The global food and grocery retail market was worth almost $11.9 trillion in 2024, and it’s likely to grow right along with the population in coming years. Some analysts project the industry could be worth $14.8 trillion by the start of the 2030s. It's a huge pie with a lot of slices. There are plenty of companies competing for consumers’ food dollars.
Best food stocks to buy in 2025
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
1. General Mills
Packaged food giant General Mills (GIS 0.24%) 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
2. Tyson Foods
Meat products will likely continue to be a staple of U.S. diets. If you’re looking to invest in the meat industry, Tyson Foods (TSN -0.11%) is a reasonable choice, especially if you want to bet on the continued consumption of meat.
Tyson certainly doesn’t have the pricing power of a packaged food company with well-known brands, given that meat is largely a commodity. Meat processing in the U.S. is highly concentrated among a small number of companies, such as Tyson, owning a relatively small number of massive facilities. The company’s results are partly dictated by supply and demand for beef, pork, and chicken, with margins heavily influenced by pricing.
The meat industry is contending with factors like inflation that may lead consumers to choose cheaper cuts or reduce meat consumption. Tyson's beef business has been facing challenges, including a decline in the nation's cattle herds.
To address these challenges, Tyson Foods has announced the closure of several plants. The company is focusing on its diversified protein portfolio, including chicken, beef, and pork, to meet consumer demand. Tyson Foods is still reporting profits, and revenue is growing.
In the first quarter of the company's fiscal 2025, sales totaled $13.6 billion, up 2.3% from the prior year. The company also reported operating income of $580 million, up a notable 151% year over year. The first quarter of fiscal 2025 was also the company's third consecutive quarter of year-over-year growth in sales and operating income as the company works to get back to consistent financial growth.
3. Mondelez International
3. Mondelez International
Like General Mills, Mondelez International (MDLZ 0.59%) 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
4. PepsiCo
PepsiCo (PEP -0.73%) is another packaged food company with a large portfolio of leading brands. On the beverage side of the business, Pepsi, Mountain Dew, and Gatorade top the list. On the food side, Lay’s, Doritos, Quaker Oats, and Cheetos are just a few examples from the company’s portfolio.
Over the last few years, PepsiCo has faced challenges. These have included declining sales volumes in North America, particularly in its snack and beverage businesses, due to consumer pullback amid inflation and shifting preferences.
Consumers are becoming more price-conscious and are reducing spending on discretionary items like snacks and sugary drinks, impacting PepsiCo's core businesses. The rise of health-conscious eating habits and the popularity of weight-loss drugs are also contributing to a decline in demand for traditional snacks and beverages.
However, PepsiCo has consistently shown the ability to increase prices through the years without significantly affecting consumer demand, allowing the company to pass on higher costs and maintain profitability. PepsiCo is adopting a more granular approach to pricing, focusing on value interventions for specific products and channels rather than a blanket promotional strategy.
The company's international business has been a bright spot, helping to offset weakness in its North American operations and further strengthening its overall pricing power. In 2024, PepsiCo's net revenue was approximately $92 billion, up slightly from the prior year, with net income growing about 6% to $9.6 billion.
PepsiCo has paid consecutive quarterly cash dividends since 1965, and 2025 was the company's 53rd consecutive annual dividend increase. The stock yields 3.6% based on current share prices, a yield that has risen lately as share price performance has been weaker.
Food industry sectors to watch
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 (BYND -5.71%) 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.
Related investing topics
Grocery store stocks
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 (SFM -2.0%). 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.
