Investing in Organics

One way to make money is to pay attention to growing trends and invest in companies that capitalize on them. One such trend is the growth of organic foods. According to the Organic Trade Association, annual sales of organic food and beverages in the United States have grown about 20-fold between 1990 and 2007, to reach about $20 billion. Sales figures for 2008 are estimated to top $23.5 billion. Organic foods and drinks made up 2.8% of all food and drink sales in 2006, and the share is growing at roughly 20% annually.

You might think that to invest in organic foods, you'll need to dig up some small, obscure companies, but you'd be wrong. For one thing, a major seller of organic foods these days is none other than Wal-Mart! And here, from Good Magazine, are some organic producers you may have heard of, with some of their organic brands:

  • Kraft (NYSE: KFT  ) : Boca Foods, Back to Nature
  • PepsiCo (NYSE: PEP  ) : Naked Juice
  • General Mills (NYSE: GIS  ) : Cascadian Farm, Muir Glen
  • Dean Foods: Horizon, The Organic Cow of Vermont, Alta Dena, White Wave/Silk
  • ConAgra (NYSE: CAG  ) : Lightlife, Alexia Foods
  • Kellogg (NYSE: K  ) : Morningstar Farms, Kashi, Gardenburger, Bear Naked
  • Coca-Cola (NYSE: KO  ) : Odwalla
  • M&M Mars: Seeds of Change
  • Hain Celestial (Nasdaq: HAIN  ) : Nile Spice, Health Valley, Bearitos, Earth's Best, Walnut Acres

Hold on
It's true that organic foods have been on a tear -- but many of these stocks haven't been. Hain is off 40% in the past year.

Moreover, 2009 stands a good chance of being different from 2006 and 2007 for the organics industry. With our economy having tanked in 2008, and with many people feeling financial pressures, organic purchasing may suffer a setback.

To me, though, that's all the more reason to keep an eye on these companies. Food companies in general have fared relatively well in recessionary times, and once our economy is back on track, they're likely to do even better, particularly as organic sales rise.

Learn more in "A Healthy Bite Out of Organic Foods."

If you're looking to make money on new trends and revolutionary, innovative businesses, check out our Motley Fool Rule Breakers newsletter service. You can try it for free and access all past issues and recommendations.

Longtime Fool contributor Selena Maranjian owns shares of Coca-Cola, Wal-Mart, and PepsiCo. PepsiCo and Kraft Foods are Motley Fool Income Investor selections. Wal-Mart and Coca-Cola are Motley Fool Inside Value recommendations. Try our investing newsletters free for 30 days. The Motley Fool is Fools writing for Fools.


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  • Report this Comment On January 16, 2009, at 3:30 PM, NylandJim wrote:

    Now hold on a minute. The companies that you mention including Wal-Mart have been actively lobbying congress to undermine the meaning of the word Organic. If you're only in it for the buck go ahead and invest in these companies, but if you have a shred of moral decency and want to learn more about companies that truly care about organic foods, then check out the Organic Consumers Association...

    http://www.organicconsumers.org/

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