Unilever PLC (UL) and Kimberly-Clark Corporation (KMB) are two prominent players in the global fast-moving consumer goods (FMCG) industry. Headquartered in London, U.K., UL offers consumer goods, food, detergents, fragrances, beauty, home, and personal care products. In comparison, KMB in Dallas, Tex., manufactures and markets personal care and consumer tissue products. The company sells its products directly to supermarkets, mass merchandisers, drugstores, warehouse clubs, variety and department stores, other retail outlets, and through other distributors and e-commerce.
Although growing supply chain issues, surging COVID-19 cases, and high inflation caused retail sales to decline in December, the inelastic demand for home, health, food & drinks, and personal care products should enable the FMCG industry to overcome these challenges and perform steadily. This, combined with their consistent quarterly dividend payments, should help UL and KMB attract investors amid the current market volatility. Investor interest in this space is evidenced by the iShares U.S. Consumer Goods ETF’s (IYK) 1.2% returns over the past month versus the SPDR S&P 500 Trust ETF’s (SPY) negative returns. The global FMCG market is expected to grow at a 5.4% CAGR to $15.36 trillion by 2025. So, both UL and KMB should benefit.
