Investing in food stocks

Since food is a necessity, investing in food stocks can sound like a lucrative venture. But it involves some risks you need to consider.

What is a food stock?

Food stocks are stocks in any company involved in the production and transportation of food from the farm to your stomach. So you can invest in stocks related to any of the following industries:

These industries keep the world food supply running and are essential to everyday life. For instance, think about how your morning coffee ended up in your cup — it all started in the ground as a coffee bean.

Farmers need water, fertilizers and other resources to grow these beans. Beans then need to be processed, transported, roasted, brewed and finally poured into your cup. This process involves companies making farming equipment and chemicals, transportation services, roasters and employees at cafés around the world — just to name a few players.

Why invest in food stocks?

Because humans need food, some investors may find food stocks consistent and stable. A growing health-conscious population has also made vegan stocks, organic-food stocks and similar securities grow in popularity.

According to Statista, the United States food market revenue in 2020 has amounted to nearly $924.39 million and it’s expected to grow annually by 1.8%. But to invest in food stocks, you need to know what role these companies play in the food-production process and the risks involved.

Restaurant stocks vs. food stocks

Restaurant stocks are a subcategory of food stocks. These include stocks of full-service restaurants, fast-food establishments and snack bars. But they may be particularly volatile. At the beginning of the COVID-19 pandemic, many restaurants were forced to temporarily close and some didn’t come back. The ones that did faced particular challenges, such as smaller menus and capacity.

Still, you can find restaurant stocks tied to large chains that operate throughout the country. Many restaurants are also benefiting from delivery services like DoorDash. In any case, you should carefully evaluate restaurant stocks and the companies behind them before you decide.

Risks of investing in food stocks

Because many industries and companies are involved in food production, it can run into several risks. For instance, weather can severely affect crop production. Political turmoil in a country can substantially impact the food and raw material they export.

Most recently, the COVID-19 pandemic has affected how food is processed, handled and transported. The lockdowns and social distancing rules had harmful effects on the restaurant industry. In some states like New York, restaurants are only beginning to allow patrons inside at limited capacity after having been closed for months.

But simultaneously, some grocery stocks saw a spike. Grocery stocks are other types of food stocks. They belong to supermarkets and other major stores where you can buy food to prepare.

For example, Costco stocks closed around 298. In late October, its stocks closed closer to 373.

Regardless of what types of food stocks you invest in, make sure you carefully analyze your options as well as the risks they may face.

Food stocks

• Costco Wholesale (COST.US)

  Company summary

  Costco Wholesale Corporation, together with its subsidiaries, engages in the operation of membership warehouses in the United States, Puerto Rico, Canada, the United Kingdom, Mexico, Japan, Korea, Australia, Spain, France, Iceland, China, and Taiwan. It offers branded and private-label products in a range of merchandise categories. The company offers sundries, dry groceries, candies, coolers, freezers, liquor, and tobacco and deli products; appliances, electronics, health and beauty aids, hardware, garden and patio products, sporting goods, tires, toys and seasonal products, office supplies, automotive care products, postages, tickets, apparel, small appliances, furniture, domestics, housewares, special order kiosks, and jewelry; and meat, produce, service deli, and bakery products. It also operates pharmacies, opticals, food courts, hearing-aid centers, and tire installation centers, as well as 636 gas stations; and offers business delivery, travel, same-day grocery, and various other services online in various countries. As of August 29, 2021, the company operated 815 membership warehouses, including 564 in the United States and Puerto Rico, 105 in Canada, 39 in Mexico, 30 in Japan, 29 in the United Kingdom, 16 in South Korea, 14 in Taiwan, 12 in Australia, 3 in Spain, 1 in Iceland, 1 in France, and 1 in China. It also operates e-commerce websites in the United States, Canada, the United Kingdom, Mexico, South Korea, Taiwan, Japan, and Australia. The company was formerly known as Costco Companies, Inc. and changed its name to Costco Wholesale Corporation in August 1999. Costco Wholesale Corporation was founded in 1976 and is based in Issaquah, Washington.

