When looking for investment ideas you may want to look toward the organic food industry. Consumers are looking for ways to eat healthier resulting in a prolonged life and lower medical bills. Trade publication, The Natural Foods Merchandiser said that sales for all natural products increased 9% industrywide in 2012 . Organic grocer Whole Foods Market (NASDAQ:WFM), its distributor United Natural Foods (NASDAQ:UNFI), and "plant based food and beverages" company WhiteWave Foods (NYSE:WWAV) represent significant players in this growing industry.

All natural grocer
Whole Food's Co-CEO John Mackey co-authored Conscious Capitalism, a book that emphasizes decent treatment of employees, vendors, and other stakeholders. This philosophical underpinning represents an added public relations bonus for the company. Consumers who shop at its stores want a better life for themselves and for the world they live in and Whole Foods' endorsement of a humane capitalistic approach only serves to build rapport with its clientele.  Moreover, employees assign Whole Foods a Glassdoor rating of 3.6 out of 5.  Whole Foods' viewpoint serves the company well. Its revenue increased 10% last year while expanding margins. Same store sales increased 7% in 2013 .

Organic Distributor
United Natural Foods caters to the consumer's desire for healthy food on the distribution level. It serves as the main distributor to Whole Foods which represented 36% of United Natural Foods' revenue last year.   One interesting trend surrounding this company involves increasing sales coming from conventional supermarkets as they observe the slow consumer shift toward healthier foods. Mass market chains represented 25% of United Natural Foods' sales up from 24% in 2012 and 22% in 2011 according to United Natural Foods form 10-K. Last year, United Natural Foods' revenue and net income clocked in growth of 16% and 18% respectively.  This company claws its way to market dominance internally and via acquisitions of smaller distributorships. 

"Plant based food and beverages"
According to its form 10-K WhiteWave sells organic beverages such as soymilk, coconut milk, and almond milk in addition to other soy bean based products. It also sells dairy creamers with the well-known Land O' Lakes label. Recently the company expanded its natural selection beyond dairy by purchasing Earthbound Farms.  WhiteWave also expanded its year to date revenue an impressive 11%   and paid down debt translating into lower future interest expense .

Looking ahead
While Whole Foods operates in a growing industry it still has plenty of room to expand before reaching market saturation. Currently the company only commands a 3.5% market share in the food retailer's sector according to the Bloomberg Industry Leaderboard . It opened 32 stores last year. As of the most recent quarter, Whole Foods operated only 367 stores. Moreover, Whole Foods increased its dividend 20% for FY 2014.  You can expect dividend increases to continue as the company expands.

While United Natural Foods shows impressive revenue and profitability gains its cash flow leaves much to be desired. Last year, its free cash flow came in at a negative $19.9 million with cash  coming in at a minuscule 1% of stockholder's equity as of the end of last year . Naturally companies undergoing an aggressive expansion stage will spend heavily on new buildings and technology; however, corporations like individuals need a cash cushion for difficult times. Investors need to watch for any bumps in the road for this one. Growth for United Natural Foods' will come from Whole Foods expansion and the increased inclination for traditional grocery stores to carry organic food.

WhiteWave remains underpenetrated in places like Europe and China. In 2012, only 16% of the company's sales came from Europe.  Recently, the company entered a joint venture agreement with China Mengniu Dairy Company in an effort to make inroads into that market.  On a qualitative note its culture of innovation should bode well for new products and expansion of its scale .

Overall, these companies definitely warrant more of your research time and slots on your Motley Fool Watchlist.

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John Mackey, co-CEO of Whole Foods Market, is a member of The Motley Fool's board of directors. William Bias has no position in any stocks mentioned. The Motley Fool recommends Whole Foods Market. The Motley Fool owns shares of WhiteWave Foods and Whole Foods Market. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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