We recently compiled a list of the 10 Best Cookies and Crackers Stocks to Buy.In this article, we are going to take a look at where Nestlé S.A. (OTC:NSRGY) stands against the other cookies and crackers stocks.
The Global Cookie and Cracker Market
The global cookie and cracker market was valued at $100.2 billion in 2023 and is expected to grow to $122.45 billion by 2030, growing at a compound annual growth rate of 3.7% during the forecast period between 2024 and 2030. Region-wise, North America dominates the market with the United States and Canada as its top markets. With significant markets in the United Kingdom, Germany, and France, Europe follows. Simultaneously, Asia Pacific is depicting rapid growth with significant market expansion in countries such as China and India.
What is the Global Snacking Industry Looking Like?
According to Mondelēz International's annual State of Snacking Report 2023, consumers continue to snack strong as 6 in 10 global consumers surveyed for the last 5 years have been consistently of the opinion that they tend to eat many small meals throughout their days instead of few large ones while young people look forward to the snacks in their day, more as compared to the meals. Younger consumers tend to snack once or more a day. Across all ages, the majority have ritualized snack time as they consume a snack at a special moment or time of the day.
Consistent snack spending is evident from the fact that two-thirds of consumers have not made significant changes to their spending on snacks although they are more conscious of price. Recently, consumers have cut back spending on non-essential items which has negatively impacted sales for Starbucks and McDonald’s. However, the threat doesn't seem major to the snacking industry as snacking giants still see snacking as a large, attractive, and durable category that continues to grow in importance with consumers.
A piece of important news surfacing in the market just before the year's end, as reported by CNBC, is that the Oreo maker has made a preliminary takeover approach for Hershey according to those familiar with the matter. The company had previously made a takeover bid for Hershey in 2016 which Hershey’s board unanimously rejected. The acquisition, if it takes place, is going to result in one of the biggest confectionery companies globally. While the combined business could be a huge deal, the question about it competing against the recent Mars’ acquisition of Kellanova which is expected to materialize in the coming year, is circulating all around. This acquisition is a great deal in the global snacking market as well since it ranks among the top 10 global food and beverage mergers and acquisitions since 1995, as revealed by Dealogic.
Our Methodology:
In order to compile a list of the 10 best cookies and crackers stocks to buy, we went through stock screeners, relevant ETFs, and media reports to make a list of relevant stocks. Moving on, we shortlisted the top 10 stocks from our list which had the highest number of hedge fund holders. The 10 best cookies and crackers stocks to buy have been arranged in ascending order of their hedge fund holders, as of Q3.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A filled shopping cart with popular food and beverage items.
Nestlé S.A. (OTC:NSRGY)
Number of Hedge Fund Holders:4
Nestlé S.A. (OTC:NSRGY) is a leading food and beverage company with its products selling in 188 countries across the world. The company has a portfolio of over 2000 brands across coffee, cereals, water, dairy, and drinks among other categories. A world-class portfolio of powerful brands in attractive and high-growth categories within the food and beverage industry, a global reach, and industry-leading R&D are some of the core strengths of Nestlé S.A. (OTC:NSRGY).
While the food giant has been struggling with slowing sales growth and sluggish consumer demand, the newly appointed CEO Laurent Freixe remains ambitious to get the company back on track. The CEO reiterated the Nestlé uniqueness as follows:
"Nestlé is a strong company with global reach, exceptional demand generation and in-market capabilities. We have a diverse and strategically well-positioned product portfolio. Our iconic brands and innovative products connect with people every day, at every stage of their lives. These strengths give us a unique advantage and position us to win in the marketplace. We will now invest further in our brands and growth platforms to unlock the full potential of our products for our consumers and our customers."
In November, Nestlé set out a new action plan at its Capital Markets Day for investors and analysts, dedicated to improving market share performance and advancing category growth within the multinational food giant. Actions include targeted investments in winning brands and growth platforms, addressing underperformers, and more focused innovation activities to drive greater impact. Under this plan, Nestlé's waters and premium beverages activities are to become a global standalone business, as of January 1, 2025.
The firm has increased advertising and marketing investment to 9% of sales by the end of 2025 under the plan to bolster Nestle’s brands while it will be generating the investment needed from cost savings and growth leverage. Nestlé aims to deliver incremental cost savings of at least CHF 2.5 billion by 2027's end, with work already taking place on key initiatives across procurement, commercial investments, and structural costs. Previously, the firm announced Organizational and Executive Board changes, meant to result in a leaner Executive Board structure and close collaboration of the leadership team at the headquarters thereby increasing simplicity, enhancing decision-making, and solidifying the momentum behind global initiatives.
Nestlé S.A. (OTC:NSRGY) is an important player in the global cookie market since Nestlé Toll House's Original Chocolate Chip Cookies have served as a true classic and a go-to recipe for all occasions. Nestlé Toll House is a household name in many countries, synonymous with chocolate chip cookies. The iconic brand continued to pursue innovation and later revived the childhood dreams of many as it introduced its edible cookie dough.
Overall NSRGY ranks 10th on our list of the best cookies and crackers stocks to buy. While we acknowledge the potential of NSRGY as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than NSRGY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
