Global 2024 Outlook for Consumer Staples Companies: Staying the Course

Our stable outlook for consumer staples companies in 2024 reflects our view that the credit risk profiles of most companies in this sector remain well positioned to continue to navigate the challenging operating environment. Strained consumer purchasing power due to aggressive interest rate hikes whose effects have not yet been fully felt and the compounded effects of gradually easing inflationary pressure characterize this environment. While consumers' purse strings will remain tight for yet another year as a result, we believe that these challenges will be largely balanced by the relatively inelastic demand for staple consumer products.

Key Highlights
-- Our stable outlook acknowledges the challenging operating environment globally, balanced by our view that the demand for staple consumer products is largely inelastic.
-- We expect any credit rating changes to be driven primarily by idiosyncratic factors.
-- Our outlook is largely consistent across all geographies.

“We believe that the shifting consumer dynamics in response to the uncertain global macroeconomic backdrop will continue to have less of an effect on consumer staples companies, particularly those with above-average brand strength, a breadth of product offerings, economies of scale, relative pricing power, and geographic diversification,” notes Aarti Magan, Vice President, Diversified Industries.