In this article, we will explore the 10 best organic food and farming stocks to invest in.
The Rise of Organic Food and Farming
Organic farming practices focus on using natural methods to cultivate crops, avoiding synthetic fertilizers and pesticides. This approach not only enhances the quality of food but also contributes to preserving biodiversity and maintaining healthy ecosystems. The organic food and farming sector provides economic benefits as well, creating jobs and supporting rural communities.
The global organic food and farming industry has experienced significant growth in recent years, reflecting a shift in consumer preferences towards healthier and more sustainable food options. According to a report by The Business Research Company, the global organic food market was valued at $244.82 billion in 2023. The market is expected to grow at a compound annual growth rate (CAGR) of 15.1% during 2024-2028 to reach a value of $489.75 billion by the end of the forecast period. This growth is largely driven by increasing awareness of health benefits associated with organic products and a growing concern for environmental sustainability.
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The 25th edition of the yearbook “The World of Organic Agriculture,” published by the Research Institute of Organic Agriculture (FiBL) and IFOAM – Organics International, highlights significant growth in the organic farming sector. Presented in February 2024 at the BIOFACH trade fair in Nuremberg, Germany, the report reveals that by the end of 2022, the area under organic management reached 96.4 million hectares. This marks an impressive increase of 26.6% or 20.3 million hectares compared to the previous year.
Australia continues to lead the world in organic farming area, boasting 53 million hectares, an increase of 17.3 million hectares. The report shows that organic farming area increased across all continents, reflecting a global trend towards more sustainable agricultural practices. In terms of producers, the number of organic farmers worldwide rose to 4.5 million in 2022, which is nearly a 26% increase from 2021.
Support for organic agriculture is gaining momentum globally, with many countries implementing action plans to promote organic farming practices. The number of fully implemented national regulations for organic agriculture rose to 75 in 2023, indicating a commitment to enhancing and regulating this sector.
According to the report, the global organic market reached nearly EUR 135 billion in 2022. The United States was the largest market, valued at approximately EUR 56.6 billion, followed by Germany at EUR 15.3 billion and China at EUR 12.4 billion. While some European countries saw a decline in organic sales, Canada and the US experienced growth in retail sales, with increases of 9.7% and 4.4%, respectively. These figures indicate that consumer interest in organic products is strong, particularly in North America, where health consciousness is driving demand.
With this background in mind, let’s take a look at the 10 best organic food and farming stocks to invest in.
A busy farmer in a field with an abundant crop of organic food.
Methodology
To compile our list of the 10 best organic food and farming stocks to invest in, we looked for the largest organic food and farming companies. We also reviewed our own rankings and consulted various online resources to compile a list of the best organic food and farming stocks. Next, we focused on the top 10 stocks most favored by institutional investors. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s Q3 2024 database of 900 elite hedge funds. The 10 best organic food and farming stocks to invest in are ranked in ascending order based on the number of hedge funds holding stakes in them as of Q3 2024.
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10 Best Organic Food and Farming Stocks To Invest In
10. Gladstone Land Corporation (NASDAQ:LAND)
Number of Hedge Fund Holders: 5
Gladstone Land Corporation (NASDAQ:LAND) is a real estate investment trust (REIT) that focuses on acquiring and owning farmland and farm-related properties in key agricultural markets across the US. The company currently owns 168 farms, totaling approximately 112,000 acres in 15 states, along with nearly 54,000 acre-feet of water assets in California. The company’s farms primarily produce annual row crops like berries and vegetables, as well as permanent crops such as almonds, apples, and pistachios. Notably, about 30% of its fresh produce acreage is organic or transitioning to organic, highlighting the company’s commitment to promoting organic farming practices. Gladstone Land Corporation (NASDAQ:LAND) is one of the best organic food and farming stocks to invest in.
In the third quarter of 2024, the company executed 21 new or amended lease agreements. This included renewing eight leases on annual row crop farms, which are expected to increase annual net operating income by approximately $309,000. However, some leases on permanent crop farms resulted in a projected decrease in net operating income by about $441,000. In October 2024, Gladstone Land Corporation (NASDAQ:LAND) announced the sale of 11 blueberry farms for around $5 million. This strategic move allows the company to focus on more profitable ventures while maintaining a strong level of liquidity.
In October, the company declared a monthly dividend of $0.0467 per share for the fourth quarter, totaling $0.1401 for the quarter. With its diverse portfolio of farmland, commitment to organic farming practices, and strategic management aimed at increasing profitability, Gladstone Land Corporation (NASDAQ:LAND) presents an attractive investment opportunity. The ongoing demand for fresh produce and the company’s focus on improving its operations make it a compelling choice for investors interested in the organic food sector.
