Food prices outpace overall inflation again - will these stocks benefit?
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Consumer prices rose 3.2% in July in comparison to last year to come slightly cooler than the 3.3% pace expected by economists. Core CPI was up 4.7% year-over-year and 0.2% higher on a month-to-month view.
Overall, food prices were up 4.9% in July from a year ago and tracked 0.2% higher from June. Some of the food categories that are still showing elevated levels of inflation include bread (+9.5% Y/Y), flour (+8.5%), milk (+11.0%), frozen fruits and vegetables (+11.8%), candy (+11.0%), and apples (+7.5%). Meanwhile, the broad category that includes meat, poultry, fish, and eggs showed a 0.2% year-over-year drop. Household staples such as milk, bacon, butter, and eggs prices all showed a decline in prices from a year ago.
What to watch: The list of packaged food and beverage companies that have seen pricing power boost their bottom lines includes TreeHouse Foods (THS), SunOpta (STKL), Lamb Weston (LW), WestRock Coffee Company (WEST), Kraft Heinz (KHC), J.M. Smucker (SJM), BellRing Brands (BRBR), Sovos Brands (SOVO), MGP Ingredients (MGPI), Post Holdings (POST), General Mills (GIS), Campbell Soup (CPB), Lifeway Foods (LWAY), Lancaster Colony (LANC), Bridgford Foods Corporation (BRID), Kellogg (K), ConAgra Brands (CAG), Celsius Holdings (CELH), Vita Coco (COCO), PepsiCo (PEP), Coca-Cola (KO), and National Beverage (FIZZ). Some food and beverage sellers kept the pricing power, even with certain commodity and transportation costs fading. Walmart (WMT), Target (TGT), Kroger (KR), Albertsons (ACI), Sprouts Farmers Market (SFM), and Costco (COST) could also benefit if food price increases remain sticky in key categories.
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