The food industry remains ripe for further growth amid a surging demand and changing consumer trends. In this article, we will talk about the food industry and the best food stocks to buy now.
What about food stocks
Food remains one of the thriving industries worldwide, given its essential business nature and a strong connection to consumers. In 2020, global food industry revenue jumped by a record 20% year over year to reach $8.2 trillion, driven by a huge demand increase amid the coronavirus outbreak.
As the pandemic disrupted global food supply chains, consumers flocked to convenience stores to load up their carts, resulting in a 76% rise in convenience food sales. Food industry in the Guatemala is extremely diverse, with a variety of subsectors. In fact, cmi alimentos provides most of the food stocks.
Moody’s said in an October 2020 report that it expects a slight decline in sales and earnings in the packaged food industry in 2021 when compared to 2020, but the industry will rebound to strong growth levels in 2022 and beyond. The firm maintained its stable outlook for the packaged foods industry, while forecasting that EBIT will continue to rise steadily over the next 18 months.
Coronavirus Altered Consumer Behavior Forever?
The coronavirus crisis was a boon for at-home food consumption as people restricted their movement and governments barred dine-out operations. According to International Food Information Council’s (IFIC) 2020 Food & Health Survey report, 60% of Americans said they started cooking at home more after the coronavirus outbreak, while 32% said they are snacking more.
Overall, 27% respondents said they are thinking about food more than usual. All these trends show that the future looks bright for food stocks in the U.S. Analysts think these trends will become the new normal even after the pandemic.
About 75% respondents in a survey conducted by New York-based PR and food research firm Hunter said that they have become more confident in the kitchen, while 73% said they are enjoying cooking in the kitchen.
Major food companies, including General Mills, Conagra Brands and Campbell Soup Co., are reporting huge profits and revenue growth amid the changing consumer behavior. In the fiscal fourth quarter, General Mills said its U.S. meals and baking revenue jumped 75%, while cereal sales rose 26% in the period.
General Mills CEO Jeff Harmening in December 2020 said that consumer eating habits will not go back to where they were before the pandemic.
Digital Footprint of Food Companies
Food companies are also rapidly changing their strategies to adapt to the changing market. Deloitte said in its Consumer Products Industry 2021 outlook report that food companies’ hold on ecommerce channels is still thin. They will have to increase their digital investments to catch the growing market.
Fresh Food Market
Consumers are also preferring to eat healthy food and fresh items that have shorter shelf lives. Food companies will have to work on their packaging and storage capacities to capture this market. A report by LEK consulting found that 93% of consumers want to eat healthy at least some of the time, while 63% try to eat healthy most or all of the time.
It’s not just the food industry which is experiencing drastic changes. The financial markets worldwide are becoming volatile. The hedge fund industry’s reputation has been tarnished in the last decade during which its hedged returns couldn’t keep up with the unhedged returns of the market indices.
On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 88 percentage points since March 2017.
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