In this article, we will explore the 10 Best Cookies and Crackers Stocks to Buy. To skip our detailed analysis of the snacks sector, you can go directly to see the 5 Best Cookies and Crackers Stocks to Buy.
The snack food industry, especially the segments involving cookies and crackers, continues to exhibit strong growth patterns. Consumer preferences are shifting towards convenience foods and indulgent treats. Companies leading the way in this sector not only boast robust product lines but also demonstrate innovative approaches to marketing and distribution that appeal to a broad consumer base.
Household names such as Mondelez International, Inc. (NASDAQ:MDLZ) and Kellogg Company (NYSE:K) have long dominated the cookies and crackers market. The iconic brands under their belts have become staples in homes globally. Mondelez, the powerhouse behind Oreo and Chips Ahoy!, and Kellogg, known for its Keebler and Cheez-It brands, have not only capitalized on their legacy products but have also been pioneers in adopting healthier ingredients and catering to evolving consumer tastes.
Apart from the giants, there are emerging players that have started to make significant waves in the industry. The Simply Good Foods Company (NASDAQ:SMPL) is gaining attention with its approach to offering gluten-free and low-carb options. It is targeting health-conscious consumers. Another notable mention is Lotus Bakeries. It is a Belgian company famous for its Biscoff cookies, which have seen an impressive penetration in the U.S. market thanks to its unique flavor profile and successful marketing strategies.
Market Dynamics and Growth Opportunities
The global cookie and cracker market was valued at $100 billion in 2023. The market is expected to grow at a CAGR of 3.9% to reach $122 billion by 2030. The industry is undergoing a significant shift, and consumers are now increasingly inclined towards healthier snack options. Sustainability and ethical practices are increasingly becoming factors that influence consumer choices. Companies like Hershey Co. (NYSE:HSY) have ventured into the snack segment with acquisitions like Amplify Snack Brands. The company is committing to more sustainable packaging and sourcing to appeal to environmentally conscious consumers.
Reducing plastic waste remains a key priority for the industry. Recently, British crisps company Two Farmers developed 100% compostable packaging made from eucalyptus cellulose. Major snack companies like Frito-Lay and Kettle Chips are also experimenting with alternative materials, driven by consumer demand and potential regulations aimed at reducing plastic waste.
Inflation Remains a Challenge
The food industry has been facing significant challenges in the recent past. The Russia-Ukraine war disrupted supply chains, impacting the prices of many commodities used in food items. Currently, inflation continues to impact the cookies and crackers companies. Popular biscuit company Pladis has indicated that prices may increase by up to 5% due to rising global costs for key ingredients like sugar and wheat.
Mondelez International CEO Dirk Van de Put expressed concerns about persistent inflation at the company’s recent earnings call. The company remains cautious about ongoing inflationary pressures. The rising cocoa prices in the recent past have impacted the company’s financial performance of late. However, overall sentiment for 2024 remains optimistic, with expectations of strong earnings growth for the company.
Here is what the management commented on how inflation is expected to affect the company’s performance going forward during Q4 2023 earnings call.
As Europe faces more inflation than any other market, we expect customer disruption during Q1 and potentially into Q2, associated with our annual price negotiation process. This process is happening earlier in some cases than last year, so intact might be more pronounced in Q1 for top and margin lines. We also remain committed to substantial brand support in this region and all the others, similar to our stance over the last past several years. In terms of interest expenses, we expect approximately $325 million. We are expecting $0.03 of EPS of headwinds related to forex impact for the year. In terms of taxes, we expect an ETR in the mid-20s. Share repurchase expectations are around $2 billion. Turning to our EPS outlook on page 21. With respect to adjusted EPS, we expect high single digit growth of our reported base ’23 of $3.30 per share, which includes the $0.11 of contribution from our divested developed gum business.
Pixabay/Public Domain
Our Methodology
To pick out the firms for this article, we first gathered all the publicly traded firms that operate in the cookies and crackers space. Then, the number of hedge funds out of the 933 funds part of Insider Monkey’s database for the fourth quarter of 2023 that had invested in them was determined. The list was then ranked according to the number of hedge fund positions in each company.
Best Cookies and Crackers Stocks to Invest In
10. Kellogg Company (NYSE:KLG)
Number of Hedge Fund Holders: 23
Kellogg Company (NYSE:KLG) is primarily for its cereals and breakfast foods. The company extends its product range to snack bars and crackers, including its Special K cracker chips and Nutri-Grain bars, which contain cookie-like textures and flavors.
23 hedge funds had positions in Kellogg Company (NYSE:KLG) in Q4 valued at $89.56 million.
In addition to Kellogg Company (NYSE:KLG), PepsiCo, Inc. (NYSE:PEP), Mondelez International, Inc. (NASDAQ:MDLZ), and The Hershey Company (NYSE:HSY) are part of our list of 10 best cookies and crackers stocks to invest in.
9. Campbell Soup Company (NYSE:CPB)
Number of Hedge Fund Holders: 25
In addition to its flagship soup products, Campbell Soup Company (NYSE:CPB) owns the Pepperidge Farm brand, which is well-known for its range of premium cookies and crackers, including the iconic Milano cookies and Goldfish crackers.
