With the current fashion for technology, the food and drinks sector may not be flashing too brightly on the radar screen of many Sharetrack investors.

Indeed, the group has been out of favour in recent times, underperforming the EuroStoxx Index by 44 per cent since the beginning of l999. This can be explained largely by the market's appetite for companies that are capable of delivering stronger growth in sales and margins.

Given the relative maturity of this industry, many food companies are finding it increasingly difficult to grow unit volumes at the double-digit rates of other sectors.

At the same time, the current low inflationary environment and increased competitive pressures from retailers have led to an inability to implement price increases successfully.

While many companies, such as Unilever, have tried to enhance earnings by tackling costs and improving efficiencies, the market remains unimpressed.

However, completely bypassing this sector would be ill-advised, given the diverse range of high-quality players. Companies within the Sharetrack universe, such as Coca-Cola, Heineken and Kerry Group have all substantially outperformed their respective markets over the past decade in earnings per share.

From a valuation perspective, many of these companies also appear relatively inexpensive. For example, on a share price to earnings (p/e) basis, the ratings of both Kerry Group and McDonald's appear undemanding when compared to their historic average and their respective market multiples.

Furthermore, many food companies are successfully adapting to the Internet age with the introduction of impressive e-commerce strategies.

As a case in point, Fyffes was the first fruit company to set up an Internet-based platform, called Worldoffruit.com., offering a fully operational exchange on the Internet for trading commodities for the global fresh produce industry. Danone has recently announced a venture with Nestle for the forthcoming arrival of an Internet marketplace for purchasing and supply chain management. Such strategic initiatives, coupled with attractive sectoral valuation measures, should offer Sharetrack investors some food for thought.

Please note that Goodbody Corporate Finance acts as adviser to Worldoffruit.com

Laura De Voy works as a researcher in the private client department of Goodbody Stockbrokers.