Zacks Industry Outlook Highlights: Procter & Gamble, Molson Coors Brewing, WhiteWave Foods, United Natural Foods and McCormick
For Immediate Release
Chicago, IL – June 9, 2016 – Today, Zacks Equity Research discusses the Consumer Staples (Part 2), including Procter & Gamble Co. (PG), Molson Coors Brewing Co. (TAP), WhiteWave Foods Company (WWAV), United Natural Foods, Inc. (UNFI) and McCormick & Co., Inc. ( MKC).
Industry: Consumer Staples (Part 2)
Link: https://www.zacks.com/commentary/82584/are-consumer-staples-stocks-poised-for-strong-growth
Consumer staples stocks rebounded in the first quarter, largely reflecting the group’s perceived defensive attributes in an otherwise uncertain global macroeconomic and market backdrop.
Parts of the U.S. economy have actually held up fairly nicely despite the aggregate growth picture remaining sub-par, with GDP growth in the first quarter barely remaining in positive territory. A steadily improving labor market, notwithstanding recent weakness, and gains in wages have helping consumer spending trends. A number of retailers and fast food chains have hiked wages.
As a result, market experts believe the economy is strong enough to face headwinds such as worries stemming from China and other emerging markets and Fed rate uncertainty.
Consumer staples companies typically have tight margins, and a reduction in energy prices over the last two years is helping companies to lower costs. Going forward, consumer staples companies will continue to benefit from decreasing commodity costs and lower energy costs, which will help improve profit margins. The recent weakening of U.S. dollar is also expected to boost profits.
Apart from this, let’s discuss some of the key factors that have been driving consumer staples stocks since the past few quarters, despite global worries and also have the potential to boost earnings in the near term.
OPPORTUNITIES
Innovations
In a crowded and competitive space, consumer product companies need to regularly innovate and upgrade their brands to create differentiated value propositions and to remain successful. In fact, companies with innovative products in their pipeline will be in a position to benefit.
Innovation has been a driving force for consumer product giants like The Procter & Gamble Co. ( PG). P&G believes that consistent product innovation, supported by strong marketing and commercialization, will help deliver stronger results over the long term.
Global brewer Molson Coors Brewing Co. (TAP) has also been launching new products to boost revenues and market share, which help it to offset the impact of declining volumes. Molson Coors also invests in marketing and advertising to create brand awareness.
Transition to Health and Wellness and ‘Good-for-You’ Products
Consumer staples companies are also shifting focus to make healthier and nutritious products in view of increasing health consciousness, rising obesity concerns and growing regulatory pressure.
Natural and organic food/beverages maker The WhiteWave Foods Company (WWAV) and United Natural Foods, Inc. (UNFI) have been benefiting from strong demand for natural/organic food products and expect the trend to continue.
The global leader in spices and seasonings, McCormick & Co., Inc. (MKC), is also reshuffling its portfolio to increase the amount of organic herbs and spices amid the rising demand for organic food products. It now plans to ramp up its organic and non-GMO offerings by 2016.
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PROCTER & GAMBL (PG): Free Stock Analysis Report
MOLSON COORS-B (TAP): Free Stock Analysis Report
WHITEWAVE FOODS (WWAV): Free Stock Analysis Report
UTD NATURAL FDS (UNFI): Free Stock Analysis Report
MCCORMICK & CO (MKC): Free Stock Analysis Report
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