KANSAS CITY — In 2022 the Grain-Based Foods Share Index outperformed wider indices, some of which dropped to lows not seen since the recession that began in 2008. While the broader market lost ground, the GBF index climbed 8.4% to achieve a record high. Of the 22 companies tracked by Milling & Baking News, 11 posted double-digit gains and 5 lost share value in the year.

Calculated by Milling & Baking News based on share price performance of companies with significant grain-based foods businesses, the GBF index ended 2022 at 34356, up 2669 points, or 8.4%, from 31687 at the end of 2021. Last year’s advance was narrower than the gain of 13.2% in 2021 but wider than the 3.7% gain in 2020.

Grain-based share prices largely increased, compared with the Standard & Poor’s 500 index, which ended 2022 down 19%, its largest decline since 2008.The Dow Jones average of industrial shares dropped 8.8% in 2022, while the tech-heavy Nasdaq composite ended the year down 33%.

The 8.4% increase in the GBF index posed a measurable contrast to the consumer staples sector of the S&P 500, which was down 3.2% in the year. Within in the S&P consumer staples segment, grain-based foods shares were nearly as strong as the sub-segment food products, up 9%, but bested beverages, up 3.2%; tobacco, up 2.7%; food and staples retailing, down 11.5%; household products, down 8%; and personal products, down 31.4%.

 When compared with the S&P 500 sectors, the GBF index outperformed all except energy, which ended the year with a gain of 59%.

Consumer staples was the third highest performer of the S&P 500 segments, including utilities, down 1.4%; health care, down 3.6%; industrials, down 7.1%; financials, down 12.4%; materials, down 14%; information technology, down 28.9%; real estate, down 28.5%; consumer discretionary, down 37.6%; and communication services, down 40.42%.

Among those companies on the GBF index, 17 posted share gains in 2022, and 5 companies lost share value over the course of the year. Within the index, CPG companies made some of the widest gains since the previous year. Of the top 10 performing companies in 2022, 7 were CPG companies, compared with 2021, when 5 of the 6 highest performers were ingredient companies.

The leading performer in the index in 2022 was ADM, Chicago, up 37%. ADM had been climbing the GBF index for the last three years. It was the fourth best performer in 2021, up 34%, the tenth best performer in 2020, up 9%, and 16th in 2019, up 13%. The company kicked off 2022 with a 53% leap in earnings in the first quarter. In an Oct. 25, 2022, conference call to discuss third-quarter results, Juan Luciano, chief executive officer, said demand for plant proteins contributed to ADM’s growth.

“Both sustainability and food security are powering our growth in nutrition, including our continued investment in alternative proteins,” Mr. Luciano said. He linked the company’s performance to the fact that its investments have been aligned with global trends.

Campbell Soup Co., Camden, NJ, came in second among grain-based foods companies in 2022, jumping 31%. The steep gains represented a turnaround from 2021, when Campbell Soup had the second-widest share price decline, down 10.2%. In the company’s first quarter, the Snacks division sustained strong momentum, gaining share in several sub-categories. Management cited the benefits of improved supply chain performance. In a presentation to analysts on Dec. 7, 2022, Mark Clouse, president and CEO, said, “We had an impressive quarter as our brands rapidly responded to the recovery of supply and increased investment with accelerated top-line growth and share improvement. This (strong sales performance) also supports the historical learning that consumer snacking behavior is very resilient and relevant in tough economic environments.”

Slipping two places on the GBF index from 2021, MGP Ingredients, Inc., Atchison, Kan., was the third-best performer, up 25%. The company’s previous-year gain of 81% had ended a three-year slump. Shares of the ingredient company were down 3% in 2020, down 15% in 2019 and down 26% in 2018. Speaking to analysts in an Aug. 4 conference call, David J. Colo, president and CEO, said the company was pleased with its specialty wheat starches and proteins business.

