2026 Food Inflation Outlook: This ETF Could Outperform

Consumer discretionary stocks haven’t fared so well in 2026. After finishing with a 6% gain last year—good for third worst among the S&P 500’s 11 sectors—the cohort has posted a 2.7% year-to-date (YTD) loss, also good for third to last place. 

Things have looked even bleaker over the past month, during which time the consumer discretionary sector has lost 6.46%—dead last in the S&P 500. But help could be on the way later this year thanks to an unlikely hero: food inflation. 

Last month, the U.S. Department of Agriculture released its Food Price Outlook for 2026. And while the cost of some foodstuffs is expected to slow, most others are expected to rise. One notable takeaway is that prices for food away from home (i.e., dining out) are expected to surge nearly 5%. 

That’s good news for one exchange-traded fund (ETF) that provides basket exposure to a handful of fast food and fast casual dining chains.

Food Inflation Is Not Going Away

If you thought prices were out of control in 2025, just wait until this year. Products like pork and eggs are expected to deflate, but beef and veal prices are forecast to increase 9.4% in 2026. However, that inflation will not hurt grocery shoppers as much as it will those who enjoy going out to eat. 

Food-at-home prices are predicted to increase 1.7%, but food-away-from-home prices are predicted to increase 4.6%. That, of course, may dissuade some from dining out. But even for companies whose stocks struggled in 2025, many saw top-line growth despite falling share prices and shifting consumer sentiment.  

Take, for instance, Chipotle (NYSE: CMG). Despite CMG's shares being battered last year, the company has consistently posted year-over-year (YOY) revenue growth. That includes last year—albeit at a slower rate of 5.41% YOY—despite the stock falling more than 30%. From 2022 to 2024, the company averaged 14.45% YOY revenue growth. 

Despite inflation remaining sticky this year, it is down considerably from 2022’s 41-year high record consumer price increases, when food prices rose 9.9%. Inasmuch, it could be argued that Chipotle’s slower revenue growth last year is an outlier, and better results would be in store even if that annual figure were to moderate slightly. 

Although consumers are lamenting the loss of dollar menus, they are simultaneously—albeit begrudgingly—accepting the reality of $12 burgers, $15 burritos, and $20 pizzas. 

According to industry consultancy firm Grand View Research, the global fast food and quick service restaurant market size, which was estimated at more than $296 billion in 2025, is projected to enjoy a compound annual growth rate, or CAGR, of 14.8% from 2026 through 2033 when it reaches a forecasted value of more than $885 billion. 

That is really good news for one ETF in particular. 

Order Up Exposure With the EATZ ETF

Since it was launched on April 20, 2021, the AdvisorShares Restaurant ETF (EATZ) has provided investors with broad exposure to the fast food and quick service restaurant market. The fund is actively managed and carries an expense ratio of 0.99%, which is partially offset by its modest dividend yield of 0.48%, or 13 cents per share annually.

The ETF’s holdings, by weight, include Nathan's Famous (NASDAQ: NATH) , Dutch Bros (NYSE: BROS), Darden Restaurants (NYSE: DRI), Yum! Brands (NYSE: YUM), Chipotle, The Cheesecake Factory (NASDAQ: CAKE), El Pollo Loco (NASDAQ: LOCO), Texas Roadhouse (NASDAQ: TXRH), Domino's (NASDAQ: DPZ), DoorDash (NASDAQ: DASH), Wingstop (NASDAQ: WING), and more.

Admittedly, some of those stocks have struggled over the past year. But in numerous instances, that appears to be an aberration more than the new normal. Returning to the Chipotle case, in years when revenue growth slowed dramatically, it bounced back toward the mean each time. After posting YOY growth of nearly 15% in 2019, the pandemic resulted in just 7.13% revenue growth in 2020. But in 2021, that figure rebounded to more than 26% in 2022.  

Last year, the fast-casual restaurant saw record net income. So too did Dutch Bros, Olive Garden and LongHorn Steakhouse owner Darden Restaurants, and Texas Roadhouse. Domino’s, which doesn’t report earnings until Feb. 23, is on pace to set record revenue, as are The Cheesecake Factory and DoorDash when they next report. 

The fund receives an aggregate Moderate Buy rating despite a notable current short interest of nearly 24%, or more than 21,000 shares of the 90,000 shares outstanding. EATZ could also warrant concerns regarding liquidity, as it has an average daily trading volume of just 2,240 shares. 

But for investors who believe in the long-term prospects of the global fast food and quick service restaurant market size, the AdvisorShares Restaurant ETF can be your portfolio’s all-you-can-eat buffet. 

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