Robert F. Kennedy Jr. The Health and Human Services Department nominee could push policies that would give some food and beverage stocks a tailwind, despite pressure from the industry since word of his potential nomination. “RFK’s knock-on effect could be an extension of an already strong trend toward healthy eating,” Wells Fargo stock analyst Edward Kelly wrote in a note Monday. “This can increase the consumption of fresh, natural and organic products with higher margins.” Kennedy is a vaccine skeptic and opposes artificial ingredients. These attitudes have led to a recent pullback in biotech stocks, and food and beverage stocks have also come under pressure in recent days over President-elect Donald Trump’s plans to appoint Kennedy to lead HHS, which oversees the Food and Drug Administration. Packaged foods from companies such as PepsiCo and Lamb Weston use artificial ingredients. As Kennedy regularly denounces processed foods, there is concern that companies will have to reformulate their products to meet the new standards. Pepsi shares are down nearly 5% in the past week, while Lamb Weston shares are down about 7%. Bank of America analyst Bryan Spillane cited flavor and seasoning company McCormick as a possible beneficiary if Kennedy is confirmed, and said food and beverage manufacturers could turn to spices to offset the loss of artificial flavors. McCormick shares are up more than 9% in 2024. Spillane also said the company could benefit from targeting its products in more visible sections of grocery stores, specifically closer to protein and produce, if Kennedy’s health improves. eating campaign MKC YTD Mt McCormick stock. To be sure, McCormick’s spices sometimes contain processed ingredients like sunflower oil and so-called natural flavors, a very broad term that, according to current FDA guidelines, can cover a wide range of ingredients used in trace amounts. Elsewhere, Wells Fargo listed Kroger and Albertsons groceries as stocks to watch, as both have strong fresh food offerings and are trading at reasonable valuations. Both Kroger and Albertsons offer a wide range of well-positioned products, even as consumers face tough inflation, which could be another tailwind, according to Kelly. He maintains an overweight position on both stocks. KR ACI YTD Mt. Bank of America Lists Kroger and Albertsons as Potential Beneficiaries, RFK Jr. If confirmed to lead HHS. The analyst also pointed to Sprouts Farmers Market as another potential beneficiary, but expressed skepticism about the stock’s expensive valuation. Sprouts stock has nearly tripled since the start of the year. Kroger shares have advanced more than 26% in 2024, while Albertson shares have retreated about 17%. Conditions have been affected by uncertainty surrounding the pending merger. Kroger agreed to buy Albertsons in late 2022 for nearly $25 billion, but the combination has come under scrutiny from regulators. Investors hope Trump’s promise of looser regulations will allow the deal to close.
