Packaged food stocks have become spoiled trades thus far in 2021 as Wall Street frets about a growth slowdown later this year with people becoming more mobile after getting their COVID-19 vaccine.
Year-to-date, shares of beverage giants Coca-Cola and PepsiCo are down 2.1% and 3.8%, respectively despite each putting up impressive first quarters this month and solid outlooks. The S&P 500 is up a tasty 11% in 2021, by comparison.
Meanwhile, food company stocks have fallen out of favor with investors, too. Frozen food behemoth Conagra has seen its stock only gain 2% this year. Campbell Soup shares are down 1.2%. Spam maker Hormel shares have shed 1%.
Despite the unsavory performance of their stocks, Big Food is still seeing some very large increases in demand for their products amidst the pandemic. Downbeat Wall Street may not want to hear it right now, but the latest sales gains in things like cereal suggest eating-at-home won't experience a drastic falloff later this year and into 2022 as human mobility returns.
"The COVID-19 pandemic has presented an incredible consumer trialing opportunity. Our innovation and marketing approach has enabled us to secure not only strong trial, but also strong repeat rates and market share gains. Based on the evidence we are seeing, we expect to emerge from the pandemic with structurally higher volumes and share, driven by the stickiness of the COVID-driven demand," opined Conagra Brands CEO Sean Connolly on the company's early April earnings call.