RubinBrown Food & Beverage Update 2015

Public Equity Markets: Food & Beverage Returns

Industry Subsectors Exhibit Lackluster Performance Relative to the S&P 500 Index The S&P 500 exhibited a rocky start in 2015, with the index dropping by 3.1% in January alone. The S&P 500 has since recovered and has remained relatively flat, finishing up 0.2% during the first half of 2015. While the Food & Beverage (F&B) Index has generally been correlated with the S&P 500 over the last year or so, the F&B Index has consistently outperformed the S&P 500. Since January 1, 2014, the F&B Index returned 20.5%, outpacing the S&P 500 with a return of 12.6%. When further stratifying the food and beverage universe into subsectors consisting of companies with LTM revenue less than $1.0 billion (refer to pages 17 – 19 for the subsector constituents), the S&P 500 managed to outperform the smaller food and beverage companies over the last 18 months. The beverage subsector witnessed a sell-off in March 2015, eroding much of the gains accumulated during late 2014 / early 2015. Over the trailing 18-month period, the ingredients subsector generally generated mostly negative returns, while food production companies lagged the S&P 500.

Industry Equity Performance

Equity Performance by Subsector

40.0%

40.0%

S&P 500 Index Food Production Companies BeverageCompanies Ingredients Companies

S&P 500 Index S&P Food & Beverage Select Industry Index S&P 500 Consumer Staples Sector Index

30.0%

30.0%

12.6% 20.5% 11.8%

20.0%

20.0%

12.6% 7.1% 10.4%

10.0%

10.0%

0.0%

0.0%

-6.4%

-10.0%

-10.0%

Source: S&P Capital IQ

Source: S&P Capital IQ

-20.0%

-20.0%

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Food & Beverage Industry Sector: 2015 Mid-Year Update

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