Working remotely, learning online and having home-cooked food have become the new normal as people continue to adjust their lives in home confinement, forced by shelter-in-place requirements due to COVID-19.
Moreover, isolation measures made people discover a new side to themselves in terms of cultivating new hobbies. Now they indulge more in indoor activities like cooking, home decor and doing chores, which otherwise were left unattended because of their hectic work schedules.
Given that people are taking all possible precautionary measures, eating and cooking at home gained supreme prominence since the coronavirus spread its tentacles. While home prepared food is a safer proposition than orders placed outside, people also find it way cheaper and an ideal pastime to unwind themselves.
Realizing that there is still no sure-shot cure to COVID-19 sickness, people will continue to stay at home and cook in their kitchens. This, in turn, will likely drive demand for companies involved in food industry.
Coronavirus Outbreak Continues
On Jun 26, the United States recorded the highest single-day spike in coronavirus cases since its outbreak in mid-April with the count crossing the 45,000 mark. In addition to setting the all-time record for the maximum jump in single-day cases, 11 states reportedly broke records for the average number of cases registered daily over the last week.
With the economy reopening during the unlock phase, the country once again started witnessing a spurt in cases that stoked fears in people’s minds. Although the government already indicated that another lockdown is quite unlikely as the economy needs to get back on its feet, it won’t come much as a surprise if people are found crawling back to their residences one more time. Apprehending this, it is quite possible that individuals restart hoarding grocery and other food ingredients in advance to continue rustling up recipes from the comforts of their home.
Cooking at Home Here to Stay
Stay at home became a war cry to flatten the curve in these uncertain times. Amid this unprecedented crisis, people took up cooking and baking as a form of recreation to amuse themselves and their family. This also acted as a destresser from the pandemic woes. Per a new study by food and beverage communications firm HUNTER, as Americans get attuned to a homebound lifestyle, their confidence in pantry management soared by several notches with many predicting to carry on with their culinary habits post the subsiding of COVID-19 crisis.
According to HUNTER’s consumer survey, more than half of Americans who are cooking (constituting 51%) will reportedly continue with this leisurely pursuit even after the coronavirus dies down. Prime reasons for cooking at home include saving up money, eating healthy, trying new dishes, and finding an outlet for relaxation.
Management at McCormick, one of the leading players in the food industry, observed a marked improvement in the company’s second-quarter performance, driven by the substantial surge in demand for its consumer products. This evident from the fact that consumers savored rich, authentic flavors and wholesome ingredients with more time devoted to cooking at home. It also confirmed that it expects durable growth from this rising frequency in consumer cooking at home.
We suggest four Food-Miscellaneous stocks worth considering in the present-day world on lockdown as there is no immediate sign of a vaccine or cure to fight the virus.
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 has been gaining traction from burgeoning demand, stemming from the coronavirus-led panic buying of essential items. Demand for United Natural’s products shot up in mid-March and remained high, thereby boosting its sales and earnings in the third quarter of fiscal 2020. These trends continued in the fiscal fourth quarter with wholesale net sales for the first four weeks of the quarter climbing approximately 11%. United Natural’s ability to cater to solid demand amid the pandemic chaos reflects its robust market position and the pivotal role it plays in North America’s food supply chain. The company expects demand for its natural, fresh and conventional products to remain strong.
The company’s expected earnings growth rate for the current year is 20.19%. The Zacks Consensus Estimate for current-year earnings has been revised 14.7% upward over the past 30 days. United Natural currently has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Hain Celestial Group HAIN produces, distributes, markets and sells various natural and organic foods as well as personal care products with operations in North America and Europe. Recently, the company reported solid third-quarter performance coupled with a smooth transformation plan and at augmented food-at-home consumption trend amid the coronavirus pandemic. Management projects all profit metrics for the fiscal 2020 to surpass the earlier-issued guided ranges.
The company’s expected earnings growth rate for the current year is 19.7%. The Zacks Consensus Estimate for current-year earnings has been raised 8.2% over the past 60 days. Hain Celestial has a Zacks Rank of 1, currently.
BG Foods, Inc. BGS has been benefiting from consumers’ rising demand amid coronavirus-led stockpiling. Besides, the company is gaining on pricing efforts and buyouts. These upsides aided the first-quarter 2020 performance wherein the top and the bottom line rose year over year and beat the consensus mark. B&G Foods has been witnessing a rapid buoyancy in demand since the second half of March 2020, courtesy of the coronavirus-led stacking and higher at-home consumption rate. Management informed that solid retail consumption was a major catalyst in the quarter.
The company’s expected earnings growth rate for the current year is 31.1%. The Zacks Consensus Estimate for 2020 earnings has moved 28.7% north over the past 60 days. BG Foods presently sports a Zacks Rank of 1.
McCormick & Company MKC offers spices, herbs, extracts, seasoning blends, sauces, marinade, and specialty foods to the consumer food market. It also sells seasoning blends, natural spices and herbs, wet flavors, coating systems and compound flavors to food manufacturers and food service customers.
During the second quarter, the shift in consumer behavior to cooking and eating more at home spurred significant growth in demand for the company’s consumer segment. This at-home consumption fueled growth for the packaged food and the flavor solutions segment.
The company’s expected earnings growth rate for the current year is 1.5%. The Zacks Consensus Estimate for current-year earnings has moved 2.5% north over the past seven days. McCormick presently carries a Zacks Rank of 2.
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