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Buy These 3 Miscellaneous Food Stocks to Ride Out Industry Challenges
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The Zacks Food-Miscellaneous industry is facing ongoing challenges from inflation, cautious consumer spending and soft foodservice demand, leading to volume pressures and increased competition from private labels. Rising input and labor costs continue to weigh on margins, prompting companies to pursue productivity gains and supply-chain efficiencies.
Despite near-term headwinds, strong brand equity and innovation in health-forward, high-protein and low-sugar products remain key growth drivers. Companies like The J.M. Smucker Company ((SJM - Free Report) ), Lamb Weston Holdings, Inc. ((LW - Free Report) ) and United Natural Foods, Inc. ((UNFI - Free Report) ) are focusing on cost discipline and portfolio modernization, positioning themselves well for sustained long-term performance.
About the Industry
The Zacks Food-Miscellaneous industry consists of companies that manufacture and sell a wide range of food and packaged food items, such as cereals, flour, sauces, bakery items, spices and condiments, natural and organic food items and frozen products. Some companies also provide comfort food items, such as chocolates and ready-to-serve meals, soups and snacks. A few players are engaged in providing pet food products and supplements. Several food companies also offer organic and natural products. Companies operating in this space sell their products mainly through wholesalers, distributors, large retail organizations, grocery chains, mass merchandisers, drug stores and e-commerce service providers. Some also cater to foodservice channels, including restaurants, cafes and hotels. Others offer services to schools, hospitals and industry caterers.
Major Trends Shaping the Future of the Food Industry
A Challenging Market Landscape: The food industry remains under pressure from a difficult macro backdrop, marked by sticky inflation and cautious consumer spending. Elevated prices have continued to squeeze household budgets, prompting a clear trade-down toward value offerings and private-label alternatives at the expense of branded products. Meanwhile, softer traffic trends in quick-service and casual dining channels have weighed on foodservice sales in select markets. These dynamics have challenged volume recovery for several major food players. In response, companies are leaning into value-driven marketing, stepped-up promotions, and broader assortments of affordable pack sizes to protect share and sustain unit growth amid demand normalization.
Cost Pressures and Margin Management: Cost inflation continues to weigh on profitability across the food space. Persistent input cost volatility — spanning raw materials, labor, packaging and freight — has compressed margins despite earlier pricing actions. Additionally, ongoing investments in automation, digitalization and capacity expansion, while critical for long-term competitiveness, have added near-term expense headwinds. To offset these pressures, companies are doubling down on productivity initiatives, including supply-chain optimization, procurement savings and manufacturing efficiency programs. These efforts are aimed at improving cost leverage and driving incremental margin recovery in the quarters ahead, even as the broader inflationary environment remains a concern.
Brand Resilience and Portfolio Modernization: Strong brand equity continues to serve as a key differentiator in a highly competitive market. Leading players are reinforcing their portfolios through innovation and health-forward product development to align with evolving consumer preferences. Demand for high-protein, low-sugar and functional nutrition products continues to rise, fueling investment in new formulations and line extensions. Alongside innovation, companies are modernizing production capabilities and expanding into new consumption occasions to diversify revenue streams. These initiatives are helping companies strengthen customer loyalty, enhance pricing power and capture share in growth-oriented wellness segments. Sustained brand relevance and execution on innovation pipelines are likely to remain vital drivers of long-term growth.
Zacks Industry Rank Indicates Bleak Prospects
The Zacks Food-Miscellaneous industry is housed within the broader Zacks Consumer Staples sector. The industry currently carries a Zacks Industry Rank #185, which places it in the bottom 23% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates drab near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually losing confidence about this group’s earnings growth potential. Since the beginning of July 2025, the industry’s consensus earnings estimate for the fiscal year ended December 2025 has decreased 2.1%.
Let’s take a look at the industry’s performance and current valuation.
Industry vs. Broader Market
The Zacks Food-Miscellaneous industry has underperformed the S&P 500 and the broader Zacks Consumer Staples sector over the past year.
The industry has declined 17.5% over this period compared to the S&P 500’s growth of 16.7%. Meanwhile, the broader sector has dipped 3.1% in the said time frame.
One-Year Price Performance
Industry's Current Valuation
On the basis of forward 12-month price-to-earnings (P/E), which is commonly used for valuing consumer staples stocks, the industry is currently trading at 14.65X compared with the S&P 500’s 23.74X and the sector’s 16.49X.
Over the past five years, the industry has traded as high as 20.73X and as low as 14.65X, with the median being at 17.81X, as the chart below shows.
