Investing in Food Stocks

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. Food stocks represent shares in companies involved in the food industry that are listed on stock exchanges, which allows the investing public to buy and sell ownership in them.

Some analysts project the food industry could be worth $14.8 trillion by the start of the 2030s. It's a huge pie with a lot of slices, and 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 0.48%) 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 several acquisitions including the 2018 purchase of Blue Buffalo, could be particularly well positioned over the long run.

General Mills stock trades for around 12 times forward earnings, and it sports a dividend yield of roughly 4.9%, 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 -0.14%) 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.

3. Mondelez International

3. Mondelez International

Like General Mills, Mondelez International (MDLZ 0.66%) 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, and 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 yielded about 3.2% based on share prices in late 2025.

4. PepsiCo

4. PepsiCo

PepsiCo (PEP -0.1%) 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.

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.

PepsiCo has paid consecutive quarterly cash dividends since 1965, and 2025 was the company's 53rd consecutive annual dividend increase. The stock yields just shy of 4% 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 -2.47%) 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

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 0.2%). 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.

Pros and cons of investing in food stocks

Pros and cons of investing in food stocks

As a consumer staple, food is always in demand, which tends to make it a defensive sector that performs well during market downturns. Here are some other pros to consider if you are thinking about investing in food stocks:

• Reliable dividends: Many established food companies generate stable earnings and cash flow, which they often return to investors in the form of reliable dividends. This can provide a steady income stream for investors focused on building long-term wealth.
• Inflation hedge: Companies with strong brand loyalty and pricing power can pass on rising costs to consumers through price increases. This helps protect their profitability during periods of inflation.
• Familiarity and accessibility: Many food stocks represent brands that investors use and trust in their daily lives, and this familiarity can be a great starting point for those new to the market.

As with any stock or stock sector, there are always cons that you should factor into the picture before you hit the buy button. A few downsides to consider include:

• Slow growth: Compared to high-growth sectors like technology, the food industry tends to deliver slower, more modest growth. This can result in less dramatic stock price movements and limited upside potential.
• Low profit margins: The food industry is known for its modest net income margins, which can make companies particularly sensitive to supply chain disruptions and input costs.
• Sensitivity to external factors: Food stocks are vulnerable to a variety of external risks, including geopolitical strife, disease outbreaks, and weather events.
• Changing consumer preferences: Public tastes can shift rapidly toward healthier, more responsibly sourced, or trendy food options. Companies that fail to innovate and adapt can underperform as a result.

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How to invest in food stocks

How to invest in food stocks

If you want to invest in food stocks, you can follow the same investment process you would for buying shares of any other publicly traded company. Here's what you need to know.

• Open your brokerage app: Log in to your brokerage account where you handle your investments.
• Search for the stock: Enter the ticker or company name into the search bar to bring up the stock's trading page.
• Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
• Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
• Submit your order: Confirm the details and submit your buy order.
• Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.

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