A number of companies in the food space had quite a decent year, thanks to favorable consumer demand as well as strength in their strategic growth initiatives. The companies have been benefiting from a rebound in the foodservice channel, with things opening up and Americans heading out. With curbs lifted, traffic has been picking up at restaurants, cafes and other foodservice joints, thus benefiting companies catering to them.
That being said, retail demand has also been above the pre-pandemic levels though it has declined from the year-ago period’s spike. This is because at-home consumption remains elevated as a number of Americans have cultivated cooking and baking at home as a new habit. Certainly, these upsides work well for companies offering packaged food and snacks, ready-to-cook meals, confectionery goods, meat-based food offerings as well as companies offering natural food ingredients. To make the most of these trends, companies have been undertaking robust efforts such as innovation, product upgrades and portfolio refinement via prudent buyouts and divestitures. Some companies have also been focused on making capacity expansions and automation technology investments to enhance efficiency in their operations. Apart from these, food companies have been undertaking efforts to resonate with consumers’ changing tastes and preferences. Speaking of which, these companies have been coming up with organic and nutrient-rich food options as health and wellness have gained further importance amid the pandemic. Also, companies have been developing their digital capacity as well, with online shopping gaining prominence. All said, we have used the Zacks Stock Screener and come up with three robust food stocks. These stocks have a Zacks Rank #1 (Strong Buy) or #2 (Buy), have a market cap of at least $1 billion and have returned more than 20% so far this year. Encouragingly, these look well-positioned for 2022. Image Source: Zacks Investment Research 3 Stocks to Binge On MGP Ingredients, Inc. ( MGPI Quick Quote MGPI - Free Report) is worth relishing. This producer and supplier of distilled spirits, and specialty wheat proteins and starch food ingredients, currently sports a Zacks Rank #1 (Strong Buy). Shares of the company have rallied 85% in the year-to-date period. You can see the complete list of today’s Zacks #1 Rank stocks here. The Zacks Consensus Estimate for MGP Ingredients’ next financial-year sales and earnings per share (EPS) suggests growth of 13.2% and 9.6%, respectively, from the year-ago period’s figures. MGPI has a trailing four-quarter earnings surprise of 117.6%, on average. The company’s Ingredient Solutions segment has been gaining on robust demand for plant-based proteins as well as starches. The company’s diversified product assortment and strong customer base keep it well placed for continued growth. Sanderson Farms, Inc. ( SAFM Quick Quote SAFM - Free Report) , which produces, processes, markets, and distributes fresh, frozen, and prepared chicken products, is also a lucrative pick. This Zacks Rank #1 company’s bottom line has outperformed the Zacks Consensus Estimate by a wide margin in the trailing four quarters, on average. Shares of Sanderson Farms have moved up 44.7% in the year so far. The Zacks Consensus Estimate for SAFM’s next financial-year sales and EPS suggests growth of nearly 1% and 18.1%, respectively, from the year-ago period. The company has been benefiting from higher demand and prices for products sold to foodservice customers as well as demand strength for products sold to retail grocery store customers. Additionally, export demand has been favorable. The company’s focus on investing in boosting offerings and overall product processing capacity has also been working well. Investors can count on United Natural Foods, Inc. ( UNFI Quick Quote UNFI - Free Report) . This Zacks Rank #2 company distributes natural, organic, specialty, produce, and conventional grocery and non-food products. United Natural Foods has a trailing four-quarter earnings surprise of 35.4%, on average. The company has been focused on its three-pronged strategy based around deepening its penetration with existing customers, introducing owned brands to new customers as well as channels and undertaking customer-friendly innovations. United Natural is also benefiting from e-commerce strength, thanks to increased digital solutions offered by the company. The Zacks Consensus Estimate for UNFI’s next financial-year sales and EPS suggests growth of 3.4% and nearly 7%, respectively, from the year-ago period’s figures. Shares of United Natural have soared almost 217% in the year so far.