Fisher Investments on Consumer Staples

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CONSUMER STAPLES SECTOR BREAKDOWN

Now that you have a high-level understanding of the Consumer Staples sector and its origins, it’s time to explore the industries that make up the sector. We’ll cover each industry by asking four fundamental questions:

1. How big is the market?

2. Who are the biggest players?

3. How does the industry operate?

4. What are the industry drivers?

Answering these questions provides insight into the basic framework of each Consumer Staples industry. Armed with this knowledge, you can better understand the variables business managers in the sector grapple with day to day, which can make you a better Consumer Staples investor.

This chapter can serve as a reference guide to use when seeking a refresher on industries you may consider investing in. With that in mind, feel free to skip around if you’re particularly interested in certain industries.

GLOBAL INDUSTRY CLASSIFICATION STANDARD (GICS)

Before beginning, some definitions: The Global Industry Classification Standard (GICS) is a widely accepted framework for classifying companies into groups based on similarities. The GICS structure consists of 10 sectors, 24 industry groups, 68 industries, and 154 sub-industries. This structure offers four levels of hierarchy, ranging from the most general sector to the most specialized sub-industry:

• Sector

• Industry Group

• Industry

• Sub-Industry

Let’s start by breaking down the Consumer Staples sector into its different components. According to GICS, the Consumer ...