9. Natural Grocers by Vitamin Cottage Inc. (NYSE:NGVC)
Number of Hedge Fund Holders: 9
Natural Grocers by Vitamin Cottage Inc. (NYSE:NGVC) is a specialty retailer focused on natural and organic groceries, dietary supplements, and body care products. The company emphasizes high-quality standards, ensuring that its products do not contain artificial colors, flavors, or preservatives. Natural Grocers by Vitamin Cottage Inc. (NYSE:NGVC) exclusively sells USDA-certified organic produce, pasture-raised dairy products, and free-range eggs. NGVC is one of the best food stocks to buy.
In the fourth quarter of fiscal 2024, Natural Grocers by Vitamin Cottage Inc. (NYSE:NGVC) reported a 9.3% increase year-over-year in net sales, reaching $322.7 million. Net income surged by 53.2% to $9.0 million during the same period. This growth reflects the company’s successful strategy of enhancing customer engagement and expanding its product offerings. Throughout fiscal 2024, Natural Grocers by Vitamin Cottage Inc. (NYSE:NGVC) introduced 80 new products, contributing to its diverse inventory. The company opened four new stores during the year, bringing its total to 169 locations across 21 states. These expansions indicate a commitment to growth and increasing market presence.
In fiscal 2024, Natural Grocers by Vitamin Cottage Inc. (NYSE:NGVC) generated $73.8 million in cash from operations while investing $38.6 million in capital expenditures, primarily for new and remodeled stores. Over the past five years, the company has achieved a remarkable 37% increase in net sales, with diluted earnings per share more than tripling during this time. During this period, Natural Grocers by Vitamin Cottage Inc. (NYSE:NGVC) also returned $108 million to shareholders through dividends, highlighting its strong financial health and commitment to providing value to investors.
With its focus on high-quality organic products, consistent sales growth, and strategic expansion plans, Natural Grocers by Vitamin Cottage Inc. (NYSE:NGVC) presents a compelling investment opportunity in the organic food sector.
8. SunOpta Inc. (NASDAQ:STKL)
Number of Hedge Fund Holders: 18
SunOpta Inc. (NASDAQ:STKL) is a prominent company that focuses on sourcing, processing, and producing organic and non-GMO plant-based and specialty products. With over 200 organic certified items and 30 branded products verified by the Non-GMO Project, the company offers a diverse range of products, including plant-based beverages, fruit snacks, nutritional drinks, broths, and teas. These products are available through various channels such as retail, food service, and e-commerce. SunOpta Inc. (NASDAQ:STKL) is one of the best organic food and farming stocks to invest in.
In the third quarter of 2024, the company reported impressive financial results, with revenues increasing by 15.5% to $176.2 million compared to $152.5 million in the same period last year. This growth was primarily driven by a remarkable 20.6% rise in volume. Additionally, gross profit rose by 16.4%, reaching $23.6 million. SunOpta Inc. (NASDAQ:STKL) attributes its success to a strong competitive position and a broad customer base.
The company is actively investing in its supply chain to support ongoing growth and improve operational processes. Recent productivity initiatives are already showing positive results, leading to enhanced capacity within existing facilities. As of Q3 2024, SunOpta Inc. (NASDAQ:STKL) has achieved significant output increases in its aseptic and fruit snack facilities, with production up 18% and 49% compared to the same quarter in the previous year, respectively. With a clear vision for sustainable growth and a focus on increasing returns on invested capital, SunOpta Inc. (NASDAQ:STKL) is well-positioned for future success.
7. United Natural Foods Inc. (NYSE:UNFI)
Number of Hedge Fund Holders: 22
United Natural Foods Inc. (NYSE:UNFI) is a leading distributor of natural and organic foods in North America. The company supplies over 250,000 products, including organic, conventional, and specialty items, to more than 30,000 locations across the United States and Canada. UNFI serves various types of customers, such as natural product superstores, independent retailers, eCommerce providers, and food service providers. United Natural Foods Inc. (NYSE:UNFI) is one of the best food stocks to buy.
The company’s management believes that United Natural Foods Inc.’s (NYSE:UNFI) scale and expertise in natural and organic products position it well for future growth. The ongoing demand for healthier food options continues to rise, making UNFI a strong player in this evolving market.
