April 28th, 2021 | 07:00 CEST
Nestlé, Kraft Heinz, The Very Good Food Company: Conservative investments - rethought
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At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.
Nestlé: This boredom breeder is breaking new ground
If you want to invest in food, Nestlé comes to mind first and foremost in German-speaking countries. The Company is anything but cyclical and offers an attractive dividend yield. The Swiss are the world's largest food manufacturer, offering everything from cereals and canned goods to baby food or diet products. Nestlé also has sweets and dairy products on offer. Nestlé's solid organic growth, even during the crisis, shows that food is a reliable business.
The Company recently acquired Aimmune Therapeutics in the health sector, giving it a more modern look. Aimmune has launched a product against peanut allergies. The idea seems tempting: a food company offering solutions for the growing number of allergy sufferers. In the future, Aimmune wants to address other ailments of civilization. For Nestlé, the acquisition is a growth kick - after all, the peanut allergy product has potential sales of EUR 1 billion. Even if Nestlé reads well for investors, the share still falls short of expectations - 1.8% share return in one year is too little. However, you cannot go far wrong with the stock.
Kraft Heinz needs to reinvent itself
Kraft Heinz is similarly well-known as Nestlé. The Company stands for all kinds of dips and barbecue sauces, Philadelphia cream cheese and sausages. The example of Philadelphia describes quite well the business model of the big food multinationals: cream cheese is cheap to produce and not a particularly challenging product in any other way. But thanks to a well-known brand and sustained marketing, companies like Kraft Heinz can skim off a particularly high margin.
Nevertheless, things are not going so well at Kraft Heinz. In the past fiscal year, special write-offs ensured that profits were only in the low triple digits - not enough for one of the world's five most prominent suppliers in the food sector. Although the last few quarters have shown slight signs of a trend reversal, which is expected to continue into the current fiscal year, Kraft Heinz itself emphasizes that it needs to renew its product range to succeed in the market.
The Very Good Food Company: Vegan food like from the butcher
The Very Good Food Company does not have this problem. With its vegan products, the Canadian Company is in tune with the spirit of the times - and at the same time makes all consumers, who like their food particularly meaty and hearty, happy. How does it work? The Very Good Food Company produces meat and sausage substitutes and dispenses with complex processing procedures. Processed foods are considered rather unhealthy by health-conscious people. Nevertheless, the Canadian Company makes sure that its products look like they were bought fresh from the butcher. In addition to an online store, The Very Good Food Company also operates restaurants where customers can get to know the Company's range of products.
In recent months, the Canadians have invested in more production capacity and now work with 301 partner companies, including chains such as Whole Foods, Thrifty Foods and others. The Very Good Food Company deliberately sets itself apart from Beyond Meat and other competitors and operates in the quality segment - the Canadians will not have any cooperations with fast-food chains. In the background, The Very Good Food Company is working on expansion in the USA and can also imagine moving into Europe. In the past three months, the stock has corrected 26% after previously creating a real hype. For those looking to innovate within the food sector, The Very Good Food Company is worth looking at. Traditional food companies might also take notice - the brand is consistent, and the products are well received.
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