In this article, we will navigate through the prevalent snacking behaviors, market dynamics, and the 10 best cookies and crackers stocks to buy.
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.
With that being said, let’s move to the 10 best cookies and crackers stocks to buy.
Pixabay/Public Domain
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).
10. 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.
9. J&J Snack Foods Corp. (NASDAQ:JJSF)
Number of Hedge Fund Holders: 15
J&J Snack Foods Corp. (NASDAQ:JJSF) offers branded snack foods to food service and retail supermarket outlets across the United States. The firm’s products include the iconic SUPERPRETZEL and ICEE, fan favorites like LUIGI’S Real Italian Ice, The Funnel Cake Factory Funnel Cakes, and Hola Churros, as well as a variety of other products spanning baked goods, frozen beverages, and frozen novelties categories.
The firm serves as a leader and innovator in the snack food industry. It has evolved from a humble facility and eight employees into a family of 4,200 with locations across the US and products in every supermarket nationwide. The firm continues to bolster its strong brand portfolio. In April, J&J Snack Foods Corp. (NASDAQ:JJSF) made a strategic move with the acquisition of the Thinsters, a brand known well for its thin, crunchy cookies made from simple, real ingredients. This strengthened the firm’s position as a leader in the American snack food market. Regarding the move, Dan Fachner, the firm’s President and CEO, commented:
“This acquisition is a natural fit for us, complementing our already vast offering of cookies and baked goods. Thinsters’ dedication to using high-quality, wholesome ingredients resonates perfectly with our growing customer base. We look forward to leveraging our strengths to expand distribution and introduce Thinsters cookies to a wider audience.”
The important aspect of this move was that J&J Snack Foods Corp. (NASDAQ:JJSF) has priorly completed over 30 transactions that have successfully integrated niche brands into beloved American snacks, some of which include SUPERPRETZEL, ICEE, and DIPPIN’ DOTS. It is indeed through organic growth and strategic acquisitions that the firm is now positioned as a billion-dollar diversified food company that is a major player in the snack food industry.
The growth has translated into strong financial results for the company as it closed a promising fiscal 2024 with net sales increasing 1% to a record $1.57 billion. It posted double-digit growth in adjusted EBITDA led by 80 basis points improvement in gross margins to 30.9%. With a diverse portfolio of beloved brands, the firm looks forward to a bright fiscal 2025 crowded with numerous growth opportunities.