With easing concerns over the severity of the COVID-19 omicron variant, the food distribution industry’s prospects are improving. The cost of food in the United States increased 7% year-over-year in January 2022, according to the U.S. Bureau of Labor Statistics. It is the highest food inflation since August of 1981. Food distribution stocks are attracting investors' attention due to record-high food prices, which are primarily caused by supply shortages. This is partly evident in the Invesco Dynamic Food & Beverage ETF’s (PBJ) 2.1% gains over the past three months, compared to the SPDR S&P 500 Trust ETF’s (SPY) 6.1% loss.
Because the shortage of food commodities is expected to persist, and demand continues to rise, the food distribution industry should keep growing. Furthermore, technological advancements in food distribution should drive the industry’s long-term growth.
