‘Death of the Brand’ or dearth of thought?

The article argues that the traditional branded-consumer-goods moat has weakened and that investors should challenge the quality-compounder consensus through capital-cycle analysis.

• The author says television advertising provided branded consumer companies with a roughly 70-year advantage, but social media ended that tailwind and enabled retailers to promote private-label products.
• Branded companies allegedly over-raised prices, while private-label margins are 1.0–2.5 times higher than margins on branded goods, making the consumer less concerned with sustaining a 15% EPS CAGR.
• Kraft Heinz and Anheuser-Busch both traded above 7.0x LTM EV/sales in July 2017, implying software-like margins for beer and cheese; by contrast, Costco, Kroger, Walmart and Tesco traded at approximately 0.5–0.8x EV/sales.
• From July 2017 to August 2026, Hosking's retailer basket rose 245%, while a basket of Nestle, Unilever, Diageo, Kraft Heinz, Anheuser-Busch and Clorox delivered an average 0% return.
• The author attributes the quality-compounder error to analytical overreach, behavioural dependence on investors such as Warren Buffett, and a commercial preference for a simple concentrated-investing story.

Takeaway: Investors should be wary of extrapolating high returns and brand durability, and should seek contrarian opportunities where high expectations have attracted excess capital, while recognising that the conclusion rests on Hosking's selected baskets and methodology.