With inflation picking up across the OECD, led by a sharp rise in energy costs and steady core inflation at 3.8%, many investors are rethinking how to position their portfolios for stubborn price pressures. Consumer staples stocks, especially larger food, beverage, and household product companies, can sometimes offer a different mix of resilience and risk when inflation stays elevated. This article looks at three stocks from our Consumer Staples Stocks screener that appear positively exposed to the latest inflation trends, to help you decide whether they might fit, or not fit, with your approach to today’s market backdrop.

PepsiCo (PEP)

Overview: PepsiCo is a global consumer staples company that sells branded snacks, cereals and other convenient foods alongside a wide range of soft drinks, sports drinks, teas and coffees to retailers, foodservice customers and consumers worldwide.

Operations: PepsiCo generates most of its revenue from PepsiCo Beverages North America at US$28.7b and PepsiCo Foods North America at US$27.6b, with additional contributions from Europe, Middle East and Africa at US$18.5b, Latin America Foods at US$10.8b, International Beverages Franchise at US$5.1b and Asia Pacific Foods at US$4.7b.

Market Cap: US$197.1b

For investors watching inflation reaccelerate, PepsiCo is often viewed as a classic staples stock with a twist, combining essential snacks and drinks with a push into functional and health focused beverages such as Poppi, Bubly and its partnership with Celsius that could reshape its mix over time. The company has a long dividend track record with a yield near 3.95% and trades on a P/E below many peers, even as earnings were recently affected by a US$3.3b one off loss and ongoing pressure in North America foods. High leverage and moderating margins add risk, but when considered alongside its brands, cost pass through potential and active shareholder interest from Elliott Investment Management, the risk reward picture can appear more nuanced than headlines alone suggest.

PepsiCo’s mix of everyday snacks and health focused drinks, combined with active shareholder interest and a recent one off hit, makes the next chapter hard to ignore. Start with the 3 key rewards and 2 important warning signs.

Coca-Cola (KO)

Overview: Coca-Cola is a global beverage company that sells a wide range of nonalcoholic drinks, from its flagship colas to juices, waters, sports drinks, coffees and teas. It reaches consumers through retailers, restaurants, convenience stores and foodservice partners worldwide.

Operations: Coca-Cola generates US$49.3b in revenue from non alcoholic beverages, with North America at US$20.1b and Europe, Middle East & Africa at US$11.9b as key reported regions among its global operations.

Market Cap: US$362.0b

Investors looking at inflation picking up again may see Coca-Cola as a textbook consumer staples stock, with powerful brands, wide distribution and pricing ability that can be important when energy costs and core inflation stay elevated. The company pairs high reported profitability and a long dividend track record with fresh demand drivers such as the Marriott hotel partnership and World Cup marketing. It also uses revenue growth management tools to keep products affordable in regions facing intense inflation. At the same time, high debt, an ongoing US$20b IRS tax dispute and leadership changes in North America show that this is not a risk free story. This is exactly why a closer look at how Coca-Cola is balancing pricing, volume and financial resilience matters now.

Coca-Cola’s pricing strength and hotel and World Cup partnerships hint at more under the surface, but the real story sits in the 4 key rewards and 2 important warning signs that could be masking one crucial twist investors often overlook

Utz Brands (UTZ)

Overview: Utz Brands is a US snack food company that makes and markets a wide range of salty snacks, including potato chips, pretzels, tortilla chips, cheese snacks, pork skins, popcorn and party mixes, sold under brands such as Utz, On The Border, Zapp’s and Boulder Canyon. Its products reach consumers through supermarkets, convenience stores, foodservice outlets, third party distributors and direct to consumer channels across the United States.

Operations: Utz Brands generates all of its roughly US$1.4b in revenue from manufacturing, distributing, marketing and selling snack food products in the United States.

Market Cap: US$1.2b

Utz Brands gives you focused exposure to US snacking habits at a time when inflation is running hot and snack foods often hold up well in household budgets, yet the stock has fallen around 32% in six months and still carries losses, a thin five year ROIC and a dividend that is not currently covered by earnings. At the same time, management is lifting adjusted EBITDA margins, premium brands like Boulder Canyon are winning awards, and analysts expect a turn to profitability within three years with earnings growth that is forecast to outpace revenue growth. In a market where many staples stocks look fully priced for resilience, Utz’s mix of inflation resistant demand, margin work and execution risk could be an interesting trade off for investors to consider.

Utz Brands’ margin work and premium snacks story appears to be quietly accelerating while the share price is still catching up, but the full picture in the 3 key rewards and 1 important warning sign could reveal one tension investors may be missing

The three consumer staples stocks covered here are just a starting point, with the full Consumer Staples Stocks screener surfacing 21 more companies that pair inflation aware business models with equally compelling narratives. Use Simply Wall St to identify and analyze the specific catalysts, balance sheet strengths, dividend profiles and risk factors that matter most to you so you can focus on the highest conviction opportunities in this corner of the market.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.