Price-to-Earnings Ratio (Past 5 Years)
3 Food Stocks to Keep a Close Eye On
Lamb Weston: This renowned frozen potato products company currently sports a Zacks Rank of 1 (Strong Buy). Lamb Weston’s “Focus to Win” strategy is fueling growth by emphasizing strong execution, customer engagement and innovation. The company is improving operational efficiency while expanding its presence across key channels in North America and international markets. LW’s restructuring and cost-saving initiatives are progressing as planned. You can see the complete list of today’s Zacks #1 Rank stocks here.
At the same time, ongoing investments in capacity, modernization and sustainability are strengthening Lamb Weston’s long-term competitiveness. The Zacks Consensus Estimate for LW’s current financial-year earnings per share (EPS) has risen by 9.4% to $3.14 in the past 60 days. Shares of Lamb Weston have rallied 13.7% in the past six months.
Price and Consensus: LW
United Natural Foods: The Zacks Rank #1 company’s natural and organic business continues to exhibit impressive growth, driven by heightened consumer demand for healthier and more sustainable products. UNFI’s Natural segment remains a core growth driver, delivering 9% growth in the fourth quarter of fiscal 2025, reflecting continued strength in better-for-you, specialty, multicultural and fresh categories.
United Natural Foods is tracking ahead of the multi-year financial roadmap introduced last year and now expects low single-digit average annual net sales growth from fiscal 2024 through 2027. The Zacks Consensus Estimate for UNFI’s current fiscal year EPS has risen from $1.53 to $1.90 over the past 60 days. Shares of this Providence, RI-based company have surged 40.8% over the past year.
Price and Consensus: UNFI
The J.M. Smucker: This Zacks Rank #2 (Buy) company is a leading marketer and manufacturer of consumer food and beverage products and pet food and pet snacks. The J.M. Smucker’s diverse brand portfolio and strong coffee unit remain central to its long-term stability. The company continues to demonstrate pricing power in coffee, supported by resilient demand for Folgers and Cafe Bustelo, while its International and Away-From-Home channels are benefiting from the growing appeal of Uncrustables and frozen handhelds.
Strategic moves such as cost savings initiatives, portfolio simplification and disciplined brand investment reinforce The J.M. Smucker’s operational efficiency. The Zacks Consensus Estimate for SJM’s current fiscal-year EPS has increased by a penny to $9.13 in the past 60 days. Shares of Orrville, OH-based company have dipped 0.4% in the past six months.
Price and Consensus: SJM
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Buy These 3 Miscellaneous Food Stocks to Ride Out Industry Challenges
The Zacks Food-Miscellaneous industry is facing ongoing challenges from inflation, cautious consumer spending and soft foodservice demand, leading to volume pressures and increased competition from private labels. Rising input and labor costs continue to weigh on margins, prompting companies to pursue productivity gains and supply-chain efficiencies.
Despite near-term headwinds, strong brand equity and innovation in health-forward, high-protein and low-sugar products remain key growth drivers. Companies like The J.M. Smucker Company ((SJM - Free Report) ), Lamb Weston Holdings, Inc. ((LW - Free Report) ) and United Natural Foods, Inc. ((UNFI - Free Report) ) are focusing on cost discipline and portfolio modernization, positioning themselves well for sustained long-term performance.
About the Industry
The Zacks Food-Miscellaneous industry consists of companies that manufacture and sell a wide range of food and packaged food items, such as cereals, flour, sauces, bakery items, spices and condiments, natural and organic food items and frozen products. Some companies also provide comfort food items, such as chocolates and ready-to-serve meals, soups and snacks. A few players are engaged in providing pet food products and supplements. Several food companies also offer organic and natural products. Companies operating in this space sell their products mainly through wholesalers, distributors, large retail organizations, grocery chains, mass merchandisers, drug stores and e-commerce service providers. Some also cater to foodservice channels, including restaurants, cafes and hotels. Others offer services to schools, hospitals and industry caterers.
Major Trends Shaping the Future of the Food Industry
A Challenging Market Landscape: The food industry remains under pressure from a difficult macro backdrop, marked by sticky inflation and cautious consumer spending. Elevated prices have continued to squeeze household budgets, prompting a clear trade-down toward value offerings and private-label alternatives at the expense of branded products. Meanwhile, softer traffic trends in quick-service and casual dining channels have weighed on foodservice sales in select markets. These dynamics have challenged volume recovery for several major food players. In response, companies are leaning into value-driven marketing, stepped-up promotions, and broader assortments of affordable pack sizes to protect share and sustain unit growth amid demand normalization.
