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So where do you buy all of these Consumer Staples products we’ve been talking about? You buy them at Food & Staples retailers. Fisher Investments identifies the four central sub-industries in the Food & Staples Retailing universe are Hypermarkets & Super centers (44 percent of Food & Staples Retailing), Food Retail (39 percent), Drug Retail (14 percent), and Food Distributors (3 percent).*
Since these retailers sell a wide variety of staples products, Fisher Investments believes their businesses are relatively non-cyclical. To give you a feel for a standard Staples retailer’s revenue derivation, Fisher Investments will break down how the average American spends $100 on a shopping trip.**
- Perishables: $50.10
- Beverages: $8.26
- All other grocery, food: $11.30
- Non - food grocery: $7.94
- Snack foods: $4.42
- Main meal items: $6.84
- Health & beauty care: $3.58
- General merchandise: $4.38
- Pharmacy: $3.18
The global market capitalization of the combined Household & Personal Products industry is around $ 550 billion and represents about 17 percent of the MSCI World Consumer Staples benchmark.** Table 4.9 shows the 10 largest Household & Personal Products (HPP) firms globally, listed by market capitalization.
Fisher Investments believes new HPP products are usually the result of research and development (R&D) efforts. Most firms in this space closely link their R&D departments to marketing. Marketing teams participate in consumer learning initiatives to gain in - depth knowledge of the company's consumers and target markets. Armed with this insight, Fisher Investments believes marketers help decide which new products to roll out and the best ways to design them. While most HPP firms create their packaging designs in-house, many firms purchase containers or packaging from third parties. On average, raw materials used to manufacture products and packaging comprise around 70 percent of the cost of goods sold (COGS). The remaining COGS include labor and factory overhead expenses.
For more information or to purchase Fisher Investments on Consumer Staples, click here.
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