# Consumer brands in bargain bin: How to invest

> Consumer brands face value drops as investors seek bargains.
- Title: Consumer brands in bargain bin: How to invest · MoneyWeek
- Summary: Consumer brands face value drops as investors seek bargains. Consumer brands like Diageo and Unilever have fallen in value due to inflation and debt, but…
- Keywords: consumer brands, diageo, unilever, reckitt benckiser, berkshire hathaway, see's candies, intangible assets, brand value, dividend, inflation, k-shaped recovery, premiumisation
- Source: MoneyWeek — https://moneyweek.com/investments/retail-stocks/consumer-brands-are-in-the-bargain-bin-time-to-buy-now
- Published: 2026-10-30T14:00:00+00:00
- Read time: 2 min
- Topics: consumer brands, diageo, unilever, reckitt benckiser, berkshire hathaway, see's candies, intangible assets, brand value, dividend, inflation, k-shaped recovery, premiumisation
## Consumer brands once outperformed
Consumer brands used to be dependable outperformers but have struggled in recent years.
## Global brands generate sales outside UK
Their global consumer brands, including Johnnie Walker, Dove and Dettol, generate sales outside the UK.
## Historic share price growth
Unilever's share price quadrupled, Diageo was up six times and Reckitt Benckiser by almost 11 times from 2000 to 2020.
## Warren Buffett's See's Candies deal
Warren Buffett bought See's Candies for three times book value in the 1970s, teaching that brand value isn't recorded on the balance sheet.
## Marketing costs expensed
Marketing costs for consumer brands, 12-18% of revenue, are expensed as incurred through the income statement.
## Intangible assets on balance sheet
Acquired brands like Unilever's Horlicks, Knorr and Hellmann's are recorded as intangible assets on the balance sheet.
## Diageo's Don Papa write-down
Diageo wrote down the value of the Don Papa brand by $287 million two years after buying it for £294 million.
## Kraft Heinz write-down comparison
Kraft Heinz announced a $15.4 billion write-down of its best-known brands in 2019, dwarfing Diageo's write-down.
## Consumer brands struggle with inflation
Consumer brands have struggled to keep pace with inflation despite high gross margins.
## Supermarkets outperform
Supermarkets like Tesco and Sainsbury's have seen share prices rise due to inflation and low cost of goods sold.
## K-shaped recovery impact
Middle-class workers have faced a severe wage squeeze relative to inflation, with many carrying more household debt.
## Diageo's dividend cut
Diageo halved its dividend to give management more financial flexibility amid falling sales and a 26% drop in earnings per share.
## Unilever's recovery signs
Unilever reported 4.8% underlying sales growth and trades on a P/E ratio of 16.9 times December 2027 forward earnings.
## Diageo's turnaround strategy
Diageo's new CEO targets $1 billion in annual savings through cost cuts and a shift to value brands.
## Investment case for Diageo
Diageo shares trade on a 13.3 times P/E based on June 2028 forward earnings, well below historic averages.
## Consumer brands face challenges
Reckitt faces legal problems in the US over infant formula feed, with a $60 million award overturned in court.
## Key takeaway

Consumer brands like Diageo and Unilever have fallen in value due to inflation and debt, but investors see opportunities in their turnaround potential.