  Historical performance

  Stock information

  • Market capitalization: $215173709824
  • P/E ratio: 38.2488
  • PEG ratio: 3.0336
  • Dividend yield: 0.0074%

  Get more detailed information and learn how to buy COST.US stock

• National Beverage (FIZZ.US)

  Company summary

  National Beverage Corp., through its subsidiaries, develops, produces, markets, and sells a portfolio of sparkling waters, juices, energy drinks, and carbonated soft drinks primarily in the United States and Canada. The company offers beverages to the active and health-conscious consumers, including sparkling waters, energy drinks, and juices under the LaCroix, LaCroix Cúrate, LaCroix NiCola, Clear Fruit, Rip It, Everfresh, Everfresh Premier Varietals, and Mr. Pure brands. It also offers carbonated soft drinks under the Shasta and Faygo brands. The company serves retailers, as well as various smaller up-and-down-the-street accounts through the take-home, convenience, and food-service distribution channels. National Beverage Corp. was incorporated in 1985 and is based in Fort Lauderdale, Florida.

  Historical performance

  Stock information

  • Market capitalization: $4618374144
  • P/E ratio: 28.9357
  • PEG ratio: 4.0828
  • Dividend yield: 0%

  Get more detailed information and learn how to buy FIZZ.US stock

• Darling Ingredients (DAR.US)

  Company summary

  Darling Ingredients Inc. develops, produces, and sells natural ingredients from edible and inedible bio-nutrients. The company operates through three segments: Feed Ingredients, Food Ingredients, and Fuel Ingredients. It offers ingredients and customized specialty solutions for customers in the pharmaceutical, food, pet food, feed, industrial, fuel, bioenergy, and fertilizer industries. The company also collects and transforms various animal by-product streams into useable and specialty ingredients, such as collagen, edible fats, feed-grade fats, animal proteins and meals, plasma, pet food ingredients, organic fertilizers, yellow grease, fuel feedstock, green energy, natural casings, and hides. In addition, it recovers and converts used cooking oil and animal fats, and residual bakery products into valuable feed and fuel ingredients. Further, the company provides environmental services, including grease trap collection and disposal services to food service establishments. It primarily operates under the Sonac, Dar Pro, Rothsay, Rousselot, Nature Safe, CleanStar, Peptan, Cookie Meal, Bakery Feeds, Ecoson, and Rendac brand names in North America, Europe, China, South America, Australia, and internationally. The company was formerly known as Darling International Inc. and changed its name to Darling Ingredients Inc. in May 2014. Darling Ingredients Inc. was founded in 1882 and is headquartered in Irving, Texas.

  Historical performance

  Stock information

  • Market capitalization: $10114006016
  • P/E ratio: 14.4286
  • PEG ratio: 14.47
  • Dividend yield: 0%

  Get more detailed information and learn how to buy DAR.US stock

• B-and-G Foods (BGS.US)

  Company summary

  B&G Foods, Inc. manufactures, sells, and distributes a portfolio of shelf-stable and frozen foods, and household products in the United States, Canada, and Puerto Rico. The company's products include frozen and canned vegetables, vegetables, canola and other cooking oils, vegetable shortening, cooking sprays, oatmeal and other hot cereals, fruit spreads, canned meats and beans, bagel chips, spices, seasonings, hot sauces, wine vinegar, maple syrups, molasses, salad dressings, pizza crusts, Mexican-style sauces, dry soups, taco shells and kits, salsas, pickles, peppers, tomato-based products, baking powder and soda, corn starch, cookies and crackers, nut clusters, and other specialty products. It markets its products under various brands, including Ac'cent, B&G, B&M, Back to Nature, Baker's Joy, Bear Creek Country Kitchens, Brer Rabbit, Canoleo, Cary's, Clabber Girl, Cream of Rice, Cream of Wheat, Crisco, Dash, Davis, Devonsheer, Don Pepino, Durkee, Emeril's, Grandma's Molasses, Green Giant, Joan of Arc, Las Palmas, Le Sueur, MacDonald's, Mama Mary's, Maple Grove Farms of Vermont, McCann's, Molly McButter, New York Flatbreads, New York Style, Old London, Ortega, Polaner, Red Devil, Regina, Rumford, Sa-són, Sclafani, Spice Islands, Spring Tree, Sugar Twin, Tone's, Trappey's, TrueNorth, Underwood, Vermont Maid, Victoria, and Weber and Wright's. The company also sells, markets, and distributes household products under the Static Guard brand. It sells and distributes its products directly, as well as through a network of independent brokers and distributors to supermarket chains, foodservice outlets, mass merchants, warehouse clubs, non-food outlets, and specialty distributors. The company was formerly known as B&G Foods Holdings Corp. and changed its name to B&G Foods, Inc. in October 2004. B&G Foods, Inc. was founded in 1822 and is headquartered in Parsippany, New Jersey.

