Packaged food industry is riding the wave of coronavirus as the pandemic massively impacted its consumers’ dietary behaviour. Demand for packaged food and beverages is witnessing a sharp increase as lockdown prompted shoppers to panic buy all packaged food items.

Over the last few years, this consumer-driven industry underwent copious shifts, courtesy of the ever-changing demands of buyers and substantial innovations. Rise of health-conscious consumers dented demand for processed food and fuelled organic food market growth. However, processed food appears to have staged a comeback amid the COVID-19 quarantine. Restaurants unable to open their doors due to social distancing forced consumers to order online and dine at home. Millennials, who are otherwise less brand loyal, are now returning to trusted brands and comfort food. Home-cooked food is now considered safer than junk items. High unemployment rate and restricted travel are also boosting the sales of packaged food. Thus, coronavirus is reshaping the future of packaged food companies overnight. 

Per Businesswire, a Berkshire Hathaway company, the packaged food market is expected to see stable growth rate during the 2020-2026 forecast period. Moreover, according to a recent ResearchAndMarkets industry data, the global packaged food market is expected to be valued at $4.89 trillion by 2027, up from $2.77 trillion in 2018.

Market Remains Volatile but Rewarding

The coronavirus outbreak created a huge lacuna globally. Although in the short term, many packaged food items witnessed skyrocketing sales, the outlook seems less promising in the long run. There might be a slump in consumer demand if the economy crashes or enters into a recessionary phase. Purchasing power of many consumers might change permanently post the pandemic. As disposable income falls, people will spend less on food and premium ranges will worst-affected.

The more intense aftermath of COVID-19 is yet to be seen. Food and beverage companies should re-evaluate their business strategies to survive the prevalent adversities. A strong online presence will help the industry players pull through this unprecedented crisis.

Even though there are many uncertainties dogging the future, packaged food and beverage companies can set a precedent for overcoming an adverse environment with the speedy evolution of technology, which will manage businesses well. Thus, 2020 will be an ideal year to be cited as a reference point in leveraging technology amid a chaotic landscape.

In the light ofall the tailwinds under the given scenario, we narrowed down our search to five packaged-food stocks for an attractive investment portfolio. Each stock has a Zacks Rank #1 (Strong Buy) or 2 (Buy). 

You can see the complete list of today’s Zacks #1 Rank stocks here.

B&G Foods, Inc. BGS manufactures, sells and distributes high quality, shelf stable, frozen food and household products across the United States, Canada and Puerto Rico. The company boasts a diversified portfolio of 50 brands, many of which grab a fair share of the market in different regions. The company has a trailing four-quarter positive earnings surprise of 5.36%, on average. It is presently a #1 Ranked player. 

United Natural Foods, Inc.UNFI is the leading distributor of natural, organic and specialty food and non-food products in the United States and Canada. The company is gaining on the spike in demand, stemming from the coronavirus-led stockpiling. This apart, integration synergies related to SUPERVALU are aiding the company’s performance. In the past 30 days, two estimates for current-year earnings have moved north for the company. It presently flaunts a Zacks Rank of 1. 

The Hain Celestial Group, Inc.HAIN produces, distributes, markets and sells various natural and organic foods as well as personal care products with operations in North America and Europe. The company offers popular better-for-you groceries (non-dairy beverages and frozen desserts, flour and baking mixes, cereals, condiments, cooking oils, infant and toddler food, etc.), snacks and tea. It has a trailing four-quarter positive surprise of 9.94%, on average. The company is presently a Zacks #1 Ranked player. 

Campbell Soup CompanyCPB, together with its subsidiaries, is a worldwide manufacturer and marketer of high-quality, branded convenience food products. The company is benefiting from buoyant demand across its diverse brands owing to increased at-home consumption amid coronavirus. The industry entity has a trailing four-quarter positive earnings surprise of 8.87%, on average. It currently holds a Zacks Rank #2.

TreeHouse Foods, Inc.THS is a manufacturer of packaged foods and beverages with more than 50 manufacturing facilities across the United States, Canada and Italy servicing retail grocery, food away from home, and industrial and export customers. The company, which is currently a Zacks #2 Ranked player, manufactures a variety of shelf-stable, refrigerated, fresh products. The company has a trailing four-quarter positive earnings surprise of 8.48%, on average. 

 

Zacks’ Single Best Pick to Double

From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.

This young company’s gigantic growth was hidden by low-volume trading, then cut short by the coronavirus. But its digital products stand out in a region where the internet economy has tripled since 2015 and looks to triple again by 2025.

Its stock price is already starting to resume its upward arc. The sky’s the limit! And the earlier you get in, the greater your potential gain.

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The Hain Celestial Group, Inc. (HAIN) : Free Stock Analysis Report
 
Campbell Soup Company (CPB) : Free Stock Analysis Report
 
United Natural Foods, Inc. (UNFI) : Free Stock Analysis Report
 
TreeHouse Foods, Inc. (THS) : Free Stock Analysis Report
 
BG Foods, Inc. (BGS) : Free Stock Analysis Report
 
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