Cleaner Living cleans up in July

Cleaner Living cleans up in July

July was a bit of a roller coaster ride for the domestic stock market, as it grappled with the ongoing U.S.-China trade war, economic data that points to a slowing global economy and the expected interest-rate cut by the Federal Reserve at the end of the month. For the month in full, each of the major stock market indexes finished higher month-over-month, adding to their gains for the year, but exited the month below their July highs. The same was true for the Tematica Research Cleaner Living Index, which rose 1.2% in July, continuing its sharp June rebound. 

Driving the July performance for the Cleaner Living Index were shares of Beyond Meat (BYND) and Primo Water Corp. (PRMW), both of which climbed more than 20% during the month. Those moves reflect the continued expansion of Beyond Meat’s meatless protein products, a growing number of partnerships and expanding consumer awareness of water quality. That last topic was a key conversation point in our recent Thematic Signals podcast conversation with Dr. Roy Speiser. The index’s July performance also benefitted from double-digit gains at Simply Good Foods (SMPL), the company that leverages the Atkins brand in the healthy snack market, Trex (TREX) and Fresh del Monte Produce (FDP). 

Offsetting those gains were continued declines at Tenneco Inc. (TEN). The company’s clean air solutions have been impacted by the combination of a slowing global economy, a weakening of the auto market and on-going US-China trade concerns. Other notable decliners with the index for the month of July included Sprouts Farmers Markets (SAFM) and Renewable Energy Group (REGI). Sprouts continues to confront the traditional grocery chains expanding their natural, organic and healthier for you product offerings. Cleaner fuel company Renewable Energy Group on the other hand is facing falling oil prices, making competing solutions increasingly affordable. 

As we are starting to wind down the 2019 June-quarter earnings season, coming into this week more than three-quarters of the S&P 500 group of companies had reported those quarterly figures. Tallying those results, we’ve seen earnings-per-share expectations for the current quarter fall. The result is that full year 2019 earnings per share expectations for that cohort of 500 companies has risen just 2.7%, compared to 2018. Before too long, investors will begin to focus on 2020 growth prospects, and current expectations have the S&P 500 group of companies growing their collective earnings by 10.8% year over year in 2020. 

By comparison, the Cleaner Living index constituent base is slated to grow its collective earnings by nearly 30% in 2020. That’s significantly faster than the expected year over year EPS growth of 6%-12% in 2020 for the consumer discretionary, consumer staple and utility segments tallied by FactSet. Arguably the difference in those EPS growth rates reflects the accelerating shift by consumers toward natural, organic and healthier for you solutions that speaks to the structural shift captured by Tematica’s Cleaner Living investment theme and index. 

While we very much like the overall vector and velocity of the Cleaner Living constituent base and the collective earnings-per-share growth to be had in the coming quarters, we recognize at least in the near-term the overall market and subsequently the Cleaner Living index will likely be impacted by U.S.-China trade developments, the speed of the global economy and changes in monetary policy from the world’s major central banks.

Signals for Tematica’s Cleaner Living investment theme & the Cleaner Living Index


Performance for the Tematica Research Cleaner Living Index (CLNR) is available through Bloomberg, Reuters, FactSet, and other data aggregators, as well as the Tematica Research website. The index is currenty available for licensing for the use in a variety of exchange traded products or as a data overlay in portfolio screening and management. The Tematica Research Cleaner Living Index is being calculated by Indxx.

Samsung ditching plastic packaging with environmentally sustainable materials, but who will pay for it?

Samsung ditching plastic packaging with environmentally sustainable materials, but who will pay for it?

One of the central aspects of our investment themes is the ensuing change in consumer behavior that can lead to a company changing its strategy or how it operates in order to attract that cohort of consumers. While it may not appear to be a big deal, Samsung changing the packaging on its products from smartphones to home appliances is at a minimum an attempt for it to get inline with the growing trend that is Environmental, Social and Governance.

While it may not be enough to say Samsung is riding our Clean Living investment theme, it does add to its switch in recent years to light emitting diode (LED) lit products and other environmentally friendly solutions.

Samsung Electronics said Sunday it will replace plastic packaging used for its bevy of products from mobile phones and tablets to home appliances and wearables with paper and other environmentally sustainable materials like recycled/bio-based plastics.

Samsung will start making the switch in the first half of the year. The company aims to only use paper packaging materials certified by forestry initiatives by next year. By 2030, Samsung says it plans to use 500,000 tons of recycled plastics and collect 7.5 million tons of discarded products (both cumulative from 2009).

For instance, the plastic trays used to hold mobile phones and tablets will be replaced with ones made from pulp. Samsung said it will also alter the phone charger design, swapping the glossy exterior with a matte finish and eliminating plastic protection films, reducing the use of plastics.

