Big Name F&B Stocks Are Falling, Should You BuyOr sell ?
Big names like Kraft Heinz, an S&P 500 stock and a holding of Warren Buffett, have seen their share price decline by 20% over the past two years.
Kraft Heinz is not an outlier. Other giants such as Campbell Soup, Hershey, Hormel Foods, Brown-Forman, and even European heavyweights like Diageo and Nestlé have also fallen by more than 20% during the same period. Looking at the sea of red across the F&B sector, one might assume a market crash had occurred—yet this stark underperformance stands in sharp contrast to the bullish returns of the broader S&P 500.
Brown-Forman, known for its portfolio of liquor brands with Jack Daniel’s as its flagship, has seen its stock struggle due to several factors. Declining alcohol consumption trends, driven by shifting cultural preferences and the potential impact of weight-loss drugs that reduce drinking desire, have weighed heavily on its performance. Additionally, tariffs on U.S. whiskey exports, which have previously hurt European sales, and underperformance in key segments like tequila and ready-to-drink beverages have further dampened investor confidence, contributing to the stock's decline.
This isn’t a Brown-Forman-specific issue either—other alcohol companies such as Constellation Brands, Anheuser-Busch InBev, and Diageo have also been among the weaker performers in our compilation, highlighting the industry-wide impact of these challenges.
Next up are the chocolate makers—Hershey, Mondelez, and Nestlé. A key concern weighing on their performance has been the surging cocoa prices, which have doubled over the past year, significantly increasing input costs.
Another company ,the effectiveness of weight-loss drugs from Eli Lilly and Novo Nordisk has raised worries about reduced snack consumption, further pressuring sales in the sector. Nestlé, in particular, has faced additional challenges, including an abrupt CEO change in 2024 due to weak sales growth and slowing product development, adding to investor uncertainty.
Finally, with all this issues the stellar performance of the S&P 500 over the past two years, delivering consecutive gains of more than 20%, the index’s strong returns have concealed significant underperformance in the F&B sector In the coming year aheard
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