  Historical performance

  Stock information

  • Market capitalization: $1638085376
  • P/E ratio: 24.8745
  • PEG ratio: 7.93
  • Dividend yield: 0.0783%

  Get more detailed information and learn how to buy BGS.US stock

• General Mills (GIS.US)

  Company summary

  General Mills, Inc. manufactures and markets branded consumer foods worldwide. The company operates in five segments: North America Retail; Convenience Stores & Foodservice; Europe & Australia; Asia & Latin America; and Pet. It offers ready-to-eat cereals, refrigerated yogurt, soup, meal kits, refrigerated and frozen dough products, dessert and baking mixes, bakery flour, frozen pizza and pizza snacks, snack bars, fruit and salty snacks, ice cream, nutrition bars, wellness beverages, and savory and grain snacks, as well as various organic products, including frozen and shelf-stable vegetables. It also supplies branded and unbranded food products to the North American foodservice and commercial baking industries; and manufactures and markets pet food products, including dog and cat food. The company markets its products under the Annie's, Betty Crocker, Bisquick, Blue Buffalo, Blue Basics, Blue Freedom, Bugles, Cascadian Farm, Cheerios, Chex, Cinnamon Toast Crunch, Cocoa Puffs, Cookie Crisp, EPIC, Fiber One, Food Should Taste Good, Fruit by the Foot, Fruit Gushers, Fruit Roll-Ups, Gardetto's, Go-Gurt, Gold Medal, Golden Grahams, Häagen-Dazs, Helpers, Jus-Rol, Kitano, Kix, Lärabar, Latina, Liberté, Lucky Charms, Muir Glen, Nature Valley, Oatmeal Crisp, Old El Paso, Oui, Pillsbury, Progresso, Raisin Nut Bran, Total, Totino's, Trix, Wanchai Ferry, Wheaties, Wilderness, Yoki, and Yoplait trademarks. It sells its products directly, as well as through broker and distribution arrangements to grocery stores, mass merchandisers, membership stores, natural food chains, e-commerce retailers, commercial and noncommercial foodservice distributors and operators, restaurants, convenience stores, and pet specialty stores, as well as drug, dollar, and discount chains. The company operates 466 leased and 392 franchise ice cream parlors. General Mills, Inc. was founded in 1866 and is headquartered in Minneapolis, Minnesota.

  Historical performance

  Stock information

  • Market capitalization: $45641646080
  • P/E ratio: 20.2107
  • PEG ratio: 3.5028
  • Dividend yield: 0.0289%

  Get more detailed information and learn how to buy GIS.US stock

• Kraft Heinz (KHC.US)

  Company summary

  The Kraft Heinz Company, together with its subsidiaries, manufactures and markets food and beverage products in the United States, Canada, the United Kingdom, and internationally. Its products include condiments and sauces, cheese and dairy products, meals, meats, refreshment beverages, coffee, and other grocery products. The company also offers dressings, healthy snacks, and other categories; and spices and other seasonings. It sells its products through its own sales organizations, as well as through independent brokers, agents, and distributors to chain, wholesale, cooperative and independent grocery accounts, convenience stores, drug stores, value stores, bakeries, pharmacies, mass merchants, club stores, and foodservice distributors and institutions, including hotels, restaurants, hospitals, health care facilities, and government agencies; and online through various e-commerce platforms and retailers. The company was formerly known as H.J. Heinz Holding Corporation and changed its name to The Kraft Heinz Company in July 2015. The Kraft Heinz Company was founded in 1869 and is headquartered in Pittsburgh, Pennsylvania.

