China Consumer Staples

Latest edition · September 15, 2026

China Consumer Staples Food What we learn from past El Niño cycles

Goldman Sachs examines the impact of El Niño cycles on Chinese food companies, noting nuts face cost headwinds while sunflower seeds and konjac see mixed or resilient outcomes. Current raw material costs remain manageable, and snack/frozen food names maintain low COGS exposure (<10%) to heavily affected bulk agricultural commodities.

Evaluating historical precedents from the 2015–2016 and 2023–2024 El Niño cycles, Goldman Sachs finds that nut processors such as Chacha experienced GPM compression during past droughts, whereas konjac manufacturers like Weilong and Yankershop offset raw material spikes through internal efficiency. Heading into 4Q26 and early 2027, input costs remain under control, with sunflower seed procurement costs down 18% YoY and almond prices down 6% YoY. Because Chinese snack and frozen food companies carry less than 10% COGS exposure to sugar, palm oil, and soybeans, their vulnerability to broader agricultural inflation is limited, supported further by product innovation and favorable competitive pricing dynamics.

Key takeaways from the latest edition

• 1.Historical El Niño precedents demonstrate that nut producers face notable margin headwinds, while impacts on sunflower seeds are mixed and konjac margins remain relatively resilient due to efficiency gains.
• 2.Current key raw material input costs remain broadly manageable across Chinese snack and frozen food categories heading into the 4Q26 procurement window.
• 3.Snack and frozen food companies have limited exposure (<10% COGS) to primary El Niño-vulnerable crops like sugar, palm oil, and soybeans, insulating them compared to broader staples.

What this series covers

• Key Raw Material Price Trends
• Potential Impact from El Niño & key points to watch
• Price Target Risks and Methodology - Three Squirrels
• Price Target Risks and Methodology - Fu Jian Anjoy Foods Co.
• Price Target Risks and Methodology - Chacha Food
• Price Target, Risks, and Methodology - Weilong Delicious Global Holdings
• Price Target Risks and Methodology - Yankershop

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