Latest news with #packagedfood
Forbes
3 days ago
- Business
- Forbes
Stock Market: Companies Are Struggling With Inflation-Driven Consumers
Inflation has altered consumers' buying habits Year-to-year inflation may look low, but prices continue to compound upwards. For example, "Food at home" pricing, accounting for 8% of the total CPI basket, was up 1.8% in 2024. That seemingly low inflation rate nevertheless pushed up the Covid period price inflation to 27.6%, and that is what consumers are contending with. So, why is that a problem for companies? Because consumers' actions to reduce the inflationary effects can adversely affect business revenues and profits. Grocery shopping is a good example. Here are examples of what consumers can do: These actions not only affect the grocery stores, but also affect the companies that produce packaged food. The effect is measured by 'volume/mix' changes caused by consumers' altered decisions. In last year's 2023 annual reporting, Kraft's management anticipated 2024 growth from rises in both sales and prices. However, consumers tripped up the company's strategies and expectations. From the 2024 Annual Report: Note the higher pricing was well below the 2024 CPI inflation rate of almost 3%. So, how did Wall Street view Kraft's 2024 results and plans? Not well. Below is the stock's performance for the Covid-period. Note that the company (and others like it) was able to produce inflation-beating results early, but then the consumer actions began to hit, causing a reversal of the previous gains. With the consumer shifts continuing to hit results in 2025, the stock has now fallen below the cumulative inflation, making the Covid-period "real" (inflation-adjusted) stock performance negative. Kraft Heinz Covid-period stock performance (including dividends) now below cumulative CPI While the Federal Reserve focuses on the latest 12-month change in prices, it is the cumulative inflation damage that consumers focus on. After all, a "good" 12-month inflation change of 'only' 3% nevertheless compounds high prices even higher. The Covid-period rise is now about 23%. That level of inflation continues to cause damage, particularly in this period of high uncertainty (see "Uncertainties Are Churning U.S. Stock Market Outlooks" for explanation of why uncertainty can be more troublesome than risk). Here are the S&P 500's nine companies in the sector/industry combination of the normally safe consumer defensive/ packaged foods. They all got an inflation boost early but are now struggling with both higher costs and changing consumer buying actions. The weak and negative "real" (inflation-adjusted) total returns for the Covid period show Wall Street's bearish views of the situation and the outlook. Double-digit negative real performance shows inflation's continuing problems In the early 1970s when inflation was a similar concern, I read an interview with a wealthy individual. He made a surprising statement, saying he would happily give up half his wealth if the other half was guaranteed to retain its value. Why was he willing to make such a large payout? Because inflation has a potentially destructive power that can become self-sustaining, even as economic, business, and financial conditions deteriorate. It is what happened in the late 1970s and early 1980s.
Yahoo
24-05-2025
- Business
- Yahoo
This High-Yield Dividend Stock Could Deliver in a Downturn
General Mills, Inc. (NYSE:GIS) is a global producer and distributor of well-known packaged food brands. Its wide-ranging product lineup includes cereals, yogurt, soups, meal kits, snack and nutrition bars, ice cream, frozen pizzas, pet food, and more. Although founded in 1866, the company didn't fully pivot to consumer foods until 1995. Today, it's among the largest food manufacturers, with a market value exceeding $29 billion. The company's consistent investment in advertising and product development has helped it reach more than 95% of U.S. households and lead in several food categories. General Mills, Inc. (NYSE:GIS) has shown resilience during economic downturns. For example, in 2010, it posted record results, including increased net sales, higher gross margins, growth in operating profit across segments, and strong cash flow. A key factor in its stability is its reliable dividend. General Mills, Inc. (NYSE:GIS) has maintained consistent dividend payments for an impressive 126 consecutive years, even during some of the most difficult economic periods. This dividend stability comes from its stable cash position. In the first nine months of FY25, the company generated an operating cash flow of $2.3 billion, and it returned $1 billion to shareholders through dividends. On top of that, General Mills, Inc. (NYSE:GIS) has a dividend yield of 4.5%, which analysts and investors view as particularly appealing within the packaged food industry. While we acknowledge the potential of GIS as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued dividend stock that is more promising than GIS but that trades at 10 times its earnings and grows its earnings at double digit rates annually, check out our report about the . READ MORE: and Disclosure. None.
