warrant a recall of
Buitoni products that may be considered harmful. Nestle, like any other food company needs to
comply with CFIA regulations. It was in their best interest from a public relations standpoint to
voluntarily recall these products, rather than having a mandatory recall issued by the CIFA.
The recall has since dominated Buitoni’s internet presence, with numerous articles being written
about it and these articles coming up as top search engine results for Buitoni. The prevalence of
internet use in Canada is a technological and socio-cultural force which cannot be ignored. With
many Canadians using the internet to obtain information, Buitoni needs to take action to ensure
the media coverage of the recall does not permanently tarnish its reputation.
Buitoni faces strong competitive forces from numerous direct and indirect competitors, the
strongest of which are other companies offering pizza products. Pizza as a whole is a highly
competitive sector in the food industry, and Buitoni faces increasing competition in the frozen
thin crust pizza sector. Many brands are offering smaller, gourmet thin crust pizzas similar to
Buitoni. Store brands such as Our Finest by Wal-Mart, as well as very well-known brands such
as McCains are now offering frozen thin crust pizza. These pizzas are often larger and less
expensive than Buitoni, with the least expensive pizza being offered by Donatello which sells for
$3.00 for 755 grams. In order to stay competitive, Buitoni must remain sensitive to the lower
prices being offered for very similar products, as well as the improved quality and growing
number of frozen thin crust pizzas being offered to consumers.
Buitoni also faces indirect competition from restaurants offering pizza. Many restaurants are also
capitalizing on the consumer desire for healthy, high quality thin crust pizza. Both Pizza Pizza
and Pizza Hut offer health-check certified pizzas, which are verified to be healthy choices by the
Heart and Stroke Foundation. They are offered in flavours such as Chicken Rustica at Pizza
Pizza and Margherita at Pizza Hut. Restaurant pizza already has a competitive advantage in that
it is generally considered to be of higher-quality then frozen pizzas. Furthermore, an improving
Shannon Pickering
economy may give restaurants even more of a competitive edge. On average, Canadian
households reported spending $7,795 on food in 2011, down 0.4% from 2010. Spending on food
purchased from stores fell 1.8% to $5,588 on average, while spending on food purchased from
restaurants rose 3.6% to $2,207 (Statistics Canada). As the economy improves, people may
continue to choose restaurants as a means of convenience, rather than purchasing frozen prepared
meals. Aside from the pizza industry, Buitoni must also closely monitor competitive forces from
other indirect competitors including other frozen food products and the food industry as a whole.
Shannon Pickering