Kraft Heinz Continues to Innovate, Launches Capri Sun Drinks – September 18, 2017

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Keeping the changing food preferences in mind, The Kraft Heinz Company (KHC Free Report) recently introduced four organic drinks under its Capri Sun brand.

The drinks include Capri Sun Fruit Refreshers, Capri Sun Organic, Capri Sun 100% Juice and Capri Sun Fruit & Veggie Blends. The products will be free from artificial colors, flavors and preservatives.

Innovation Efforts to Counter Sales Slump

With growing awareness of the nutritional value of food products and a subsequent shift in consumer preference toward organic product over packaged items, Kraft Heinz, like many other companies in the industry, is emphasizing on natural and organic ingredients, reshaping its existing products and entering new categories.

The company has been seeing top-line weakness over the past several quarters. Kraft Heinz’s categories have seen a slowdown due to soft global retail and consumer demand. Consumption trends in a number of the company’s key categories like ready-to-drink beverages, frozen meals and salad dressings remain challenged. In the first half of 2017, reported sales of $13.04 billion declined 2.4% year over year due to soft consumer demand in North America and Canada.

In fact, shares of Kraft Heinz have lost 6.8% year to date. Earnings estimates have also moved down 1.6% for the current year and 2% for the next over the last 60 days.

A few of the company’s successful innovative endeavors to boost demand include Lunchables, P3, Heinz Yellow Mustard sauces in Europe and Mayo in Brazil. It also renovated Kool-Aid Jammers and added a new line of Classico Riserva branded premium pasta sauces. Further, a range of frozen meals with enhanced nutrition is slated for launch this year.

Notably, the company expects organic sales growth to ramp up in the second half of 2017 on stronger sales performance and cost savings.

Stocks to Consider

A few better-ranked stocks in the Consumer Staples  sector are Nomad Foods Limited (NOMD Free Report) , The Chefs’ Warehouse, Inc. (CHEF Free Report) and General Mills, Inc. (GIS Free Report) . While Nomad Foods sports a Zacks Rank #1 (Strong Buy), Chefs’ Warehouse and General Mills carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Nomad Foods’ current-year expected earnings growth is 20.7%.

The current quarter’s expected earnings growth for Chefs’ Warehouse is 42.9%.

General Mills’ earnings are expected to grow 1.5% in fiscal 2018.

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