Entrepreneur
24-05-2025
- Business
- Entrepreneur
The Scientific Foodies: Bharat Bhalla and Varun Kapur, Co-Founders, Yu Foods
Before launching Yu, the duo ran a full-scale consumer survey, speaking to over 500 people about their packaged food habits. The verdict? Guilt, preservatives, and a lingering suspicion of the mystery-meat variety. That led them to deep-dive into food preservation technologies, where they stumbled on something unexpected—NASA, yes, NASA Opinions expressed by Entrepreneur contributors are their own. You're reading Entrepreneur India, an international franchise of Entrepreneur Media. If you ever find yourself downing instant noodles at midnight and wondering if there's a way to feel less guilty about it, Bharat Bhalla and Varun Kapur have an answer. And no, it doesn't involve counting calories or shame spirals. It involves astronauts, investment banking, and some serious food science wizardry. Welcome to Yu Foods, a startup that's aiming to make packaged food a little less evil. Founded in 2021 by Bhalla and Kapur, former investment bankers who swapped Excel sheets for ingredient sheets; Yu Foods was born from a mix of wanderlust and food snobbery. They were always on the go but never wanted to compromise on what they were eating. This passion for discovering wholesome foods that were easily accessible led them on a journey to re-imagine consumer packaged foods. Their journey into food-tech wasn't a whimsical leap. Before launching Yu, the duo ran a full-scale consumer survey, speaking to over 500 people about their packaged food habits. The verdict? Guilt, preservatives, and a lingering suspicion of the mystery-meat variety. That led them to deep-dive into food preservation technologies, where they stumbled on something unexpected—NASA, yes, NASA. During their research, they discovered that SpaceX used a method called lyophilization (freeze drying) to keep astronauts fed with fresh-tasting, preservative-free meals on the International Space Station. And just like that, a delicious "why not us?" moment struck. If it works in space, why not on Earth? So began a year of culinary chemistry experiments. They worked with top chefs and food scientists to cook up a range of ready-to-eat meals that are 100 per cent natural, require no refrigeration, and stay fresh for up to a year. The result? A clean-label product line that includes bestsellers like 100 per cent coconut water and whole wheat noodles. You get your umami hit without the MSG kickback. Yu Foods operates out of a 40,000 sq. ft. facility in Gurugram, a full-stack R&D lab that sounds more like a Silicon Valley startup than a food brand. But this isn't just high-tech snackery. The company is quietly building a global presence. In just three years, they've landed in 100 Indian cities and 7,500 retail stores, popped up in airline trays on SpiceJet and Akasa, and cracked into South Africa, Canada, and the US with partnerships at giants like Walmart, Checkers, and Pick n Pay. If you're wondering how a brand this young (and this fresh) scales so fast, look at your phone. Nearly 60 per cent of Yu's revenue comes from online platforms, with quick commerce alone contributing about 50 per cent. That means if you've panic-ordered dinner from Zepto, Swiggy, or Blinkit lately, there's a decent chance you've met a cup of Yu. Behind the growth is a very deliberate playbook. "Creating a food brand isn't just about good products," Bhalla and Kapur explain. "It's about having a strong brand philosophy." They lean into the idea of "conscious indulgence"—a phrase that sounds suspiciously like an excuse to eat more noodles, but with less sodium regret. While many packaged foods lean hard on shortcuts like concentrates, flavor enhancers, or dubious e-numbers, Yu skips all that. Even in categories like fruit juice where most of the industry is basically sugared water in disguise, Yu insists on 100 per cent real fruit, no added sugar, no fakery. It's not all digital dominance, though. Their offline presence is growing too, with a stronghold in North India and expansion into modern trade through Reliance and D-Mart. The company is aiming for a turnover of INR 100 crore by the end of FY26, doubling down on its hit noodle line and pushing deeper into beverages. And all this without making you feel bad for craving noodles. Now that's real innovation. Factsheet:
Yahoo
24-05-2025
- Business
- Yahoo
This High-Yield Dividend Stock Could Deliver in a Downturn
General Mills, Inc. (NYSE:GIS) is a global producer and distributor of well-known packaged food brands. Its wide-ranging product lineup includes cereals, yogurt, soups, meal kits, snack and nutrition bars, ice cream, frozen pizzas, pet food, and more. Although founded in 1866, the company didn't fully pivot to consumer foods until 1995. Today, it's among the largest food manufacturers, with a market value exceeding $29 billion. The company's consistent investment in advertising and product development has helped it reach more than 95% of U.S. households and lead in several food categories. General Mills, Inc. (NYSE:GIS) has shown resilience during economic downturns. For example, in 2010, it posted record results, including increased net sales, higher gross margins, growth in operating profit across segments, and strong cash flow. A key factor in its stability is its reliable dividend. General Mills, Inc. (NYSE:GIS) has maintained consistent dividend payments for an impressive 126 consecutive years, even during some of the most difficult economic periods. This dividend stability comes from its stable cash position. In the first nine months of FY25, the company generated an operating cash flow of $2.3 billion, and it returned $1 billion to shareholders through dividends. On top of that, General Mills, Inc. (NYSE:GIS) has a dividend yield of 4.5%, which analysts and investors view as particularly appealing within the packaged food industry. While we acknowledge the potential of GIS as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued dividend stock that is more promising than GIS but that trades at 10 times its earnings and grows its earnings at double digit rates annually, check out our report about the . READ MORE: and Disclosure. None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
09-05-2025
- Business
- Yahoo
Long-Term Decline In Cereal Market Poses Structural Challenges For Kellogg, Analyst Says
J.P. Morgan analyst Ken Goldman on Tuesday assigned a Neutral rating on the shares of WK Kellogg Co (NYSE:KLG) with a price forecast of $19.00. The company reported first-quarter earnings per share of 20 cents, missing the street view of 34 cents. Quarterly sales of $663 million missed the analyst consensus estimate of $679.49 million. KLG revised its 2025 outlook, now expecting organic net sales to decline 2.0% to 3.0%, and adjusted EBITDA to be flat or down 2.0%, versus previous forecasts of milder declines and EBITDA outlook reflects modest tariff impacts on raw materials, assuming continued trade exemptions with Canada and Mexico, though the company warned future tariff changes could further affect results. On the positive side, the analyst sees significant potential for margin expansion and believes the stock's current low valuation could help support its price. However, the analyst remains cautious about the company's projections for EBITDA margin gains, especially given weak sales trends. The long-term decline in the cereal market poses structural challenges, and upcoming restructuring and capital expenditures will strain cash flow, noted the analyst. The analyst said KLG shares should trade at a discount compared to larger packaged food companies due to ongoing difficulties in the cereal category, substantial upcoming spending on capital projects and restructuring, and the company's smaller scale. Price Action: KLG shares closed lower by 3.90% to $17.23 on Wednesday. Read Next:Photo by JHVEPhoto via Shutterstock UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets. Get the latest stock analysis from Benzinga? This article Long-Term Decline In Cereal Market Poses Structural Challenges For Kellogg, Analyst Says originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved.
