When most investors think about consumer stocks, they immediately picture the United States.
They think about Amazon (AMZN), Walmart (WMT), Starbucks (SBUX) , or Home Depot (HD).
But one of the biggest investment themes of the next decade may not be centered in America at all.
Instead, it could be driven by billions of consumers around the globe whose spending habits are changing in ways that create enormous opportunities for investors willing to look beyond our borders.
Europe is enduring another historic summer of extreme heat. Temperatures have soared across much of the continent, forcing millions of households to make a purchase that, until recently, many never considered necessary: air conditioning.
For decades, Europe simply wasn’t an air-conditioning market. Only about 20% of European homes have AC, compared to roughly 90% in the United States. Many older buildings weren’t designed for cooling systems, strict historical preservation rules made installations difficult, and most homeowners viewed air conditioning as an unnecessary luxury.
That’s changing in a hurry.
This year’s prolonged heat waves have triggered an explosion in demand for portable and easy-to-install air-conditioning units. Exports of air conditioners from China to the European Union have jumped more than 40%, with shipments to countries like France and Spain more than doubling compared to last year. In Germany, online sales have surged as consumers rush to beat the heat.
Some of the most popular portable units have become so difficult to find that models originally selling for around €800 have reportedly changed hands for several thousand euros on the secondary market.
Think about what that means from an investment perspective.
When consumers decide they need something (not simply want it) entire industries can experience years of growth. It isn’t just the manufacturers that benefit. More air conditioners mean higher electricity demand, greater investment in power grids, more transmission infrastructure, smarter buildings, and increasingly efficient cooling technologies.
We’ve talked a lot this year about the Electrification of Everything. This is another perfect example. One purchasing decision creates demand throughout an entire ecosystem of companies.
And that’s exactly why I believe investors need to start thinking differently about consumer investing.
For years, Wall Street has focused on where products are made. Companies shifted manufacturing to China. Supply chains stretched across Southeast Asia. Labor costs became one of the biggest drivers of corporate profits.
Today, I think investors should pay just as much attention to where products are being sold.
We’re witnessing something remarkable: hundreds of millions of people around the world are steadily moving into the middle class. As incomes rise, spending follows a remarkably predictable path. Families buy their first refrigerator. They purchase a car. They travel more frequently. They upgrade their smartphones. They shop at modern warehouse clubs instead of local markets. Eventually, they begin buying premium brands, luxury goods, and experiences.
We’ve seen this movie before.
America experienced it after World War II. Japan experienced it during its economic miracle. South Korea followed a similar path. More recently, China lifted hundreds of millions of people into the middle class, creating enormous opportunities for companies that recognized the trend early.
Now the next chapter is unfolding.
India continues to add millions of middle-class consumers every year. Southeast Asia is seeing rapid income growth across countries like Vietnam, Indonesia, and the Philippines. Latin America continues modernizing its retail infrastructure. Even parts of Africa are beginning to see meaningful improvements in disposable income as urbanization accelerates.
When billions of people become just a little wealthier, the ripple effects can be enormous.
Many investors make the mistake of thinking consumer investing begins and ends with American retailers. They assume the biggest opportunities are limited to companies headquartered in the United States.
History suggests otherwise.
Some of tomorrow’s biggest winners may operate warehouse clubs throughout Central America. Others may sell luxury handbags in Paris to customers from Shanghai or Dubai. Some may operate digital payment networks across India or online marketplaces serving Southeast Asia.
The opportunity isn’t confined by geography.
It’s driven by human nature.
As people’s standard of living improves, they spend more. They seek convenience. They upgrade their homes. They invest in better healthcare. They travel. They dine out. They purchase products that were once considered luxuries.
That simple progression has created fortunes for investors for generations.
Tomorrow, we’ll head to Central America to discuss one of my favorite under-the-radar consumer companies - a business I shop at regularly here in Nicaragua that reminds me of Costco during its earlier years.
Later this week we’ll visit Europe’s luxury powerhouses, explore Asia’s rapidly expanding consumer economy, and finish back in the United States, where the American consumer remains one of the strongest economic forces in the world.
One of the biggest investing mistakes you can make is assuming the world’s future will look like its present.
The greatest investment opportunities often emerge where purchasing power is growing the fastest - not necessarily where it’s already the largest.
The AI revolution may dominate headlines today, and rightly so. But every technological revolution ultimately serves one purpose: improving people’s lives. As productivity rises, incomes increase and standards of living improve, consumers everywhere benefit.
And that’s why I believe the rise of the global consumer will become one of the defining investment themes - and one of the greatest investing opportunities - of the decade ahead.
Here’s to the future,
Matt McCall
Editor, Market Insights
