Food & beverage

Food and beverage companies produce or assemble things people eat and drink, then sell them through grocery stores, restaurants, and increasingly online. Some make ingredients others use; some operate restaurants directly.

These businesses have been around for over a century, and many of the biggest brands today (Coca-Cola, Hershey, Kellogg's) were founded before 1900.

Coke makes the concentrated syrup at its plants. Sells the syrup to bottlers (often independent companies) who mix it with water, fizz, and bottle it. Bottlers deliver to stores and restaurants. You buy.

This is unusual — the brand owner doesn't actually own most of the manufacturing and distribution. Coca-Cola Company gets a cut from licensing the recipe and brand to thousands of bottlers worldwide.

Selling food and drinks at the small margin between input cost (sugar, corn, milk, packaging) and what supermarkets pay. The brands that win command higher prices and shelf space — supermarkets carry Coke not Generic Cola.

Restaurants (McDonald's, Starbucks) are different — they franchise the brand to operators who pay royalties on every sale.

A supermarket has 30,000 products. Customers don't have time to evaluate each one. Brands are mental shortcuts — Coke means you know what you're getting.

Once a brand is established, it becomes incredibly hard to dislodge. New entrants have to spend billions on marketing just to be noticed. This is the moat that makes food companies safe.

Packaged food (Nestlé, Kraft Heinz, General Mills) sells through stores. Steady demand, less labor exposure.

Restaurants (McDonald's, Starbucks, Chipotle) sell prepared meals directly. More labor and rent exposure but higher growth potential and more brand intimacy.

Health trends — sugar taxes, weight-loss drugs (GLP-1s like Ozempic are reducing demand for soda and snacks), shifts away from processed food.

Commodity prices (sugar, corn, coffee, cocoa). Currency moves for global brands. And generational shifts — Gen Z buys Coke less than Gen X did.