Buying better-for-you foods won't just improve your diet. It'll juice the economy, too.
Last fall in this space I reported on a landmark study authored through the Hudson Institute titled Better-for-you Foods: It's Just Good Business. In that report we analyzed fifteen of the largest consumer packaged goods (CPG) corporations such as General Mills, Kraft Foods, Coca-Cola and Nestle and concluded that companies with above average sales of better-for-you (BFY) products enjoyed larger sales increases over a 5-year period, higher operating profits, better returns to shareholders and superior reputations.
The message was clear: companies can make money while selling healthier products.
Now that the first quarter of 2012 is behind us, we asked ourselves: Are those findings holding up? This appears to be the case.
In reviewing the first quarter performance of all fifteen food and beverage companies evaluated last fall, we found that stocks of companies with the larger percentage of their sales in BFY products grew at over 3 times the rate compared to those companies selling a smaller percent of BFY products (+3.4% vs. +1.1%, respectively). While neither group approached the rise in the S&P 500 Index (+12%) for the quarter, those emphasizing their better-for-you portfolio benefitted more. Even more compelling, the average gain per share was +$1.74 for high BFY companies, compared to +$.25, a +$1.49 per share difference, or a 7 times greater dollar return on investment.