Food, beverage and restaurant stocks didn't move together in the first half of 2026.
Inflation has cut into consumer spending power in the U.S. By May, real disposable income was still below its January level.
Consumers still have to eat and drink, but they are becoming increasingly selective about where to spend. Weak demand in the U.S., in contrast to better sentiment in some international markets, added to the uneven picture. Across the group, the first half produced a sharp divide between winners and laggards.
Within packaged food, soda companies outshone snack sellers as beverage demand held up better. Shares in Coca-Cola and Keurig Dr Pepper both gained more than 16% in the first half, while chocolate giant Hershey and PepsiCo, a significant portion of whose revenue comes from snacks, posted 3.6% and 5.7% losses, respectively.
Mondelez International might be the exception as investors appeared more bullish on its global snacking exposure. The stock gained more than 7% in the first half, bouncing back from losses in the second half of 2025.
The laggards were the familiar pantry names. General Mills lost 25% in the first half, while Conagra Brands fell 22% as investors remain worried about weak consumer spending and competition from private labels. But there is hope of improvement: General Mills's revenue grew 1% from a year ago in the latest quarter, the first time in more than a year.
Energy drinks have been a fast-growing corner of the beverage sector. Monster Beverage shares gained 25% in the first half on the back of strong sales and earnings growth, especially in the international markets. Its rival Celsius, however, tumbled 36% as investors became cautious about the stock's rich valuation and worried that growth was mostly driven by its acquisition of Alani Nu.
The same divide is seen among alcohol stocks. Anheuser-Busch shares rallied 29% as its mega beer brands continued to grow in various global markets. Constellation Brands, on the other hand, was only up 1%. The company is more exposed to the U.S. market, where investors worry about weaker alcohol demand due to inflation pressure and shifting health and diet trends.
In the restaurant sector, coffee chains were the brighter spots, while pizza chains struggled. Fast casual restaurants, meanwhile, showed a split among themselves.
Starbucks stock gained 21% in the first half as its turnaround story -- under CEO Brian Niccol -- continued. Starbucks had spent much of the prior year fighting weaker traffic. The stock's rebound reflected investor confidence in Niccol's "Back to Starbucks" plan.
Dutch Bros, meanwhile, offers a growth story that is rare in the space. The brand is still early in its national rollout with solid traffic growth and unit expansion. Investors have rewarded that combination. Shares are up 17% in the first half. The company has raised its 2026 guidance for revenue and store openings.
Pizza looked less appetizing. Stock in Domino's Pizza, the leader in the category, fell by 29% in the first half with its sales under pressure in both domestic and international markets. Its peers were struggling as well. Papa John's stock fell 5% in the first half, while Yum! Brands, owner of Pizza Hut, decided to sell the chain after a strategic review.
Mediterranean fast-casual chain Cava gained 34% in the first half as it continued to post revenue growth, driven not only by new store openings but also same-restaurant sales growth. Shake Shack, meanwhile, tumbled 31%. Although total revenue increased by 14.3% year over year in the latest quarter, the company posted a net loss and cut its sales outlook.
Write to Evie Liu at evie.liu@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
July 02, 2026 17:52 ET (21:52 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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