Deepening supply chain bottlenecks and rising energy and transportation costs have pushed food prices higher lately. However, strong demand for packaged and ready-to-cook food products with prolonged shelf life should allow food makers to handle rising input costs by passing them on to the customers. Also, rapid digitalization of operations and new product launches to keep pace with changing consumer tastes should benefit these companies substantially.
Investor interest in this consumer defensive industry is evident from the First Trust Nasdaq Food & Beverage ETF’s (FTXG) 4.3% gains over the past three months versus the SPDR S&P 500 Trust ETF’s (SPY) 10.4% loss. The global packaged food market is expected to grow at a 6.3% CAGR to $4.26 trillion by 2026.
