Investing in Food Stocks

Best food stocks to buy in 2025

The best food companies have strong brands that compel consumers to pay up for their products, and they also enjoy economies of scale that keep costs low. Pricing power and cost advantages are particularly important now, with inflation squeezing budgets and supply chain costs rising.

While there are many food stocks to choose from, not all of them belong in your portfolio. Here are a few that stand out as the best food stocks:

1. General Mills

Packaged food giant General Mills (NYSE:GIS) owns a wide variety of well-known brands. The company’s brand portfolio includes Pillsbury, Cheerios, Häagen-Dazs, Progresso, Green Giant, Yoplait, and many others.

Elevated inflation and economic uncertainty are likely to change consumer behavior, but General Mills has many strong brands. General Mills has also acknowledged the need to address higher prices and is actively working to bring consumers greater value through price reductions and promotions. While a slowdown in spending on snacking has hit General Mills' top and bottom lines recently, the company is still profitable and maintains a strong commitment to its dividend.

General Mills’ pet segment, the result of the 2018 acquisition of Blue Buffalo, could be particularly well positioned over the long run. Pet ownership has boomed in recent years, and sales of premium pet foods have been on the rise for years. With pets increasingly viewed as part of the family, pet owners may be reluctant to trade down to cheaper pet food options.

General Mills stock trades for around 13 times forward earnings, and it sports a dividend yield of roughly 4%, which has risen as share price performance has been tepid at best. There’s plenty of economic uncertainty right now, but General Mills’ pricing power should help see it through.

2. Tyson Foods

3. Mondelez International

Like General Mills, Mondelez International (NASDAQ:MDLZ) boasts a long list of well-known brands. These include Cadbury, Chips Ahoy!, Oreo, Philadelphia, Ritz, Wheat Thins, and many others. The company’s sells products in more than 150 countries. Mondelez's business is structured around several key segments, each featuring a portfolio of brands, including biscuits, chocolate, gum, and candy.

Rising cocoa prices are significantly affecting Mondelez, with the company forecasting a potential 10% reduction in adjusted earnings per share in 2025 due to "unprecedented cocoa cost inflation." However, the company is still coming from a position of financial strength.

In 2024, Mondelez reported net revenues of $36.4 billion, up 1.2% year-over-year. The company also generated cash provided by operating activities of $4.9 billion and free cash flow of $3.5 billion in the 12-month period. Net earnings for the year totaled $4.6 billion.

Mondelez’s geographic diversification and its strong slate of brands are attractive assets as economic uncertainty grows. The company has consistently paid a dividend that it has raised every year for over a decade, and which yields about 2.8% based on share prices in early 2025.

4. PepsiCo

Food industry sectors to watch

While General Mills, Tyson Foods, Mondelez International, and PepsiCo are great overall picks in the food industry, companies in more specialized sectors are worth a look as well. Here are a few categories to consider.

Plant-based food stocks

U.S. consumers already derive the majority of their calories from plant-based sources, and the companies above offer plenty of plant-based options. A big trend in recent years has been plant-based foods made to look and taste like meat and other animal-based foods.

Beyond Meat (NASDAQ:BYND) is a pure-play plant-based food stock offering a variety of products built around pea protein. The company has run into some headwinds in recent years, not to mention an onslaught of competitors.

The stock has taken a huge hit, but Beyond Meat is a stock to consider if you believe in the long-term potential of plant-based protein. It's going to be a very rough road that may not end well, so investors need to carefully weigh the risks.

Grocery store stocks

For the most part, grocery stores have a limited ability to pass off higher costs to consumers. Inflation may put some pressure on the grocery industry's profits, but that’s not a reason to avoid the industry entirely.

One interesting grocery store stock is Sprouts Farmers Market (NASDAQ:SFM). Sprouts is a small chain with a few hundred stores and is heavily focused on specialty products. The company derives around two-thirds of its sales from “attribute-based” products -- with examples of those attributes including organic, paleo, keto, and plant-based. This differentiation from legacy grocery stores, combined with the potential to greatly expand its store network, makes Sprouts a food stock worth watching.