Heinz Beats Street With Overseas Exposure

Despite the name, there's nothing more American than french fries and ketchup, except maybe the hamburger that comes with it. It's a legendary American food staple with popularity has that helped H.J. Heinz (NYSE:HNZ) become the food processing giant that it is. With its signature ketchup and Ore-Ida brand french fries, it looks like the company has managed to corner this favorite American meal choice. IN PICTURES: Eight Ways To Survive A Market Downturn

Global Emerging Middle-Class Developing a Taste for American Foods
Now it looks like the company has plans to replicate its domestic success around the globe. Increasingly prosperous middle-classes in Asia, Latin America and Eastern Europe are keen to experience the same taste sensations that Americans have enjoyed for decades, and that spells opportunity for U.S.-based processed food giants like Heinz, Kraft (NYSE:KFT), Campbell Soup (NYSE:CPB) and Sara Lee (NYSE:SLE).

Heinz: A Key Player in Rapidly Growing Overseas Food Markets
For its part, Heinz is already well ahead of the curve in exploiting these new markets. The company already gets about 60% of its sales from outside the U.S., with emerging markets sales the fastest growing. By 2013 emerging markets, some analysts anticipate that China and Russia should account for 20% of sales; up from the current 15%.

Latest Earnings Top Estimates
Already, this exposure is helping push sales ahead at an accelerating pace. Organic sales were up 3.6% in the latest period, the highest rate of growth in a year and well ahead of its peers. That helped Heinz report an expectations beating 75 cents per share during the latest quarter; ahead of the consensus call of 73 cents.

The Bottom Line
Consumer staples stocks like Heinz have traditionally been viewed as defensive plays, favored in tough times by portfolio managers seeking a safe haven in companies that have steady but unimpressive growth characteristics. With its diversified product portfolio, Heinz's sales growth should remain steady, but its growing emerging market exposure promises to make its future sales growth anything other than unimpressive. (To learn more, see Guard Your Portfolio With Defensive Stocks.)

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