Food and drink are more than mere sustenance; they’re the essence of togetherness. From unique local delicacies to beloved global brands, every culture offers something special that can make anywhere feel like home.
And here’s some food for thought: the worldwide food and drink market is on an upward trend, expected to grow by 30% between 2023 to 2027, reaching a mouth-watering £9.2 trillion. So, why not reserve your place at the table? We’re about to serve up some of the best food and drink stocks that could add some flavour to your portfolio.
This sector constantly evolves, and finding the best food and drink stocks can feel like wandering down a supermarket aisle searching for that one specific item, all while navigating a maze of flashy signs and sidestepping a stream of bustling trolleys.
To give you some starting inspiration, here’s a shopping list of top food and drink stocks from the Invesco Dynamic Food & Beverage ETF (which is based on the Dynamic Food & Beverage Intellidex Index):
| Stock | Icon | 1-year performance (to Feb 2024) | 5-year performance (to Feb 2024) | Link to invest |
|---|---|---|---|---|
| Chipotle Mexican Grill (CMG) |  | 61.57% | 330.48% | Invest with XTBCapital at risk |
| Kraft Heinz (KHC) |  | -9.84% | -23.65% | Invest with XTBCapital at risk |
| Coca-Cola (KO) |  | -1.49% | 31.96% | Invest with XTBCapital at risk |
| Mondelez International (MDLZ) |  | 10.91% | 52.62% | Invest with XTBCapital at risk |
| Constellation Brands (STZ) |  | 8.11% | 41.26% | Invest with XTBCapital at risk |
| Monster Beverage (MNST) |  | 7.33% | 90.50% | Invest with XTBCapital at risk |
| PepsiCo (PEP) |  | -4.03% | 47.19% | Invest with XTBCapital at risk |
| Archer-Daniels-Midland (ADM) |  | -34.38% | 28.01% | Invest with XTBCapital at risk |
| BellRing Brands (BRBR) |  | 93.00% | 144.20% | Invest with XTBCapital at risk |
| Shake Shack (SHAK) |  | 41.30% | 51.45% | Invest with XTBCapital at risk |
As the term implies, food and drink stocks are shares of companies engaged in the food and beverage sector. These are businesses that focus on producing, distributing, and selling a wide array of consumables. This ranges from basic groceries to exotic culinary delights and refreshing beverages, catering to the everyday needs and tastes of consumers worldwide.
The food and beverage sector offers a diverse platter of investment opportunities. Here are some streamlined categories:
Here’s how you can starting investing in food and drink stocks in a few simple steps:
The food and drink sector is a big hit with investors, and it’s easy to see why. It’s got a solid track record for stability and some seriously tasty prospects for growth. Even when times are tough, people don’t stop buying food and drink – though they might swap out the fancy labels for something more wallet friendly.
Plus, with the world’s population expected to jump from 8 billion in 2022 to around 8.5 billion in 2030, there are going to be a lot more hungry mouths to feed. Peter Lynch, a legendary investor, famously said: “Invest in what you know”. And what’s more familiar than the companies filling your cupboard and fridge with your favourite snacks and drinks?
Ready to whet your appetite for investment? Here are some of the benefits that might tempt you to take a bite out of the food and drink stocks market:
Before you toast to your new investment, it’s wise to consider some potential risks that come with investing in food and drink stocks:
The best option is going to depend on your style of investing. If you like a passive approach, you might want to explore ETFs with exposure to the sector. Or, if you fancy yourself as a stock picker, you might look at the individual powerhouses that control large pieces of market share and perhaps even pay a decent dividend.
If you’re growth-focused, there are even some modern food and drink stocks looking to blend both technology and consumable products. The options for investing can be crafted around your existing strategy, so it’s best to find the stocks on the menu that will fulfil your unique appetite.
Beyond picking individual stocks from companies in the food and drink sector, there are other alternative routes to tap into this market. Here are some of your options:
All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser.
All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.
The food and drink sector serves up a mixture of opportunity and challenge for potential investors. Keeping the pantry stocked is non-negotiable, and consumers are likely to cut back on everything else before taking the scissors to their weekly food shop.
At the same time, the global population is set to grow by 500 million over the next six years, meaning many more hungry mouths to feed. However, treading carefully is key. The industry isn’t immune to the shifting winds of health trends, supply chain hiccups, and the occasional public relations storm, all of which can quickly unsettle even the best food and drink stocks.
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