Campbell Soup Company (NYSE:CPB) saw a small decline in hedge fund holders from 26 to 25 but an almost doubling in the total value of holdings from $218.24 million to $412.62 million.
Campbell Soup Company (NYSE:CPB) recently reported its Q2 2024 results. The president of the company, Mark Clouse, said the following about the Campbell Soup Company (NYSE:CPB)’s recent performance and future outlook.
Our condensed cooking portfolio saw both dollar and volume share increase in the quarter, marking the sixth consecutive quarter we’ve held or grew both metrics. We also saw similar strength in our broth portfolio, with Swanson Broth and stock growing above the category rate and dollar consumption up 13%. In addition, while growing consumption, this portion of our portfolio also had dollar and volume share gains in the quarter. While the eating soup landscape remains more challenging, we did see sequential improvement in the second quarter as it relates to dollar share on Chunky and our condensed eating portfolio. The longer term outlook for ready-to-serve soup remains quite strong, supported by a combination of continued Chunky innovation and marketing, expansion of the successful launch of Pacific ready-to-eat soup, and we’re also excited about the impact of including the strength of the super-premium Rao’s soup line, adding approximately a full point of share growth to the portfolio.
8. Flowers Foods, Inc. (NYSE:FLO)
Number of Hedge Fund Holders: 26
Flowers Foods, Inc. (NYSE:FLO) is known for bakery products, including fresh breads, buns, and rolls. The company also owns the Tastykake brand, which offers a range of cookies, including the popular Krimpets and Kandy Kakes that have a cookie-like base.
For Flowers Foods, Inc. (NYSE:FLO), there was a slight decrease in hedge fund interest, with the count going down from 27 to 26, yet the total value of holdings went up from $166.74 million to $252.76 million.
7. Post Holdings, Inc. (NYSE:POST)
Number of Hedge Fund Holders: 32
Traditionally a cereal company, Post Holdings, Inc. (NYSE:POST) has diversified into various food segments. The company’s foray into the snack aisle complements its breakfast products, leveraging its expertise in grain-based foods to offer a variety of snacking options. The company’s cookies and crackers segment caters to the growing consumer demand for convenient and delicious snack alternatives.
The number of hedge funds invested in Post Holdings, Inc. (NYSE:POST) stayed steady at 32, but the total value of holdings edged up from $908.28 million to $1.01 billion, marking an increase of roughly $100.00 million.
Argosy Investors made the following comment about Post Holdings, Inc. (NYSE:POST) in its Q3 2023 investor letter:
Finally, I added to Post Holdings, Inc. (NYSE:POST) because it is a long-term position that was undersized, and POST had recently announced a large acquisition of pet food brands that act as a new platform. POST is turning back to the clock by creating a reincarnation of Ralston-Purina, the conglomerate Bill Stiritz ran many years ago with great success. Like Stiritz’s Ralston, POST has been a consistent purchaser of its own shares, demonstrates improved efficiency within its own businesses, and occasionally makes disciplined acquisitions to bolster existing franchises or add new platforms. Additionally, POST is not an empire builder, as it has sold its private label food business to a private equity firm, and spun off BellRing Brands in recent years. With the spinoff of WL Kellogg in recent days, and due to Kellogg’s lower margins, I would be surprised if POST does not try to acquire some portion of WL Kellogg, although it would likely need to divest some cereal assets to avoid regulatory scrutiny. POST trades relatively inexpensively, at a 9.1x EV/EBITDA ratio, and means that POST is positioned to continue its unique value creation going forward.
6. The J.M. Smucker Company (NYSE:SJM)
Number of Hedge Fund Holders: 35
The J.M. Smucker Company (NYSE:SJM) is largely associated with its fruit spreads, but its acquisition strategy has allowed it to enter different food segments.
The J.M. Smucker Company (NYSE:SJM) experienced an increase in hedge fund holders from 33 to 35. The total value of these holdings doubled from nearly $459.50 million to $1.03 billion. The gain of approximately $573.88 million signals a potent uptick in market confidence in The J.M. Smucker Company (NYSE:SJM).
Mark Smucker, President of The J.M. Smucker Company (NYSE:SJM) said the following about the company’s performance during Q3 2024 earnings call.
And in addition, we still saw — in addition to the lap in the retail space, we still saw really good performance in both Canada and very strong performance in the Away From Home space. But I think notably, if you look at consumer takeaway in the quarter, the consumer takeaway remains very strong, which again, helps to support our confidence in the double-digit growth and the reacceleration of the brand as we move forward into the next several quarters. And then I guess just one final point about Uncrustables, remember, we just turned on marketing. So we’ve had great — not only the advertising, both in traditional and social channels, but also the endorsements that we’ve had across some of our professional sports sponsorships and then our ability to continue to gain distribution in all of those channels just supports the confidence in that brand.
Click to continue reading and see 5 Best Cookies and Crackers Stocks to Buy.
Suggested Articles:
- 15 States with the Largest Oil Reserves in the US
- 20 Most Diverse Countries in Asia
- 15 Best Places to Retire in Georgia
Disclosure. None. 10 Best Cookies and Crackers Stocks to Buy was initially published on Insider Monkey.
