Can Brand Diversification Shield PPC From Commodity Volatility?

Pilgrim's Pride Corporation PPC has been leaning more heavily on brand and portfolio diversification to help manage the volatility inherent in commodity-driven poultry markets. The company’s third-quarter 2025 results highlight how broader exposure across products, brands and regions can support performance when pricing and input costs fluctuate.

Within the U.S. business, diversification across bird sizes, including Case Ready, Small Bird and Big Bird, played an important role during the quarter. Even as chicken prices turned volatile in September 2025, PPC’s U.S. business delivered margins that were largely in line with last year’s levels. A key contributor was the growing Prepared Foods segment, where net sales rose more than 25%. The Just BARE brand stood out, gaining nearly 300 basis points of market share. By expanding higher-attribute and branded offerings, PPC continues to reduce reliance on pure commodity pricing.

This strategy is also evident in international markets. In Mexico, PPC continues to lower exposure to live market volatility by expanding value-added Prepared Foods, which posted a 9% sales increase in the quarter. Management noted that growing prepared and branded offerings can help balance fluctuations in fresh-market pricing while strengthening customer relationships.

In Europe, brand differentiation is being used to help navigate broader protein market pressures, including softer hog pricing. Brands such as Fridge Raiders and Rollover continued to grow faster than their respective categories, providing incremental support in a challenging operating environment.

To support these diversification efforts, PPC has outlined more than $500 million in planned U.S. investments over the next two years. These initiatives include expanding Prepared Foods' capacity and converting select facilities to Case Ready production. Management views these investments as a way to enhance operational flexibility and support growth in branded and value-added products. While commodity exposure remains part of the business, these efforts are intended to help moderate the impact of market volatility over time.

Pilgrim's Pride’s Zacks Rank & Share Price Performance

Shares of this Zacks Rank #4 (Sell) company have gained 5.3% over the past month, outperforming the industry’s decline of 1.8%. Over the same period, PPC also outperformed the S&P 500 index and the broader Consumer Staples sector’s growth of  2.7% and 0.3%, respectively.

PPC Stock's Past Month Performance

Is PPC a Value Play Stock?

Pilgrim’s Pride currently trades at a forward 12-month P/E ratio of 9.69, which is down from the industry average of 12.8 and notably below the sector average of 16.64. This valuation positions the stock at a modest discount relative to both its direct peers and the broader consumer staples sector.

PPC P/E Ratio (Forward 12 Months)

Better-Ranked Stocks

United Natural Foods, Inc. UNFI distributes natural, organic, specialty, produce and conventional grocery and non-food products in the United States and Canada. At present, United Natural flaunts a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for United Natural’s current fiscal-year sales and earnings implies growth of 1.4% and 197.2%, respectively, from the year-ago figures. UNFI delivered a trailing four-quarter earnings surprise of 52.1%, on average.

Mama's Creations, Inc. MAMA manufactures and markets fresh deli-prepared foods in the United States. At present, MAMA sports a Zacks Rank of 1. Mama's Creations delivered a trailing four-quarter earnings surprise of 133.3%, on average.

The consensus estimate for Mama's Creations’ current fiscal-year sales and earnings implies growth of 39.9% and 44.4%, respectively, from the year-ago figures. 

McCormick & Company, Incorporated MKC manufactures, markets and distributes spices, seasoning mixes, condiments and other flavorful products to the food industry. It holds a Zacks Rank #2 (Buy) at present. McCormick delivered a trailing four-quarter earnings surprise of 2.2%, on average. 

The Zacks Consensus Estimate for McCormick’s current fiscal-year sales and earnings implies growth of 1.6% and 2.4%, respectively, from the year-ago figures.

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This article originally published on Zacks Investment Research (zacks.com).

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