There's something strange going on in the world of packaged foods: Even as the population has grown and the economy has improved, U.S. sellers of packaged foods and beverages have seen stagnant sales volume.
"We can be fairly certain they're still eating, if we take a look around," quipped Jonathan Feeney of Athlos Research. But he added that Americans may now be inclined to eat somewhat different types of items, and in different ways.
For starters, it would appear that "people are going to dollar stores, and other places that aren't as easily measured or served by traditional distribution" methods," Feeney said Tuesday on CNBC's "Trading Nation."
On top of that, when they do go to the supermarket, they appear to be spending less time in the packaged-food-packed aisles.
When people buy groceries, they're displaying a greater predilection to buy "compete meals at the perimeter of the store, fresh foods at the perimeter of the story."
Feeney reports in a recent note to clients that the supermarket prepared food business has grown by $15 billion since 2008, taking almost 3 percentage points of market share in the "food at home" category from packaged foods with long shelf lives.
While some argue that a greater interest in eating healthy has motivated the shift, the analyst says consumers are attempting to find "cheaper eats in a deflationary world."
And how have companies responded to these trends? By and large, sellers of packaged food and beverages have found ways to cut costs and increase margins in order to squeeze out more profits from the same amount of sales, Feeney said.
"Not coincidentally, volumes seem to be stagnant or worse, and worsening YTD," he added in a note.
The advice he consequently provides to investors is simple: Ignore the magic of margin boosts, and look for companies that are actually managing to increase sales.
"Buy the growth companies, and leave aside the ones that aren't growing on the top line," Feeney said. "This focus to cost savings and deals and consolidation in the space won't last forever, but growth will."