The Best Food Stocks to Watch in 2024
"People always have to eat!"
This argument is often used by supporters of food stocks. And they are right! Have you considered the best food stocks to watch in 2024?
No matter what happens to the economy, even in a supply crisis like the one triggered by current geopolitical factors - companies that sell food are often likely to make a profit, as everyday goods are among the few recession-resistant industries.
Reason enough, then, to wonder whether a food stock is missing from your portfolio.
Table of Contents
Best Food Stocks: Introduction
While it may be obvious to few, produce and food are actually not the same thing in nutritional science.
Produce is either:
- in its natural and unaltered state (for example, seeds, nuts, eggs, or milk fresh from the cow),
- mechanically modified (for example, pressed oils or grains ground into flour), or
- at most, fermentatively modified foods such as yeast, sauerkraut, or even beer, which is after all fermented, from purely natural ingredients.
Food, on the other hand, is something that has been processed in some way. Either:
- heated, such as homogenized milk or cooked vegetables;
- preserved, such as preserved sausage and canned vegetables; or
- Prepared, such as refined sugar or manufactured pasta.
But irrespective of this nutritional classification, in the field of investment, when food stocks are mentioned, both are meant: produce and food, which usually also includes beverages.
What are Food Stocks?
Depending on the definition, food stocks can mean a variety of things. The traditional classification, which only includes food producers, is overly restrictive. If the motto "there is always food and drink" is followed, the circle of food shares can be defined more broadly.
The stocks of fast-food companies like McDonalds, mail-order food companies like Hello Fresh, and even beverage producers like the Coca-Cola Company are also included.
For more information on the thousands of stocks and ETFs available at Admiral Markets, please click on the following:
Why are Food Stocks Attractive?
In the summer of 2022, the stock market was extremely volatile. But there is one piece of advice for these trying times: eat, drink, and be happy! And the emphasis is on "happy" if you own food stocks.
On the surface, it appears that rather mundane consumer goods businesses, such as food and beverage companies, perform well even in difficult economic times and market turmoil.
This is because, even if consumers reduce their spending on leisure activities such as dining out or video streaming, they still need to eat. And the cheapest place to do that is usually at home.
That is why, especially in times of high inflation and economic anxiety, some investors are betting on food stocks: they are largely unaffected by the economy.
Best Food Stocks to Watch: Factors to Consider
Not all food stocks are created equal. The food and beverage industry's size and business segments range from global conglomerates to small startups.
Investing in food companies can lead to investments in a variety of different companies, including those that are defensive and less susceptible to economic fluctuations, as well as those that are cyclical and rise during boom times.
Investors can buy traditional stocks or shares in exchange-traded funds (ETFs).
To help you decide, here is a comparison of the pros and cons of food stocks:
The Top 8 Best Food Stocks to Watch
If you want to invest in food stocks, there's no getting around the world's largest food market: the United States. Accordingly, there are several U.S. players in the following list of potentially attractive investment targets.
In addition, we have also picked out candidates in Europe, Latin America and Asia for you:
Food Stock #1: HelloFresh SE (HFG1)
Founded in 2011, the Berlin-based company describes itself as the world's leading provider of cooking boxes. The business idea is based on a subscription delivery service that brings all the ingredients needed for a recipe to the customer's home.
Over the course of the last four years, HelloFresh has been able to greatly expand its sales. The number of employees has also more than doubled year-on-year to 14,600 in 2021.
While they have an attractive offering, one downside is that they don’t cater to strict diets such as vegan, paleo or keto.
Food Stock #2: Unilever PLC (ULVR)
As one of the world's largest branded consumer goods manufacturers, Unilever is a leader in personal care, cosmetics, detergents and cleaners, in addition to the food segment. But with brands like Knorr, Lipton and Ben & Jerry`s, the company has been a reliable force in the nutrition sector for decades.
While it is a very reputable name in the food stock industry, growth is relatively steady.
You can trade Unilever as a Contract for Difference (CFD) at Admiral Markets.
Source: MetaTrader 5 ULVR monthly chart, data range: April 1, 2011 to January 2, 2023, accessed January 2, 2023 at 16:54 p.m. Please note: past performance is not a reliable indicator of future results.
Food Stock #3: Beyond Meat Inc (BYND)
This U.S. producer focuses on making meat substitutes, which fits right in with the times. It uses pea protein, beetroot and vegetable oils to make vegan burger patties, sausages and more.
Founded back in 2009 in the U.S., the company began production in Europe in 2020 and Shanghai in 2021.
At Admiral Markets, it’s possible to invest in the Beyond Meat stock and also trade the CFD.
Food Stock #4: Tyson Foods Inc (TSN)
Unlike Beyond Meat, Tyson Foods Inc. is virtually all about meat.
The company is considered the world's largest marketer of beef, pork and chicken, while also raising livestock and producing feed itself. Tyson Foods is available as a CFD at Admiral Markets.
Food Stock #5: The Kroger Co. (KR)
The Kroger Co. is the largest grocery supermarket chain in the U.S., with its founding year dating back to 1883.
