August 28, 2020
There’s an old investing adage, “Buy what you know.” While that’s good and sound advice, we decided to take it one step further – and recommend you buy what you love. Many consumers hold certain brands near-and-dear to their hearts, so why not do a little homework and look at some of the stocks behind the consumer products you have enjoyed for years?
Whether it’s the barbecue sauce that Grandpa slathered on pork ribs during his backyard grilling years ago or a cereal you enjoyed as a child or a particular confection that made your home the most popular during Halloween, buying what you love is a great way to approach the stock market and connect with the companies behind the brands you enjoy as a consumer. In this ongoing series, we take a look at consumer products you walk past regularly in the supermarket aisle and the companies that bring them to you, starting with condiments.
While consumers may just add a little ketchup or mustard on a burger or hot dog, it is big business. The global sauces, dressings and condiments market will reach $173.36 billion by 2025, according to Hexa Research, a market research and consulting organization. Condiment is a broad term that includes table sauces and dressings, dips, cooking sauces, paste and purees, as well as pickled products.
The good news for these companies is that with a greater number of people working from home than ever comes an increased demand for condiments as parents and other consumers look for quick and easy to make lunches for the home-based family. So, next time you browse the brands lining the aisle, consider investing in some of the publicly traded companies behind your favorite condiments:
ConAgra Food Inc. (Tii:CAG)
One of the industry leaders in this space, odds are you can’t pass the condiment aisle without finding one of the many brands under the Chicago-based ConAgra Food umbrella. From Blue Bonnet and Parkay margarine, Fleischmann’s spreads, Log Cabin and Mrs. Butterworth's syrups, the La Choy line of soy sauces, Hunt’s Tomato Ketchup, Peter Pan peanut butter, Vlasic Pickles and Wish-Bone salad dressings, if it’s a spread, topping or sauce, ConAgra provides it.
The Clorox Company (Tii:CLX)
This may come as a bit of a surprise, but Clorox Co. is one of the leading providers of condiments. Back in 1972, the company best known for its line of bleaches and cleansers acquired a little-known provider of sandwich spreads and condiments named Hidden Valley. Developed in the late 1950s by actual ranchers Steve and Gayle Henson, Hidden Valley is now a top brand when it comes to salad dressings, dips, and toppings.
Unilever Group (Tii:UL)
The British-Dutch multinational consumer goods company has several household mayonnaises, specialty sauces and ketchup brands in its portfolio. In the condiment aisle, you’re guaranteed to spot one – Hellmann’s Mayonnaise. A staple in American kitchens, Hellmann’s boasts to providing the best-selling mayonnaise in the country, offering not only its traditional mayo but also low-fat, cholesterol-free as well as varieties flavored with avocado, olive and sunflower oil.
The J.M. Smucker Company (Tii:SJM)
With more than 40 brands in its lineup, Smucker has a commanding presence in the condiment aisle beyond its trademark jellies, jams and preserves. Recognizing that nothing goes better with fruit spreads than peanut butter, Smucker produces nut-based spreads through its Jif, Adams, Laura Scudder’s and Santa Cruz lines of peanut and almond butter spreads. These brands are doing well for the parent company, which reported that net sales increased 10 percent for its fiscal fourth quarter on increased consumer demand resulting from the COVID-19 pandemic.
The Kraft Heinz Company (Tii:KHC)
The world’s fifth-largest food and beverage company in the world has a broad range of condiments beyond ketchup. Grey Poupon mustard, A1 Steak Sauce, Claussen pickles, Cool Whip, Jack Daniel’s and Kraft barbecue sauces and salad dressings, and Miracle Whip are all mainstays in American supermarkets. Demonstrating the resiliency of these strong brands even during global economic uncertainty, Kraft Heinz reported net sales growth of 3.8 percent for the fiscal second quarter ending June 27.
McCormick & Co., Inc. (Tii:MKC)
The eat-at-home trend is good news for McCormick & Co. shareholders. The company behind French’s Yellow Mustard, Cattlemen’s BBQ Sauce and Frank’s RedHot reported adjusted earnings per share rose 27 percent for its fiscal second quarter ended May 31, 2020, on an 8 percent rise in sales. Lawrence E. Kurzius, Chairman, President and CEO of the global food company with more than $5 billion in annual sales, directly attributed the strong performance to more consumers preparing food at home.
This is just one of the supermarket's many aisles. Stay tuned as we share the public companies behind the brands you love throughout the entire store so you can own the brands you love.
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