“Similar to last quarter, the increase in sales was primarily due to higher average selling prices of specialty wheat starches and proteins,” Mr. Colo said. “We are confident that our extensive project pipeline for these products along with further optimization of the segment product mix to meet our customers’ needs will drive long-term growth for this segment.”

The company’s 2022 performance showed steady increases throughout the year, peaking in November after the release of third-quarter results, which reflected strong demand for branded spirits, including premium-plus American whiskey and tequila offerings.    

The fourth-best performer of 2022 was General Mills, Inc., Minneapolis, up 24%. The previous year, General Mills came in tenth with a share price climb of 15%. The company’s shares advanced 10% in 2020 and 38% in 2019. As was the case with several CPG companies, shares of General Mills reached an apex in the final few weeks of 2022 trading. Throughout the year, General Mills continued to face challenges in its supply chain. During a Dec. 20 conference call with analysts to discuss second-quarter results, Kofi Bruce, chief financial officer, said the company was working to return its attention to holistic margin management practices.

After sustaining price declines the previous three years, TreeHouse Foods, Inc., Oak Brook, Ill., reclaimed territory on the GBF index to land fifth in 2022, up 22%. TreeHouse shares in 2021 were down 4.6%, in 2020 down 12% and in 2019 down 4%. In August, TreeHouse announced the divestiture of 11 categories in its meal preparations business. TreeHouse said the divestiture would reduce complexity by removing 11 categories, 14 plants, 5,000 stock-keeping units and 1 ERP system from its portfolio.

“In addition to strengthening our financial profile, the transaction improves our strategic focus on higher-growth, higher-margin categories,” said Steven Oakland, president and CEO, during a conference call with analysts on Aug. 11. 

Westerville, Ohio-based Lancaster Colony Corp. followed its previous pattern of back-and-forth performance with a 19% advance in 2022. In 2021, the company’s shares fell 10% after gaining 15% in 2020 and falling 10% in 2019. During a November conference call with analysts to discuss first-quarter results, Thomas Pigott, CFO, said gains by Sister Schubert’s dinner rolls were strengthening the company’s retail business.

Shares of The J.M. Smucker Co., Orrville, Ohio, rose 17% in 2022, moving the company to seventh in the GBF index. In 2021 Smucker ranked eighth with a gain of 18%. Smucker shares were up 11% in both 2020 and 2019. In May, the company issued a voluntary recall of Jif peanut butter products. During the year, Smucker expanded manufacturing capacity for Uncrustables at its Longmont, Colo., facility and broke ground on a new facility in McCalla, Ala., to produce its signature frozen sandwiches. At the company’s investor day in December, the company announced sales of Uncrustables reached $511 million, a year ahead of the company’s target to pass the $500 million mark.

Advancing to eighth place from the middle of the pack, shares of Kraft Heinz Co., Chicago, gained 13%. In 2021, Kraft Heinz took fifteenth place on a 4% share increase. In the second quarter of 2022, Kraft Heinz transferred ownership of its potato manufacturing plant in Ontario, Ore., to Simplot Food Group. The agreement established Boise, Idaho-based Simplot as the exclusive manufacturer and supplier of the Ore-Ida brand, which is owned by Kraft Heinz.

Conagra Brands, Inc., Chicago, saw its share price climb 13% to place ninth in 2022 following a loss of 6% the previous year. In 2020 the company’s shares advanced 6%. In 2019 Conagra’s stock price rose 60%, placing it second on the GBF index that year. In 2022, a sharp rise in cost of goods pressured Conagra’s earnings.

“While we had planned for high inflation, it was higher than we anticipated,” said Sean Connolly, president and CEO, during a July conference call. “Our cost of goods increased 16% in fiscal ‘22, far higher than the 9% we anticipated.”