Plastic bags used to protect the surface of home appliances such as TVs, refrigerators, air conditioners and washing machines as well as other kitchen appliances will also be replaced with bags containing recycled materials and bioplastics. Bioplastics are made from plastic wastes and non-fossil fuel materials like starch or sugar cane.

In my view, the below is perhaps the most telling statement in this switch at Samsung, but the question is how will it respond in terms of pricing its products? Will Samsung seek to pass this incremental cost on or let it nibble into its profits?

The company will adopt more environmentally sustainable materials even if it means an increase in cost,” Gyeong-bin Jeon, head of Samsung’s Global Customer Satisfaction Center, said in a statement.

Source: Samsung is ditching plastic packaging | TechCrunch

Mastercard says plastic credit cards should go green

Mastercard says plastic credit cards should go green

Over the last few months, we’ve seen a growing intolerance for plastic. From cups to containers and straws, companies from Starbucks to Marriot International and Hyatt are ditching plastic straws catering to consumers that are increasingly focused on our Clean Living investing theme. With 6 billion plastic credit and debit cards pushed out each year, that is a lot – A LOT – of plastic that credit card issuers are putting in the hands of consumers. Mastercard recognizes this and is putting forth an agenda to reduce the use of PVC plastic in card manufacturing. Unlike what we’ve seen straw replacements, that have included paper, bamboo, metal and even pasta replacements, these debit and credit cards need a replacement material that can handle the transactional and security technologies enclosed inside the cards as well as one that is ample and cheap to manufacture.

We see this as the beginning of the conversation, and it will take some time to see if this catches fire in the industry or if it’s just a lot of talk with little action.

 

 

The world has a plastic problems — a fact illustrated earlier this week when researchers from the Environment Agency Austria and the Medical University of Vienna jointly presented evidence that there is so much plastic in the environment that we’ve actually begun to inadvertently eat it. Scientists are now looking for more funding to get a better understanding as to how so much plastic has made it into human digestive tracts worldwide — but the big takeaway, Mastercard President of Cyber And Intelligence Solutions Ajay Bhalla told PYMNTS, is pretty obvious.

To push that goal, Mastercard — in partnership with the world’s three largest card manufacturers, Gemalto, Giesecke & Devrient and IDEMIA — has officially launched the Greener Payments Partnership to establish environmental best practices and reduce first-use PVC plastic in card manufacturing.

“Going green, historically, in cards has been linked to purchases, If the customer spends X amount in dollars, the card donates a set amount to an environmental cause. We have yet to take the next step, which is in changing the actual materials that are used,” he said.

Making that change, though, will be difficult, Bhalla acknowledged, because plastic is standard, easy and cheap. Attempts have been made at finding some alternatives (corn-based plastics have been used), but these efforts are not nearly large enough to really draw any conclusion. The goal, he said, is not to make 100,000 cards, but to find a replacement material that will work for the literal billions of cards out there, and work as well as those cards do today.

Consumers, he noted, love their plastic cards — study after study has demonstrated they like being able to pull them out and use them at will. That means changing the make of those cards has to preserve the experience that customers favor.

Source: Mastercard: Plastic Credit Cards To Go Green | PYMNTS.com

First plastic water bottles, now plastic straws

First plastic water bottles, now plastic straws

Fond memories of sipping an ice cold soda after a game or feeling like you’re about to suck your brains out of a straw trying to get that first taste of a milkshake could very well become a thing of the past as single-use, plastic straws come under attack as part of Clean Living.

More than just the food and beverages we put into our bodies but what they are housed in as well as other forms of packaging and plastic uses are all being impacted as the Clean perspective grows. Candidly, we see this as the one of the next moves following after plastic water bottles, which has led to a pronounced pick up in reusable glass and metal cups of all sizes, both hold and cold. We are starting to see paper as well as glass and metal straws make the rounds and odds are this is far from over with plastic cutlery a likely followup to strawpocalypse.

 

Slurping up smoothies, sodas and slushies through disposable plastic straws could one day become a thing of the past.

The call to toss plastic straws out of our food system is growing louder and louder. On Thursday Bon Appétit, a large food service company, announced it is banning plastic straws in all 1,000 of its cafes in 33 states, including locations like AT&T Park, home of the San Francisco Giants. The company says it plans to complete its transition to paper straws by September 2019.

The movement to oust plastic straws has spread across the U.S., from Miami Beach, where straws are now banned, to Malibu, where the prohibition also extends to single-use plastic utensils and stirrers.

The anti-straw movement comes amid growing recognition of the environmental toll of all the single-use plastics that people throw out.

In 2014 alone, Americans tossed out more than 33 million tons of plastic, the vast majority of which was not recycled, according to the Environmental Protection Agency.

Source: Last Straw For Plastic Straws? Cities, Restaurants Move To Toss These Sippers : The Salt : NPR