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Rank	Name	Searches
#1	Walmart	72,620
#2	Costco	67,947
#3	Target	42,581
#4	Dollar Tree	13,892
#5	Dollar General	11,504

Save Space for Snacks

Today, we’ll hit you with some stock picks based on the snacks Gen Z and millennials love.

Here’s a preview, relevant to earnings Walmart (WMT) and Target (TGT) released this week:

Gen Z and millennials spend more money on snacks each week than they do breakfast. The Juice quantifies this point – alongside other, equally interesting snack-related stats – in a minute.

But first, speaking of snacks, they’ve become big business for retailers such as Walmart and Target as part of the larger grocery category. These two companies drew similar conclusions about consumers from very different earnings results:

Walmart crushed estimates on revenue and profits, with sales rising 9% in Q3. Setting aside a $3.3 billion charge to settle an opioid-related suit, the company earned $1.50 per share versus an expected $1.32.
Target missed big on earnings per share but beat sales estimates. The company’s profits dropped roughly 50% in Q3.

Now, specific notes from each company’s report that give us a read on consumers:

Food drove mid-teens sales growth in Walmart’s grocery category.
Walmart observed consumers trading down to less expensive proteins, such as hot dogs, and skimping on baking goods and baby and dog food.
Households with $100,000+ incomes drove 75% of Walmart’s market share gain in groceries.
At Target, food and beverage sales were strong in Q3, growing in the low double digits.
Target’s private-label brands grew twice as much as its overall business.

While neither company specifically mentioned snacks when discussing groceries, we’ll make two safe assumptions based on years of snacking experience:

If consumers, especially younger ones, splurged on anything in the grocery aisles, it was snack food.
And they weren’t buying the private-label, “generic” versions of their favorites. Because there’s nothing like many of the brand names in the snack space.

As for the snack brands Gen Z and millennials love – and the companies that own them – scroll with us.

Investing

Key Takeaways:

Snacks are big business among young consumers.
Old-school, blue-chip companies make the snacks Gen Z and millennials favor.
This group of stocks can fit in most investors’ long-term portfolios.

Source: Knit

Gen Z and millennials drop $107.50 each week – more than $5,500 a year – on snacks. That’s more than they spend on breakfast.

Before we get serious, a few more fun tidbits:

76.2% of Gen Z and millennials snack at least 2-3x per day. You know what they say: Small, frequent meals keep your metabolism pumping!

12.9% of Gen Z and 8.5% of millennials snack 5x or more per day.
On the flip side, 27.9% of Gen Z and 19.9% of millennials report snacking just once per day.

What Types of Snacks Are They Eating?

Chips took the cake, with 81.4% of Gen Z and 75.6% of millennials calling it their top snack choice.
Among both groups combined, cookies came in second, followed by chocolate, gummies (the ones without THC, we can only assume!), and, get ready for this, fruits and veggies!

What Snack Brands Are They Eating?

The research listed too many brands to mention here, so we decided to narrow them down based on the parent companies – and stocks – we like best.

Among chip brands: Doritos, Cheetos, and Lay’s
Among candy brands: Reese’s and Kit Kat
Among “other” brands: Cheez-It and Goldfish

The Companies That Own These Brands

Source: Google Finance

PepsiCo (PEP) owns all three chip brands. The Hershey Company (HSY) owns both candy brands. The Kellogg Company (K) owns Cheez-Its. And Campbell Soup Company (CPB)’s Pepperidge Farms division owns Goldfish.

What do all four stocks have in common? That’s the bottom line.

The Bottom Line: All four stocks have absolutely crushed the S&P 500 index, as measured by the SPDR S&P 500 ETF Trust (SPY), over the last year.

Because investors love the relative safety of these consumer defensive names during times of high inflation.

But also, if we may add our two cents, like other vices, people love their snacks when times are tough. Snacks are comfort foods. And, if you’re doing well, why not buy more snacks?

Additionally, three of the four stocks have impressive track records when it comes to increasing dividends:

PepsiCo, 50 years in a row, making it a dividend aristocrat
Hershey, 12 years in a row
Kellogg, 17 years in a row

While Campbell Soup doesn’t have a streak going, it’s paid a dividend since 1995.

One of the themes The Juice has woven over the last couple of weeks is to pair blue chips alongside more speculative stocks, buying names such as Visa (V) first and SoFi (SOFI) second.

These snack stocks perfectly fit the primary blue-chip category. So buy them before you do anything else in the consumer defensive food & beverage space.

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Snack on These Stock Picks

Top Discount Store Stock Searches This Month