money 5 foods people are still devouring during the COVID-19 pandemic
Packaged food stocks have become spoiled trades thus far in 2021 as Wall Street frets about a growth slowdown later this year with people becoming more mobile after getting their COVID-19 vaccine.
Year-to-date, shares of beverage giants Coca-Cola and PepsiCo are down 2.1% and 3.8%, respectively despite each putting up impressive first quarters this month and solid outlooks. The S&P 500 is up a tasty 11% in 2021, by comparison.
Meanwhile, food company stocks have fallen out of favor with investors, too. Frozen food behemoth Conagra has seen its stock only gain 2% this year. Campbell Soup shares are down 1.2%. Spam maker Hormel shares have shed 1%.
Despite the unsavory performance of their stocks, Big Food is still seeing some very large increases in demand for their products amidst the pandemic. Downbeat Wall Street may not want to hear it right now, but the latest sales gains in things like cereal suggest eating-at-home won't experience a drastic falloff later this year and into 2022 as human mobility returns.
"The COVID-19 pandemic has presented an incredible consumer trialing opportunity. Our innovation and marketing approach has enabled us to secure not only strong trial, but also strong repeat rates and market share gains. Based on the evidence we are seeing, we expect to emerge from the pandemic with structurally higher volumes and share, driven by the stickiness of the COVID-driven demand," opined Conagra Brands CEO Sean Connolly on the company's early April earnings call.
Here are five foods that consumers are still devouring as the pandemic rages on. And they may continue to do so for the foreseeable future.
Frozen food
The maker of Healthy Choice frozen dinners and Birds Eye frozen veggies saw another quarter of huge demand to kick off the year. Conagra's frozen food retail sales surged 12% year-over-year for the quarter ended Feb. 28, helped by COVID-19 demand but also investments in making better-tasting products. The company said sales growth "accelerated" from the prior quarter in many of its frozen food brands.
"The adoption of remote work provides a structural increase in the demand for frozen food compared to pre-COVID levels. Importantly, some aspects of the remote workforce adoption are expected to be permanent and this shift to remote work has the biggest impact on lunch and dinner occasions, the meals with the largest exposure to frozen foods," said Conagra Brands CEO Sean Connolly.
Cookies
After a hearty frozen food dinner, consumers appear to still be reaching for a cookie (or 12) for dessert, judging by the sales results at Oreo maker Mondelez.
First quarter sales for Oreo rose by a high-single digit percentage, the company revealed in its earnings release on Tuesday. Sales for the Chips Ahoy! brand increased by mid-single digits in the quarter.
"All of the ingredients are there for us to be able to have a great year," Mondelez CFO Luca Zaramella told Yahoo Finance Live.
Cereal
Before a day chock full of frozen food and cookies begins, one is likely still pouring a bowl of Cheerios at five o'clock in the morning.
Cheerios and Twix maker General Mills saw U.S. cereal sales rise 9% for the quarter ended Feb. 28.
"We really believe that our sales both in terms of pounds and pricing is going to be higher than it was pre-pandemic, and we are seeing that in the first couple of weeks of the month and we are confident the consumer behaviors aren’t changing as quickly as some would think," General Mills CEO Jeff Harmening told analysts on a late March earnings call.
Fast-food hamburgers
A trip to fast-food drive-thrus continue to be en vogue with people during the pandemic. And it's likely they are reaching for a hamburger.
First quarter U.S. same-store sales at McDonald's and Burger King rose 13.6% and 6.6%, respectively.
Restaurant Brands CEO Jose Cil told Yahoo Finance Live diners are also loading up on the chain's dollar menu items. Restaurant Brands is the parent company of Burger King.
Chocolate
Nothing like soothing one's pandemic fears by downing a few pieces of chocolate.
Sales for Mondelez-owned Cadbury surged by a double-digit percentage in the first quarter. Mondelez CFO Luca Zaramella told Yahoo Finance Live people continue to consume high levels of food at home.
The upbeat tone was similar at Cadbury rival Hershey in the first quarter. Hershey's sales in North America rose 12.8%.
"We're in a unique period right now of dual strength. We're seeing continuing strong at-home consumption really carrying over from last year," Hershey CFO Steve Voskuil told Yahoo Finance Live.
A version of this article was first published on April 28, 2021.
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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