Cost Pressures and Margin Management: Cost inflation continues to weigh on profitability across the food space. Persistent input cost volatility — spanning raw materials, labor, packaging and freight — has compressed margins despite earlier pricing actions. Additionally, ongoing investments in automation, digitalization and capacity expansion, while critical for long-term competitiveness, have added near-term expense headwinds. To offset these pressures, companies are doubling down on productivity initiatives, including supply-chain optimization, procurement savings and manufacturing efficiency programs. These efforts are aimed at improving cost leverage and driving incremental margin recovery in the quarters ahead, even as the broader inflationary environment remains a concern.
Brand Resilience and Portfolio Modernization: Strong brand equity continues to serve as a key differentiator in a highly competitive market. Leading players are reinforcing their portfolios through innovation and health-forward product development to align with evolving consumer preferences. Demand for high-protein, low-sugar and functional nutrition products continues to rise, fueling investment in new formulations and line extensions. Alongside innovation, companies are modernizing production capabilities and expanding into new consumption occasions to diversify revenue streams. These initiatives are helping companies strengthen customer loyalty, enhance pricing power and capture share in growth-oriented wellness segments. Sustained brand relevance and execution on innovation pipelines are likely to remain vital drivers of long-term growth.
Zacks Industry Rank Indicates Bleak Prospects
The Zacks Food-Miscellaneous industry is housed within the broader Zacks Consumer Staples sector. The industry currently carries a Zacks Industry Rank #185, which places it in the bottom 23% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates drab near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually losing confidence about this group’s earnings growth potential. Since the beginning of July 2025, the industry’s consensus earnings estimate for the fiscal year ended December 2025 has decreased 2.1%.
Let’s take a look at the industry’s performance and current valuation.
Industry vs. Broader Market
The Zacks Food-Miscellaneous industry has underperformed the S&P 500 and the broader Zacks Consumer Staples sector over the past year.
The industry has declined 17.5% over this period compared to the S&P 500’s growth of 16.7%. Meanwhile, the broader sector has dipped 3.1% in the said time frame.
One-Year Price Performance
Industry's Current Valuation
On the basis of forward 12-month price-to-earnings (P/E), which is commonly used for valuing consumer staples stocks, the industry is currently trading at 14.65X compared with the S&P 500’s 23.74X and the sector’s 16.49X.
Over the past five years, the industry has traded as high as 20.73X and as low as 14.65X, with the median being at 17.81X, as the chart below shows.
Price-to-Earnings Ratio (Past 5 Years)
3 Food Stocks to Keep a Close Eye On
Lamb Weston: This renowned frozen potato products company currently sports a Zacks Rank of 1 (Strong Buy). Lamb Weston’s “Focus to Win” strategy is fueling growth by emphasizing strong execution, customer engagement and innovation. The company is improving operational efficiency while expanding its presence across key channels in North America and international markets. LW’s restructuring and cost-saving initiatives are progressing as planned. You can see the complete list of today’s Zacks #1 Rank stocks here.
At the same time, ongoing investments in capacity, modernization and sustainability are strengthening Lamb Weston’s long-term competitiveness. The Zacks Consensus Estimate for LW’s current financial-year earnings per share (EPS) has risen by 9.4% to $3.14 in the past 60 days. Shares of Lamb Weston have rallied 13.7% in the past six months.
Price and Consensus: LW
United Natural Foods: The Zacks Rank #1 company’s natural and organic business continues to exhibit impressive growth, driven by heightened consumer demand for healthier and more sustainable products. UNFI’s Natural segment remains a core growth driver, delivering 9% growth in the fourth quarter of fiscal 2025, reflecting continued strength in better-for-you, specialty, multicultural and fresh categories.
United Natural Foods is tracking ahead of the multi-year financial roadmap introduced last year and now expects low single-digit average annual net sales growth from fiscal 2024 through 2027. The Zacks Consensus Estimate for UNFI’s current fiscal year EPS has risen from $1.53 to $1.90 over the past 60 days. Shares of this Providence, RI-based company have surged 40.8% over the past year.
Price and Consensus: UNFI
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The J.M. Smucker: This Zacks Rank #2 (Buy) company is a leading marketer and manufacturer of consumer food and beverage products and pet food and pet snacks. The J.M. Smucker’s diverse brand portfolio and strong coffee unit remain central to its long-term stability. The company continues to demonstrate pricing power in coffee, supported by resilient demand for Folgers and Cafe Bustelo, while its International and Away-From-Home channels are benefiting from the growing appeal of Uncrustables and frozen handhelds.
Strategic moves such as cost savings initiatives, portfolio simplification and disciplined brand investment reinforce The J.M. Smucker’s operational efficiency. The Zacks Consensus Estimate for SJM’s current fiscal-year EPS has increased by a penny to $9.13 in the past 60 days. Shares of Orrville, OH-based company have dipped 0.4% in the past six months.
Price and Consensus: SJM