Hormel Foods is one of America’s leading food companies. It operates in the food processing industry and specializes in pork, ham, spam, and sausage products. Hormel also sells chicken, beef, and lamb products. Hormel owns the famous peanut butter brand called Skippy. Food businesses are relatively stable and somewhat less sensitive to economic cycles. They were quite resilient through the pandemic months as well. The food industry, in general, is a mature industry. Growth does not come from an expanding market size. Rather, the key for many of the larger companies is to now focus on select categories that seem to grow well for a finite amount of time. Once the trend has run its course, a new category arrives. Having a strong brand and being able to innovate and distribute products quickly is key. Investors looking to buy food stock for future growth will want to think about these factors before making a decision.
How Badly was Hormel Foods Affected During The Pandemic?
Hormel Foods was not completely immune to the pandemic. It did have operational disruptions during 2020. For example, in mid-April 2020, the company was forced to close down its Rochelle, Illinois plant because 24 workers there tested positive. That plant employed 800 workers. Within a few days, the company had to close three of its plants in Kansas as one worker tested positive. The company also had to close its facilities in Minnesota and Texas as a few workers at those locations tested positive. The Minnesota facility employed 1200 workers. So, the disruption there was quite significant. On the positive side, the demand for spam grew at double digits as people began stocking up their pantry with supplies to see out shelter-in-place conditions. Disruptions or no disruptions, Hormel Foods continues to be counted among the best food stocks 2021.
Hormel Foods’ stock trades on the New York stock exchange. Its ticker symbol is HRL. The stock closed at $47.34 on 23rd July 2021. It was down 0.9% over the preceding month. However, the stock was in the green with a 2.2% growth year-to-date.