In the first quarter of fiscal 2025, the company reported a 4.2% increase in net sales, reaching $7.9 billion. Adjusted EBITDA also saw a significant rise of 14.5%, totaling $134 million. This positive performance reflects the company’s effective execution of its multi-year strategy and value-creation initiatives that have strengthened relationships with existing customers. United Natural Foods Inc. (NYSE:UNFI) is focused on optimizing its distribution network, having closed several distribution centers while enhancing operations at others. The company also moved natural volumes from York to a larger, soon-to-be automated facility in Manchester. These changes are expected to create greater efficiencies and improve service delivery.
With its solid financial performance and strategic initiatives for operational efficiency and growth, United Natural Foods Inc. (NYSE:UNFI) represents an attractive investment opportunity in the organic food sector. Miller Value Partners stated the following regarding UNFI in its “Deep Value Select Strategy” third-quarter 2024 investor letter:
“During the quarter, our two largest positive contributors were Gannett (GCI), whose market share price up 20% and United Natural Foods Inc. (NYSE:UNFI), with a market share price up 31%. United Natural Foods’ share price continues to recover from recent 20-year lows however is still down 60% from its former high. The company’s new CFO recently highlighted a new three-year transformation plan focused on building market share in the natural foods sector, expanding higher margin digital services and rolling out six sigma/lean initiatives to improve operating efficiencies. UNFI is also rolling out a simplified contract structure with their clients which will eliminate layers of complexity positioning the company to achieve greater operating efficiencies overtime. There remains a wide gap between relatively low UNFI margins, and those some smaller distributors are able to achieve. Success on the transformation plan should allow the company to not only narrow that gap overtime but exceed their smaller peers due to their greater size, scale, and higher margin proprietary service offerings. The new transformation initiatives have potential to accelerate profit growth and significantly improve future free cash flow generation. UNFI also has an extensive asset base, and a distribution network across all 50 states and 10 Canadian providences. The company has an extensive distribution and warehouse network, providing a significant margin of safety. As the transformation plan progresses the company says it will focus on optimizing their distribution assets to further improve asset utilization and enhance company financial returns. We believe UNFI long-term upside potential may be multiples of the current share price given our estimation of their long-term earnings power, near 30% discount to book value and Enterprise Value to Revenue of only .1 times! The greatest near-term risk in the company transformation plan would be a delayed recovery in company margins due to the unexpected disruptions from consolidating the Firm’s distribution network.”
6. Dole plc (NYSE:DOLE)
Number of Hedge Fund Holders: 24
Dole plc (NYSE:DOLE) is a leading global provider of fresh fruits and vegetables, operating in over 30 countries and serving customers in more than 75 markets around the world. The company has an extensive vertically integrated supply chain, which includes over 250 facilities such as farms, packhouses, manufacturing sites, cold storage warehousing, and distribution hubs. The company markets and distributes over 300 lines of fresh produce, including both common and exotic items, along with a selection of organic fruits, vegetables, and salads. Dole plc (NYSE:DOLE) is one of the best food stocks to buy.
In the third quarter of 2024, the company reported revenues of $2.1 billion, reflecting a 1% increase compared to the previous year. The fresh fruit segment performed particularly well, with a 6.6% rise in revenue driven by increased sales of bananas and higher prices for both bananas and pineapples. Notably, Dole plc (NYSE:DOLE) reported that there was strong demand for organic bananas during this period, highlighting the growing consumer interest in organic produce.
With its strong market position in fresh produce, commitment to organic offerings, and strategic initiatives for growth and efficiency, Dole plc (NYSE:DOLE) presents a compelling investment opportunity in the organic food sector.
5. The Hain Celestial Group Inc. (NASDAQ:HAIN)
Number of Hedge Fund Holders: 25
The Hain Celestial Group Inc. (NASDAQ:HAIN) is a prominent US-based company specializing in natural and organic foods, as well as personal-care products. It operates in over 75 countries, offering a wide range of items across snacks, baby products, beverages, meal components, and personal care. The Hain Celestial Group Inc. (NASDAQ:HAIN) is one of the best organic food stocks to buy.
In its fiscal Q1 2024 earnings call, the company’s management highlighted the significant growth in the organic formula category. The company is focused on regaining its leadership position by promoting its USDA-certified organic infant formula, which is non-GMO and designed to support brain and eye health. The Hain Celestial Group Inc. (NASDAQ:HAIN) offers a variety of organic options, including dairy and toddler formulations, catering to the needs of parents and babies. On December 23, 2024, Earth’s Best, the company’s organic baby brand in America, announced that its complete line of organic infant formula and toddler milk drinks is fully back in stock.
