Food inflation has been front-page stuff for months now, with commodity prices surging and Midwestern floods pushing prices still higher, but Alexia Howard of Sanford Bernstein has found a couple of food stocks that can still nourish a portfolio.
"These companies have been struggling with high commodity-cost inflation for the last 18 months," she told CNBC. "What's different now is they're able to take pricing much more rapidly than they were in 2007; they're not locking themselves into long-term price points; instead, they're having much more frequent conferences with retailers."
At the top of her list is Sara Lee.
"It's a combination of very strong price increases that we've been seeing in the market data, plus strong productivity improvements," she said. "Sara Lee reduced its head count at the corporate center by 300 people at the end of the last quarter."
She also likes Kraft Foods.
"This is really all about dairy-cost inflation, which has plagued the company over the last year," she explained. "The year-on-year inflation in cheese has basically come down to zero...and that should really start to help Kraft's margins."
Dean Foods is also on the Sanford Bernstein "buy" list.
Neither Alexia Howard, her family, nor her firm owns shares of Sara Lee, Kraft Foods, or Dean Foods.
During the past twelve months Kraft Foods was a client of Bernstein, which provided non-investment banking securities related services and received compensation for such services.