1J·

Not hungry, or what?

I have noticed that shares in food manufacturers are somehow not in demand at all at the moment. Why is that? Consumer staples and food should actually offer a certain degree of resilience in turbulent times, as people always eat regardless of economic growth and the economy. So why is this sector just bobbing around like this?

Here are a few examples:

$ULVR (-0,93 %) Unilever, YTD = -9.1% , P/E=18.3, Divi = 4%

$NESN (+1,1 %) Nestle, YTD = + 2.4%, P/E=22.4, Divi = 4%

$HRL (-1,34 %) Hormel Foods, YTD = -11% , P/E=23.3 , Divi = 5.7%

$GIS (-3,22 %) General Mills, YTD = -21.8%, P/E=8.6 , Divi = 6.8%

$KHC (+0,9 %) Kraft Heinz, YTD = -3.1% , P/E=negative , Divi = 6.8%

$FLO (+0 %) Flowers Foods, YTD = -20% , P/E=21.81 , Divi = 11.5%

$NOMD (-6,69 %) Normad Foods, YTD = -17.2% , P/E=9.8 , Divi = 6.8%

$TBS (-1,96 %) Tiger Brands, YTD = -20% , P/E=12 , Divi = 11.4%

I understand that many branded companies are coming under increasing pressure from the discounters' own brands when the economy is bad, but is that really the whole truth?

(Illustration generated with lovart.ai, modified in Photoshop)

14 Commentaires

CRDonkey@DonkeyInvestor

In turbulent times, you grow your own food or steal it from your neighbor 👍

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NichtRelevant@NichtRelevant

@DonkeyInvestor The latter is the maximum return on investment! 😅

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user03@user03

@DonkeyInvestor Inflationsausgleich 🤝

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stayhydrated01@stayhydrated01

Personally, I think that the cheaper alternatives/own brands play a big part in this. All the manufacturers of basic consumer goods earn their money from the broad masses of people, not from a few high earners who don't mind expensive prices. When I look around at my circle of acquaintances (all normal earners who can make ends meet), I see that for years people have been increasingly avoiding expensive brands of food/household products and instead opting for the cheaper alternative (which in 95% of cases tastes the same/can do the same). We have been living in difficult economic times for years (at least for the general population and not just in Germany) and my impression is that people would rather save on food (or expensive brands) than go without a vacation, a new iPhone or a new bag (which is understandable for me). At the same time, the range of private labels (at least in Germany) has become bigger and better over the last decade.

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NichtRelevant@NichtRelevant

@stayhydrated01 I totally agree with you - I also think that's the main reason. I'm just surprised that the share prices of these companies are being hit so hard. Often, the discounters' cheap products are also manufactured by the same producers as the brands (so sales don't go to zero) - but it's estimated that an extremely high margin is lost, which would otherwise be achieved with the "brands".

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BeachPlease@BeachPlease

After these defense, crypto, gold, silver, lithium, AI, chip, energy, Japan and oil rallies, are you surprised that consumer staples are not performing?
What major investor is parking cash in Coca Cola when he could be earning big returns in Japan? A little tip: Who starts with B and ends with uffet doesn't do that :)

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TomTurboInvest@TomTurboInvest

@BeachPlease I am also of the opinion that this has less to do with the product portfolio, own brands vs. branded products etc., but that the capital is simply being invested elsewhere due to hype in other areas, where there is currently more to be gained, and that is what investing is all about.
The customers of major investors also expect to be part of these hypes.

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user03@user03

So Coke is actually doing quite well

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Thoranos@Thoranos

They cannot pass on the increased prices to consumers so easily.

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Chris@Psychedelic_Sunflower

I don't see the point in buying the expensive branded product for many foods if it is no better than the discount version. I'm sure many people will think that way and it puts pressure on margins.

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NichtRelevant@NichtRelevant

@Psychedelic_Sunflower I also buy a lot of discount goods for exactly the same reason. Especially as the price gap between discount products and "brands" seems to have widened even further recently.

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Rügen W.@SSIT

One look at the product portfolio of the companies mentioned here is enough and it is no longer so surprising that these companies are just bobbing around. 😄

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NichtRelevant@NichtRelevant

@SSIT The "brands" are, of course, usually highly processed foods. They are not really suitable for a healthy diet.

But manufacturers of less highly processed foods are also apparently struggling at the moment - e.g. $CALM (Cal-Maine Foods) or $MOWI (Mowi).

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Novius@Novius

18H

... the times are coming back. Good opportunities to invest and collect dividend stocks more cheaply

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