  Historical performance

  Stock information

  • Market capitalization: $46684880896
  • P/E ratio: 38.5253
  • PEG ratio: 2.8073
  • Dividend yield: 0.042%

  Get more detailed information and learn how to buy KHC.US stock

• Utz Brands (UTZ.US)

  Company summary

  Utz Brands, Inc. operates as a snack food manufacturing company. It offers a range of salty snacks, including potato chips, kettle chips, tortilla chips, pretzels, cheese snacks, veggie snacks, pork skins, pub/party mixes, salsa and queso, ready-to-eat popcorn, and other snacks under the Utz, Zapp's, ON THE BORDER, Golden Flake, Good Health, Boulder Canyon, Hawaiian, TGIF, TORTIYAHS!, and other brand names. The company distributes its products to grocery, mass, club, convenience, drug, and other retailers though direct shipments, distributors, and direct store delivery routes. Utz Brands, Inc. was founded in 1921 and is headquartered in Hanover, Pennsylvania.

  Historical performance

  Stock information

  • Market capitalization: $1115673344
  • P/E ratio: 41.8788
  • Dividend yield: 0.0157%

  Get more detailed information and learn how to buy UTZ.US stock

• Mondelez International (MDLZ.US)

  Company summary

  Mondelez International, Inc., through its subsidiaries, manufactures, markets, and sells snack food and beverage products in the Latin America, North America, Asia, the Middle East, Africa, and Europe. It provides biscuits, including cookies, crackers, and salted snacks; chocolates; and gums and candies, as well as various cheese and grocery, and powdered beverage products. The company's snack brand portfolio includes Cadbury, Milka, and Toblerone chocolates; Oreo, belVita, and LU biscuits; Halls candies; Trident gums; and Tang powdered beverages. It serves supermarket chains, wholesalers, supercenters, club stores, mass merchandisers, distributors, convenience stores, gasoline stations, drug stores, value stores, and other retail food outlets through direct store delivery, company-owned and satellite warehouses, third party distributors, and other facilities, as well as through independent sales offices and agents, and e-commerce channels. The company was formerly known as Kraft Foods Inc. and changed its name to Mondelez International, Inc. in October 2012. Mondelez International, Inc. was incorporated in 2000 and is headquartered in Chicago, Illinois.

  Historical performance

  Stock information

  • Market capitalization: $85927591936
  • P/E ratio: 20.9057
  • PEG ratio: 3.2474
  • Dividend yield: 0.0225%

  Get more detailed information and learn how to buy MDLZ.US stock

• Bellring Brands LLC (BRBR.US)

  Company summary

  BellRing Brands, Inc., together with its subsidiaries, provides various nutrition products in the United States and internationally. It offers ready-to-drink shake and powder protein products primarily under the Premier Protein and Dymatize brands. The company sells its products through club, food, drug, mass, eCommerce, specialty, and convenience channels. BellRing Brands, Inc. was incorporated in 2019 and is headquartered in Saint Louis, Missouri.

  Historical performance

  Stock information

  • Market capitalization: $3413140992
  • P/E ratio: 36.8088
  • Dividend yield: 0%

  Get more detailed information and learn how to buy BRBR.US stock

• Beyond Meat (BYND.US)

  Company summary

  Beyond Meat, Inc. manufactures, markets, and sells plant-based meat products in the United States and internationally. The company sells a range of plant-based meat products across the platforms of beef, pork, and poultry. It sells its products through grocery, mass merchandiser, club store, convenience store and natural retailer channels, and direct-to-consumer, as well as various food-away-from-home channels, including restaurants, foodservice outlets, and schools. The company was formerly known as Savage River, Inc. and changed its name to Beyond Meat, Inc. in September 2018. Beyond Meat, Inc. was founded in 2009 and is headquartered in El Segundo, California.