Rounding out the top 10 performers of 2022 was Hostess Brands, Inc., Kansas City, up 13%. A year earlier, Hostess Brand’s share price rose 39%, landing the company in third place on the index in 2021. That increase followed a 1% gain in 2020 and a 33% advance in 2019. Even as Hostess Brands continued to encounter pockets of supply chain fragility and elevated cost inflation throughout the year, the company delivered its eleventh consecutive quarter of at least 9% revenue growth and its sixth consecutive quarter of double-digit earnings growth in the third quarter ended Sept. 30, 2022. Andrew Callahan, president and CEO, attributed results to the company’s position in the indulgent sweet snacking segment, one of the largest and fastest-growing segments within the macro snacking category.

Among companies experiencing share price setbacks in 2022, those of Parsippany, NJ-based B&G Foods, Inc. fell most sharply, down 64%. In 2021 shares of B&G Foods advanced 11%. Plagued by compounding issues throughout 2022, B&G Foods’ share prices steadily declined. In June the company announced it was restructuring into four business units.

“The business unit structure will also push accountability and multi-function responsibility down to more closely managed parts of the complex B&G Foods portfolio — improving the speed and clarity of decision-making to deliver growth and financial performance,” said Casey Keller, president and CEO.

B&G Foods sustained a loss of $59.6 million in the third quarter ended Oct. 1, 2022, which compared with net income of $20.7 million in the prior-year period. In November, the company said it was seeking to sell its Back to Nature business.

The Hain Celestial Group, Lake Success, NY, experienced the second widest share price decline in 2022, down 62%. A year earlier Hain Celestial stock prices rose 6%, placing it 14th in the 2021 GBF index. In his discussion of quarterly results in May, Chris Bellairs, CFO, said, “We experienced higher-than-expected inflation and continued industry-wide disruption and warehouse cost pressures driven by labor shortages, freight carrier availability and other freight cost issues that we incurred as we chose to prioritize customer service, resulting in a reduction in adjusted gross margin of about 400 basis points.” International sales of Hain Celestial were down 20% in the first quarter of 2023 ended Sept. 30, 2022.

Shares of Post Holdings, Inc., St. Louis, fell 20% in 2022. In 2021 Post ranked 12th on the index with a share price gain of 12%. In March, the company initiated a 1528:1000 stock split. The GBF index has adjusted prices to reflect the split. In June the company said its Post Consumer Brands business would invest up to $110 million to expand its cereal production capacity at its facility in Sparks, Nev. Post acquired the Sparks facility as part of the ready-to-eat cereal business of TreeHouse Foods in June 2021.

Also sustaining a setback in 2022 was J&J Snack Foods, Parsippany, NJ, down 5%. In 2021 shares of J&J Snack Foods edged out a 2% gain. The company ran into trouble in the second quarter of 2022 when implementation of an enterprise resource system created unforeseen temporary challenges across its operations. Earnings of J&J Snack Foods in the second quarter were down 46% from the second quarter of 2021.

Shares of Seaboard Corp., Merriam, Kan., sustained a share price loss of 5% in 2022, compared with a gain of 29% in 2021, when it placed fifth on the index. In the second quarter ended July 2, 2022, net income of Seaboard dropped 39% from the same period a year ago. In a filing with the US Securities and Exchange Commission, Seaboard said it invested $273 million in property, plant and equipment in the first half of fiscal 2022, of which $145 million was in the Pork segment and $109 million was in the Marine segment. For the remainder of 2022, Seaboard said management has budgeted capital expenditures totaling $435 million.

Performance among international grain-based foods companies was mixed in 2022.

Grupo Bimbo SAB de CV, Mexico City, saw its shares advance 31% from a year earlier. In 2021, shares of Bimbo gained 45%.

Shares of Toronto-based George Weston Ltd. posted a 15% increase in the year. In 2021 shares of George Weston rose 54%.  

Maple Leaf Foods, Toronto, sustained a decrease in 2022 share price, down 16%. A year earlier, shares of Maple Leaf Foods increased 4%. In the second quarter, the company’s Plant Protein Group gross margin declined 25%. George Weston said it was “rightsizing” its business to address forecasted demand for meat alternatives that never materialized.