4 actions to harness the organic food trend

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The U.S. organic food industry is growing without restriction, driven by growing consumer awareness and the demand for sustainable and environmentally friendly farming practices. Investors looking to take advantage of this trend should consider investing in companies looking to meet this demand.

More and more consumers are opting for a healthier lifestyle

The increase in health problems among millennials and Generation Z is a major driver of the demand for foods that are free of pesticides, insecticides and synthetic fertilizers. This keeps food companies on their toes and encourages them to innovate in order to grow organic products.

Organic meat is also in high demand, forcing companies to raise cattle without the use of antibiotics and hormones. This boom in demand for organic products has caught the attention of supermarkets, grocery stores and hypermarkets. This is the reason why one can find Walmart WMT selling organic produce from local farms.

This awareness of health is reflected in a growing concern for the environment. Consumers are increasingly aware of the need for environmentally friendly food that has no impact on their health.

This should further stimulate demand for natural food production in the United States. Additionally, several widely used pesticides can lead to chronic disease and obesity-related health problems, prompting consumers to opt for chemical-free food products.

In fact, the increase in organic farming and consumer demand has led to a rather optimistic outlook for the industry.

U.S. Organic Food Market Outlook Bright

According to Hexa Research, the US organic food market is expected to grow rapidly during the forecast period 2015-2025. This growth can mainly be attributed to the growing demand from health conscious consumers.

In fact, the report states that the U.S. organic food market is expected to reach $ 70.4 billion by 2025.

The 4 best choices

We have therefore selected four companies that you might consider adding to your portfolio. All of these companies are either involved in the production of organic foods and beverages or in the marketing of these products.

Pilgrim’s Pride Society PPC is a producer and distributor of fresh, chilled and value-added chicken products.

Pilgrim’s Pride sports a Rank 1 of Zacks (strong buy). In fact, the company’s share price has outperformed the Zacks Food – Meat Products industry since the start of the year (+ 83.2% vs. + 31.3%). Zacks’ consensus estimate for current year earnings has improved 8.7% in the past 60 days. You can see The full list of today’s Zacks # 1 (strong buy) stocks here.

McCormick & Company, Incorporated MKC is a manufacturer and distributor of spices, seasoning blends, condiments and other flavoring products that cater to a wide range of consumers in the industrial, foodservice, institutional and domestic markets.

McCormick & Company wears a Zacks Rank # 2 (Buy). In fact, the company’s share price has outperformed the Zacks Food – Miscellaneous sector since the start of the year (+ 21.3% vs. + 11%). Zacks’ consensus estimate for current year earnings has risen 0.6% in the past 60 days.

Walmart inc. is a retail and wholesale giant. The supermarket operator offers a wide range of organic grocery items, which include packaged goods and whole food items.

Walmart carries a Zacks Rank # 2. In fact, the company’s share price has outperformed the Zacks Retail – Supermarkets sector since the start of the year (+ 21% vs. + 10.7%). Zacks’ consensus estimate for current year earnings has risen 0.4% in the past 60 days.

Beyond Meat, Inc. BYND is one of the leading producers of plant-based meat in the market. The company focuses on the production of meat substitutes that can benefit human health, promote animal welfare and have a positive impact on climate change.

Beyond Meat carries a Zacks Rank # 2. In fact, the company’s share price has outperformed the Zacks Food – Miscellaneous sector since the start of the year (+ 115.9% vs. + 11%). Zacks’ consensus estimate for current year earnings has risen 11.5% in the past 60 days.

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