The company’s performance in the first quarter reflects a solid foundation for growth as The Hain Celestial Group Inc. (NASDAQ:HAIN) continues to streamline its portfolio and improve its operational efficiency, leading to gross margin expansion. The management expects growth to accelerate in the latter half of FY25 due to several factors, including better timing for snack promotions, the recovery of infant formula supplies, and strategic brand building.
Choice Equities Capital Management stated the following regarding The Hain Celestial Group Inc. (NASDAQ:HAIN) in its third-quarter 2024 investor letter:
“The Hain Celestial Group Inc. (NASDAQ:HAIN) – Hain Celestial Group is a recent addition to the portfolio. Since taking the helm in January 2023, CEO Wendy Davidson has been instrumental in driving the company’s transformation. Davidson has simplified the business by divesting non-core brands, focusing on higher-margin, core products, and implementing effective cost-saving measures. These initiatives have already led to noticeable improvements in operational efficiency, lower working capital needs, margin expansion, and a more consistent and desirable brand portfolio, positioning the company for attractive sustainable growth. As a result of these efforts, which have positioned the company well for several dollars of free cash flow per share in coming years, Hain Celestial Group now has lower leverage than most of its peers and stronger top and bottom-line growth prospects, yet the company trades at a highly discounted multiple on a forward-looking view.”
4. General Mills Inc. (NYSE:GIS)
Number of Hedge Fund Holders: 30
General Mills Inc. (NYSE:GIS) is the leading provider of natural and organic packaged foods in the US. The company offers a variety of organic products through its Cascadian Farm and Muir Glen brands. These include frozen fruits and vegetables, ready-to-eat cereals, snack bars, and fruit spreads. This diverse portfolio caters to the growing consumer demand for healthy and organic options.
The company also partners with farmers to advance organic agriculture. In fiscal 2018, General Mills Inc. (NYSE:GIS) partnered with Gunsmoke Farms LLC to convert 34,000 acres of conventional farmland into certified organic land by 2020. This initiative would help supply organic wheat for products like Annie’s pasta, showcasing the company’s dedication to sustainable sourcing.
Over the years, the company has introduced a variety of organic packaged foods. In October 2022, General Mills Inc. (NYSE:GIS) launched new granola bars from Annie’s and Cascadian Farm made in a peanut-free facility. These bars are USDA-certified organic, appealing to health-conscious consumers looking for convenient snack options. With a strong portfolio of beloved brands and a clear strategy for growth in the organic sector, General Mills Inc. (NYSE:GIS) ranks among the best organic food and farming stocks to invest in.
3. Sprouts Farmers Market Inc. (NASDAQ:SFM)
Number of Hedge Fund Holders: 37
Sprouts Farmers Market Inc. (NASDAQ:SFM) is a prominent specialty retailer in the US, focusing on fresh, natural, and organic foods. With over 430 stores across 24 states, the company is known for offering a variety of healthy products, including organic, plant-based, and gluten-free options. Sprouts Farmers Market Inc. (NASDAQ:SFM) is one of the best organic food stocks to invest in.
In the third quarter of 2024, the company reported impressive financial results, with net sales reaching $1.9 billion, marking a 14% increase from the same period in 2023. A significant highlight for Sprouts Farmers Market Inc. (NASDAQ:SFM) is its focus on organic produce. Organic items now account for over 46% of total produce sales, reflecting a growing consumer preference for healthier options. This shift has helped Sprouts Farmers Market Inc. (NASDAQ:SFM) differentiate itself in a competitive market.
The company also opened nine new stores during the third quarter, contributing to its expansion plans, which include nearly 110 approved new stores in the pipeline. For 2024, Sprouts Farmers Market Inc. (NASDAQ:SFM) now expects to open a total of 33 new stores, a slight adjustment from its previous guidance of 35. This change is primarily due to the effects of Hurricane Milton, and the company has chosen to postpone the opening of two stores in Florida until the first quarter of 2025.
E-commerce sales have also surged by 36%, representing 14.5% of total sales for the third quarter. This growth indicates that Sprouts Farmers Market Inc. (NASDAQ:SFM) is effectively meeting the increasing demand for online shopping options among health-conscious consumers. With its strategic focus on organic products, robust sales growth, and commitment to expanding its store footprint, Sprouts Farmers Market Inc. (NASDAQ:SFM) presents an attractive investment opportunity in the organic food sector.
