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Ingredients Suppliers Are A Better Investment Bet Than Consumer Goods Companies

February 14, 2014: 12:00 AM EST
Shares of consumer goods makers like Nestlé and Unilever, at the mercy of consumer spending trends, may have lost their luster for investors, but suppliers to those companies are less vulnerable, and thus more attractive. The main reason is that health and wellness trends – like a growing distaste for artificial ingredients – are driving consumer goods giants to reformulate their products. That’s good news for scent and flavor makers such as Symrise, Givaudan and International Flavors & Fragrances, and food ingredient purveyors like Glanbia and Kerry Group. Analysts say, for example, that European food ingredients companies on average will see a six percent profit rise in 2014, though European food producers will stagnate.
Martinne Geller, "Analysis - No appetite for big consumer goods? Try their suppliers", Reuters, February 14, 2014, © Thomson Reuters
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