What makes it special is that to this day, the company makes many of the foods it sells itself. In addition, about half of its stores have their own gas stations attached. As of 2021, Kroger has annual sales of $132 billion with over 460.000 employees. Kroger Co is tradable at Admiral Markets as a CFD.
Food Stock #6: Campbell Soup Co (CPB)
The company is known to many because artist Andy Warhol immortalized its canned goods in one of his works. Campbell is also considered an international leader with its line of soups, broths, sauces, beverages and baked goods. Those who do not want to hold the food stock for the long term can also trade Campbell as a CFD at Admiral Markets.
Food Stock #7: China Green Agriculture Inc (CGA)
The company has two businesses: Research, development, production and sales of humic acid-based organic liquid fertilizer and agricultural products such as fruits, vegetables, flowers and seedlings.
Food Stock #8: Cia Cervecerias Unidas SA (CCU)
The Santiago de Chile-based company produces both alcoholic and non-alcoholic beverages. Cerverias Unidas has operations in Chile, Argentina, Bolivia, Colombia, Paraguay, Uruguay and Peru. CCU is tradable as a CFD at Admiral Markets.
2 organic food stocks for investors who want to invest sustainably
Organic is becoming increasingly popular. Healthy and conscious nutrition has become the focus of consumers, not least due to the Covid-19 pandemic. In addition, there is an increasing awareness of animal welfare.
There are now several listed companies active in this segment. Two of them, which you can buy as a share or trade as a CFD at Admiral Markets, are presented below:
Organic Food Stock #1: Sprouts Farmers Market Inc (SFM)
This is a US organic supermarket chain that has grown rapidly since its inception 20 years ago. Sprouts is headquartered in Phoenix, Arizona and is one of the largest specialty retailers of fresh, natural and organic foods. The company employs about 31,000 people and operates about 380 stores in 23 states nationwide.
Tradable as a CFD on Admiral Markets.
Organic Food Stock #2: United Natural Foods Inc (UNFI)
UNFI is another U.S. natural and organic foods company. It is the largest publicly traded wholesaler of health and specialty foods in the United States and Canada and the primary supplier to Whole Foods Market, the organic supermarket chain owned by Amazon.
Tradable as a CFD on Admiral Markets.
Active Trading: The Alternative to Long-Term Investment
The past has shown that shares exceed the returns of many alternative forms of investment when held for a sufficient period of time (on average, this means more than 12 years).
For those looking for an option with a shorter time horizon, trading comes into question. In particular, contracts for difference (CFDs) have gained popularity in recent years.
Whether an investor chooses to trade CFDs (Learn to trade CFDs - what beginners should know), invest in stocks or both depends on his goals and personal circumstances.
Investors who are risk-averse and do not have the time to devote to daily and fast-paced active trading should take a more passive approach and add stocks or ETFs to their portfolio as part of a buy-and-hold strategy.
Discover the latest trading trends, get actionable strategies and enjoy complimentary tools by joining our advanced trading seminars:
Some more tips to help you decide between CFD trading and investing in food stocks:
As CFDs are financial derivatives, their price is derived from an underlying asset. This underlying asset can be an index, a commodity, a currency, or another value such as a share.
CFDs, unlike stocks, do not represent an investment in a company. Rather, the investor obtains a claim through the use of a CFD. Unlike stock investors, CFD investors only participate in the price development and fluctuations of the financial instrument, more specifically in the price differences.
In addition to CFD’s and stocks: fractions of shares, known as fractional shares. In this case, you only purchase a portion of a whole share, such as one tenth or even one hundredth. The benefit is obvious: you can spread your investment across a greater number of shares with less money invested, thereby diversifying your risk.
CFDs and shares in comparison:
| Properties | CFDs | Stock Trading |
| Ownership of the underlying | No | Yes |
| Leverage | Yes | No |
| Go long and short | Yes | Yes (but going short is more complicated) |
| Available markets | Multiple markets | Stocks and ETFs |
| Cost of trading | Spread & holding costs (overnight) | Commission |
| Trading hours | 24 hours, 5 days per week | During exchange opening hours |
| Dividends | Yes, via cash adjustment | Yes |
| Losses | Losses cannot exceed deposits (no margin call) | Losses are limited to the amount invested |
| Voting rights | Yes | No |
FAQ
When Should I Invest in Food Stocks?
As with any stock, determining the right entry price and timing is critical. The online broker's training courses, such as those in dealing in fundamental analysis, can help with this.
Can I Also Invest in Food Shares as Fractional Shares?
In principle, yes, but it depends on the broker offer. Here at Admiral Markets, you can invest in 700 shares from as little as one euro (not all of which are food shares, however).
You might also be interested in:
- How to invest in vegan stocks
- Top 5 Best Agriculture Stocks to Watch in 2024
- Investing in shares the right way - a detailed guide
Practice trading with virtual funds by trading with a risk-free demo account. Register now by clicking on the following:
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