  Historical performance

  Stock information

  • Market capitalization: $1630497920
  • PEG ratio: 40.7473
  • Dividend yield: 0%

  Get more detailed information and learn how to buy BYND.US stock

• Albertsons Companies (ACI.US)

  Company summary

  Albertsons Companies, Inc., through its subsidiaries, engages in the operation of food and drug stores in the United States. The company's food and drug retail stores offer grocery products, general merchandise, health and beauty care products, pharmacy, fuel, and other items and services. It also manufactures and processes food products for sale in stores. As of February 26, 2022, it operated 2,276 stores under various banners, including Albertsons, Safeway, Vons, Pavilions, Randalls, Tom Thumb, Carrs, Jewel-Osco, Acme, Shaw's, Star Market, United Supermarkets, Market Street, Haggen, Kings Food Markets, and Balducci's Food Lovers Market; and 1,722 pharmacies, 1,317 in-store branded coffee shops, 402 adjacent fuel centers, 22 distribution centers, and 20 manufacturing facilities, as well as various digital platforms. The company was founded in 1860 and is headquartered in Boise, Idaho.

  Historical performance

  Stock information

  • Market capitalization: $14650620928
  • P/E ratio: 10.2836
  • PEG ratio: 2.0124
  • Dividend yield: 0.0171%

  Get more detailed information and learn how to buy ACI.US stock

• The Hain Celestial Group (HAIN.US)

  Company summary

  The Hain Celestial Group, Inc. manufactures, markets, and sells organic and natural products in United States, United Kingdom, and internationally. It operates through two segments, North America and International. The company offers infant formula; infant, toddler, and kids' food; plant-based beverages and frozen desserts, such as soy, rice, oat, almond, and coconut; and condiments. It also provides cooking and culinary oils; cereal bars; canned, chilled fresh, aseptic, and instant soups; yogurts, chilis, chocolate, and nut butters; and juices. In addition, the company offers hot-eating desserts, cookies, refrigerated and frozen plant-based meat-alternative products, jams, fruit spreads, jellies, honey, natural sweeteners, and marmalade products, as well as other food products. Further, it provides snack products comprising potato, root vegetable and other exotic vegetable chips, straws, tortilla chips, whole grain chips, pita chips, and puffs; and personal care products that include hand, skin, hair, and oral care products, as well as deodorants, baby food, body washes, sunscreens, and lotions under the Alba Botanica, Avalon Organics, Earth's Best, JASON, Live Clean, and Queen Helene brands name. Additionally, the company offers herbal, green, black, wellness, rooibos, and chai tea under the Celestial Seasonings brand. It sells pantry products under the Spectrum, Spectrum Essentials, MaraNatha, Imagine broths, Hain Pure Foods, Health Valley, and Hollywood brands. It sells its products through specialty and natural food distributors, supermarkets, natural food stores, mass-market and e-commerce retailers, food service channels and clubs, and drug and convenience stores in approximately 80 countries worldwide. The company was incorporated in 1993 and is headquartered in Lake Success, New York.

  Historical performance

  Stock information

  • Market capitalization: $2117425152
  • P/E ratio: 19.9831
  • PEG ratio: 0.949
  • Dividend yield: 0%

  Get more detailed information and learn how to buy HAIN.US stock

What ETFs track the food category?

If you’re not into stock picking, you may consider investing in stock ETFs. These have become popular in recent years because they offer access to a diversified basket of stocks. Here are some food stock ETFs you may be interested in.

• Invesco Dynamic Food & Beverage ETF (PBJ)
• WBI BullBear Rising Income 1000 ETF (WBIE)
• First Trust Nasdaq Food & Beverage ETF (FTXG)

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Bottom line

Because food will be consistently in demand, food stocks may sound like stable investments. But they carry risks and require careful analysis.

Before you start investing in food stocks, compare stock trading platforms.