As of the third quarter of 2024, SFM was held by 37 hedge funds, according to Insider Monkey’s database. First Pacific Advisors stated the following regarding Sprouts Farmers Market Inc. (NASDAQ:SFM) in its “FPA Queens Road Small Cap Value Fund” third quarter 2024 investor letter:
“Sprouts Farmers Market Inc. (NASDAQ:SFM) is a grocer focusing on fresh, natural and organic products. The company has best in class margins, attractive returns on capital, great new store economics, and is accelerating unit growth from 12 stores a year to 35 stores in 2024 on a base of roughly 400 stores. Over the past year, the stock has performed well after reporting strong operating results and from a low initial valuation. The stock price jumped when the company reported 2023 Q4 results and gave strong 2024 guidance. The share price jumped again when they reported 2024 Q2 numbers. We have largely maintained our position and allowed it to appreciate, only beginning to trim in 2024 Q3. Although SFM’s share price has increased faster than bottom-line results, we believe SFM still trades in the “range of reasonableness” for a high-quality, non-cyclical franchise that can reinvest capital at attractive rates of return.”
2. The Kroger Co. (NYSE:KR)
Number of Hedge Fund Holders: 39
The Kroger Co. (NYSE:KR) is a leading food retailer that ranks among the best food stocks to buy. It operates approximately 2,800 stores across 35 states under two dozen banners. The company has made significant strides in the organic food market with its Simple Truth brand, which celebrated its tenth anniversary in January 2024. This brand, valued at over $3 billion, offers more than 1,500 products that are free from artificial ingredients and preservatives, catering to health-conscious consumers.
The company’s commitment to organic products is evident in its extensive range, including organic meats, produce, dairy, and even personal care items. This diverse selection not only meets growing consumer demand but also positions The Kroger Co. (NYSE:KR) as a competitive player in the organic sector. The company provides a convenient shopping experience with options to browse in-store, select curbside pickup, or enjoy speedy delivery of organic food and meat. This flexibility not only enhances customer satisfaction but also positions the brand favorably in the growing organic market.
Innovation is central to The Kroger Co.’s (NYSE:KR) growth strategy. The company leverages data insights to introduce new products that align with consumer trends in organic and multicultural foods. This approach helps differentiate The Kroger Co. (NYSE:KR) from national brands and other private labels, fostering customer loyalty through unique offerings. Overall, in the third quarter of 2024, the company introduced 226 new items through its own brands. Given its robust performance and commitment to fresh and organic food products, The Kroger Co. (NYSE:KR) represents a strong investment opportunity in the organic food sector.
1. Albertsons Companies Inc. (NYSE:ACI)
Number of Hedge Fund Holders: 58
Albertsons Companies Inc. (NYSE:ACI) is a major player in the US food and drug retail sector, operating over 2,200 stores across 34 states and the District of Columbia. The company is known for its diverse range of banners, including Albertsons, Safeway, and Vons, among others. This extensive network is supported by 22 distribution centers and 19 manufacturing plants, which enhances its operational efficiency and product availability. ACI ranks among the best food stocks to invest in.
A key component of Albertsons Companies Inc.’s (NYSE:ACI) strategy is its commitment to organic products through its own brand, O Organics. Launched in 2005 with just 150 USDA Certified Organic items, O Organics has grown significantly. By 2018, it had surpassed $1 billion in sales with over 1,000 products. The brand now offers more than 1,500 organic items, including fresh produce, dairy, meats, snacks, baby food and Fair Trade Certified coffee. This expansion reflects a strong alignment with consumer demand for healthy and sustainable food options.
Albertsons Companies Inc.’s (NYSE:ACI) focus on affordability and accessibility in organic foods positions it well within the market. The company ensures that ingredients in O Organics products are produced without the use of most synthetic pesticides and fertilizers, antibiotics, added growth hormones, or genetically modified organisms (GMOs).
Additionally, the company is focused on investing in growing its business and increasing its digital sales. Through the first 28 weeks of fiscal 2024, Albertsons Companies Inc. (NYSE:ACI) reported capital expenditures of $952.3 million, which included store remodels and continued investment in its digital and technology platforms. In the second quarter of fiscal 2024, the company’s digital sales saw a notable increase of 24%. With its strategic focus on organic products and commitment to innovation, Albertsons Companies Inc. (NYSE:ACI) presents a compelling case for investors interested in the organic food sector.
Overall, ACI ranks first among the 10 best organic food and farming stocks to invest in. While we acknowledge the potential of organic food and farming companies, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ACI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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