Panic Buying Spurs Investors to Stock Up on Food Shares

(Bloomberg) -- Shares of Campbell Soup Co., Conagra Brands Inc. and other packaged food companies rose on Monday -- an investor reaction to widespread reports that shoppers are stocking up their pantries as the coronavirus rapidly spreads across the world.

“Anticipation of disruption is driving stockpiling now,” Piper Sandler analyst Michael Lavery said in a research note. “We believe from anecdotes that consumers are already stocking up on non-perishable food, as grocery stores see surges in traffic and larger baskets.”

Campbell rose 6.3% on Monday, the stock’s biggest daily gain in almost nine months. Most packaged-food makers also rose and outpaced the gain of the S&P 500, including Conagra, General Mills Inc. and Kellogg Co. The S&P 500’s packaged food index, which also includes companies such as Hershey Co. and Mondelez International Inc., rose 4.7%, the most since 2016.

Investors are looking for potential beneficiaries from the outbreak of coronavirus that has sparked alarm as it spreads beyond its origin in China.

“We believe U.S. consumers are preparing to be able to stay at home for extended periods, and some food categories may benefit more than others,” Lavery said.

Food companies’ advance was joined by a broader group of retailers and consumer-goods companies. Clorox Co., the maker of sanitary wipes and cleanings sprays, rose 7.9% -- the most since 2011 -- while Costco Wholesale Corp. jumped 10% -- the most since 2008.

Data compiled by Nielsen for week ended Feb. 22 shows that sales of staples are surging from a year earlier. Hand sanitizer sales jumped 54%, while medical-mask sales rose 78%. Frozen-fruit sales, meanwhile, increased 7%, and dried beans were up 10%

To contact the reporters on this story: Jonathan Roeder in Chicago at jroeder@bloomberg.net;Deena Shanker in New York at dshanker@bloomberg.net

To contact the editor responsible for this story: Sally Bakewell at sbakewell1@bloomberg.net

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