With few exceptions, beverage stocks tracked by BD underperformed the S&P 500 Index this year through the first three quarters of this year. Coca-Cola’s shares declined -4.3% as the company worked through a global structural reorganization and dug out of pandemic-related declines in the company’s massive away-from-home beverage business. The company also held back on marketing and advertising investment amid a global agency review and pandemic-related disruption. While shares of Keurig Dr Pepper and PepsiCo fell short of the +16% gain by the broader market, they did grow +6.7% and +1.4% respectively. Keurig Dr Pepper impressed some investors with its strong performance in carbonated soft drinks and hot coffee during the pandemic, while conservative profit forecasts and have kept some investors on the sidelines. As for PepsiCo, the company raised profit guidance in the period, instituted a new global sustainability program, and announced the divestiture of a majority stake in Tropicana and Naked juice brands to European private equity firm PAI Partners for $3.3 billion. The sector was weighed down by uncertainty over cost pressures and the ability to maintain margins.

WINNERS. Franchise bottler Coca-Cola Consolidated has been on an upswing this year as revenue and gross profit surged as costs were kept largely in check. Shares of National Beverage, maker of LaCroix sparkling water, jumped +24%, helped early last month by an earnings report that showed rising sales and strong pricing gains (see previous story for LaCroix sparkling water category gains). Coca-Cola Femsa’s US shares also outpaced the S&P 500 Index.

RETAILERS/DISTRIBUTORS. Among retailer stocks tracked by BD, Kroger posted a +27% gain and outperformed the broader market after providing strong earnings guidance and showing the chain can manage rising inflationary pressures. Shares of Kroger’s chief rival, Walmart, declined -3.3% as the retailer struggles with supply shortages. All other retailer stocks tracked by BD gained, with Target posting a +30% jump. As for distributors, shares of natural foods wholesaler United Natural Foods (UNFI) more than doubled this year as the company posted strong profit growth and guidance. That showed some pandemic sales gains for the wholesaler are sticking even as consumers return to more normal dining patterns outside the home. An shown in the table, BD quarterly tracks the following select beverage and retailer stocks.