...Packaged food companies generally have strong FCF and liquidity, which allows them to navigate the slow growth operating environment and maintain leverage appropriate for their ratings in a still-difficult environment. What to Watch Potential Top-Line Improvement Food companies will focus on accelerating weak top line and volume growth with product innovation that resonates better with today's time-constrained and increasingly health conscious consumers. However, growth may prove elusive. Diverging Geographical Growth Prospects Fitch expects modest improvement in the U.S. operating environment based on projected higher GDP growth, lower unemployment and gas prices. These should provide a lift to grocery spending and foodservice results. The eurozone remains weak as consumer confidence is still fragile, unemployment is high and central and eastern Europe have geopolitical disturbances. However, faster growing emerging markets provide some offset for those with large exposure including Nestle...
