(C) Reuters. 3 Stocks That Will Benefit from the Expanding Organic Food Industry
Heightened consumer concerns over health and immunity made many people shift to organic food products during the pandemic. This has motivated companies to launch new products to capitalize on the demand. While rising commodity prices are expected to negatively impact food companies, the growing demand for organic food should benefit Sprouts Farmers (NASDAQ:SFM), Natural Grocers (NYSE:NGVC) by Vitamin Cottage (NGVC), and Lifeway Foods (LWAY) in the near term. Let’s discuss.Rising concerns around immunity and hygiene amid the COVID-19 pandemic have motivated many people to shift to organic food products. In response, many food companies have added organic products to their offerings to capitalize on the trend.
However, the huge demand for basic ingredients, like wheat, corn and soya from China, is driving an increase in food prices. In the United States, food prices have risen 3.5% over the past 12 months. However, for companies that are expanding their organic food offerings, the rising demand for organic foods is expected to more than offset the decline in their profits due to the rise in overall food prices According to a Globe Newswire report released last December, the global organic food market is expected to grow at 12.2% CAGR to reach $272.18 billion by 2027.
Given this backdrop, we believe organic food companies Sprouts Farmers Market, Inc. (SFM), Natural Grocers by Vitamin Cottage, Inc. (NGVC), and Lifeway Foods, Inc. (LWAY) have the potential to deliver solid returns in the near term.
3 Stocks That Will Benefit from the Expanding Organic Food Industry
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