Understanding the Current Trends of NZ’s Consumer Staples Sector- 2 Stocks to Consider

This report is an updated version of the report published at 5:41 PM (GMT +13) on November 20, 2025

Comvita Limited (NZX: CVT) is the global market leader in Mānuka honey and bee consumer goods. Scales Corporation (NZX: SCL) is a diversified agribusiness portfolio. It comprises three operating divisions: Horticulture, Storage & Logistics and Food Ingredients.

Kalkine’s Sector Report covers the Investment Highlights, Key Financial Metrics, Risks, Outlook, Technical Analysis along with the Valuation, Target Price, and Recommendation on the stock.

1. Sector Landscape and Outlook

As per Stats NZ, food prices witnessed a rise of 4.7% in the 12 months ended October 2025, after the 4.1% rise in the 12 months ended September 2025. Notably, increased prices for the grocery food group, which increased 4.9%, contributed the most to the annual rise in food prices. This was followed by meat, poultry, and fish, which were up by 7.6% annually. However, food prices witnessed a decline of 0.3% in October 2025 as compared to September 2025. The fruit and vegetables subgroup was the only group which encountered a decline, contributing to the overall fall.

The vegetable prices declined 10.7% this month, and salad items including lettuce, tomato, and cucumber became cheaper. This is the largest monthly price decline for vegetables since the month of November 2021.

Exhibit 1: Food Pices (Annual % Change) (June 2025 - October 2025)

Data Source: This work is based on/includes Stats NZ’s data which are licensed by Stats NZ for reuse under the Creative Commons Attribution 4.0 International Licence; Chart Created by Kalkine Group

Business Price Indexes: September 2025 Quarter

As per Stats NZ, in the quarter ended September 2025, the output producers price index (PPI) witnessed a rise of 0.6%, the input PPI increased 0.2%, and the farm expenses price index (FEPI) increased 1.4% as compared to June 2025 quarter. Notably, the largest output industry contributions were from electricity and gas supply (down by 11.5%), sheep, beef cattle, and grain farming (up by 10.3%) and fruit, oil, cereal, and other food product manufacturing (up by 5.7%).

The largest input industry contributions were from electricity and gas supply, which demonstrated a decline of 19.1%, meat and meat product manufacturing (which were up by 8.2%), and dairy product manufacturing (up by 1.7%).

Exhibit 2: Producers Price Indexes (Quarterly % change) (September 2024 - September 2025)

Data Source: This work is based on/includes Stats NZ’s data which are licensed by Stats NZ for reuse under the Creative Commons Attribution 4.0 International Licence; Chart Created by Kalkine Group

Improvement in Export Revenues

As per Situation and Outlook for Primary Industries (SOPI) June 2025, the dairy and red meat sectors were supported by the increased export prices due to robust global demand and tighter supply. Furthermore, favourable weather conditions, easing of cost pressures, and a healthy farmgate milk price have fueled the milk production. Furthermore, horticulture gained from favourable growing conditions for kiwifruit, avocado, cherries, and apples as well as pears.

Key Risks and Challenges:

RBNZ, in the release dated 8^th October 2025, the economic activity through the middle of 2025 remained weak. In part, this demonstrates the domestic limitations on the supply of goods as well as services in some industries, and the impact of uncertain global economic policy. Notably, the household consumption seems to be recovering, partly due to reduced rates, while higher commodity prices are supporting the primary sector. Overall, NZ’s consumer staples sector is exposed to risks related to increased inflationary concerns, supply chain constraints, geopolitical worries, etc.

Exhibit 3. Key Risks in Consumer Staples Sector:

Source: Analysis by Kalkine Group

Outlook:

As per SOPI June 2025, the trade has been supporting the growth of NZ’s food and fibre sector. This year alone, this sector is expected to contribute $59.9 billion to the economy. The market access has been expanded for the broader range of dairy processors, which include sheep, goat, and deer milk exporters, and new agreements have been secured with the UAE and Gulf Cooperation Council. As per the report, the food and fibre sector export revenue to expected to reach $65.9 billion by 2029.

Overall, the macroeconomic conditions witnessed an improvement for the sector, amidst strong growth in critical markets like the US, China, and India. Also, the inflation outlook improved, interest rates declined, which gave the relief to farmers, while the farm input costs moderated significantly during the year. Notably, tighter global production throughout dairy and meat, along with some favourable weather in New Zealand, supported export revenue.

Apart from the sector-specific factors, an analysis on 2 NZX-listed companies is provided. This report covers their insights, outlook, performance and potential as expected to be delivered in the near to medium term.

1) Scales Corporation Limited (Recommendation: Buy, Potential Upside: Low Double-Digit) (M-Cap: NZD 874.4 Mn, Annual Dividend Yield: 3.21%)

Business Description:

Scales Corporation Limited (NZX: SCL) is a New Zealand-based company, which is engaged in agribusiness.

Outlook:

SCL increased in its earnings guidance for FY 2025, and underlying net profit after tax attributable to shareholders is now projected to be between $54 million - $59 million. This is an increase from the previous guidance range of $51 million - $56 million.

Technical Overview:

Technical Commentary

On the daily chart, SCL’s stock price is undergoing an uptrend characterized by higher highs and higher lows, indicating a positive bias. Additionally, the momentum oscillator RSI (14-period) is heading north from its midpoint, providing more support to the mentioned recommendation. Prices are trading between its previous peak and trough, which might function as resistance and support levels for the stock, respectively. A key support level for the stock is placed at NZD 5.5, while crucial resistance level is positioned at NZD 6.4.

Fundamental Valuation

Stock Recommendation

Considering the facts above, a ‘Buy’ recommendation on the stock has been provided at the current market price of NZD 5.90 per share (New Zealand Time: 1:00 PM (GMT +13)) as on 20^th November 2025.

2) Comvita Limited (Recommendation: Speculative Buy, Potential Upside: Low Double-Digit) (M-Cap: NZD 35.2 Mn)

Business Description:

Comvita Limited (NZX: CVT) is the global market leader in Mānuka honey and bee consumer goods.

Outlook:

For FY 2026, CVT is expecting EBIT on a normalised pre IFRS-16 basis of $13.5 Mn. Furthermore, the company’s management is focused towards maintaining the cost discipline as well as margin stability while, at the same time, operating in its agreed funding parameters. Its revenue in Q1 FY 2026 amounted to $45.6 Mn, which surpasses the budget of $43.8 Mn and prior year of $42.3 Mn.

Technical Overview:

Technical Commentary:

While undergoing a downtrend, CVT’s stock price is rebounding from a significant support established by its previous trough, anticipating a potential rally. Moreover, the momentum oscillator RSI (14-period) is trading deep in its oversold territory, adding further evidence to the previous observation. Prices are trading below both 21-day and 50-day SMAs indicators, which might function as dynamic resistance levels for the stock; in contrast, the stock’s nearest trough may act as a support level. A significant support level for the stock is placed at NZD 0.45, while critical resistance level is positioned at NZD 0.55.

EV/Sales Based Valuation

Stock Recommendation

Considering the facts above, a ‘Speculative Buy’ recommendation on the stock has been provided at the current market price of NZD 0.500 per share (New Zealand Time: 5:31 PM (GMT +13)) as on 20^th November 2025.

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is November 20, 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4:  Annual Dividend Yield is on a Trailing Twelve Month (TTM¹) basis and are subject to change based on factors such as company performance, stock price changes, etc.

Note 5: Kalkine reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 25-30 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.