In this article, we will look at the 10 Best Packaged Food Stocks to Buy Now.
The American Packaged Food Industry
According to a report by Grand View Research, the US packaged food market had a size of $1.03 trillion in 2021. It is expected to grow at a compound annual growth rate (CAGR) of 4.8% between 2022 and 2030. The primary growth drivers for the industry include the rising consumer inclination for convenience coupled with consumers’ hectic lives and work schedules. In addition, the rise in e-commerce sales in the US is another significant factor supporting the sale of packaged food nationwide. Growing innovation in plant-based products, food packaging, healthy ingredients, and bold flavors is expected to continue driving this growth in the United States in the coming years.
READ ALSO: 14 Best Farmland and Agriculture Stocks Buy Now and 10 Best Consumer Staples Stocks to Buy According to Analysts.
Are Consumer Staples a Safe Haven Amid Market Uncertainty?
On April 8, BofA Securities analysts Bryan D. Spillane, Lisa K. Lewandowski, and Peter T. Galbo released their research findings on the consumer staples industry and their expected performance in case of a potential recession. The analysts iterated that in a majority of recent recessions, consumer staples have historically outperformed the S&P 500 as a sector. This trend points towards a defensive edge for the sector. However, the analysts also cautioned that current market conditions, including weak volume growth and lingering high prices, should be considered, as they may affect the sector’s resilience in a future downturn. Despite these concerns, consumer staples make up an appealing sector for investors and experts due to their limited exposure to the recently imposed tariffs, potentially helping sustain valuation multiples.
During recessions, the stock prices in the consumer staples sector are typically affected by earnings per share (EPS) instead of sales growth. Yahoo! Finance reported that sector analysis highlights forward EPS accounting for more than 90% of stock price movement across central subsectors, including Packaged Food, Beverages, Household and Personal Care, and Tobacco. The analysts also opined that these trends reflect the significance of earnings strength when determining stock performance in volatile and uncertain economic conditions.
Yahoo! Finance further reported that the top-performing stocks in the consumer staples sector are likely to share three common traits. These include solid balance sheets with the potential to sustain share buybacks to boost EPS, profit flexibility to offset increasing costs and revenue pressure, and a strong manufacturing presence in the US to constrain tariff-related inflation.
With these trends in view, let’s look at the 10 best packaged food stocks to buy now.
A busy supermarket with shelves full of packaged foods.
Our Methodology
We sifted through stock screeners, financial media reports, and ETFs to compile a list of 30 packaged food stocks and chose the top 10 most popular among hedge funds as of Q4 2024. The list is ordered in ascending order of hedge fund sentiment. We sourced the hedge fund sentiment data from Insider Monkey’s database.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10 Best Packaged Food Stocks to Buy Now
10. The Hershey Company (NYSE:HSY)
Number of Hedge Fund Holders: 38
The Hershey Company (NYSE:HSY) manufactures and markets chocolate, sweets, mints, and confectionary items. It operates through the North America Confectionery, North America Salty Snacks, and International segments. Its brand portfolio includes Hershey’s, Reese’s, and Kisses.
While the cocoa shortage is affecting the company’s operations, its revenue for 2024 came up to $11.2 billion, a growth of less than 1% from year-ago levels. The fact that the company managed to grow its revenue amid the cocoa shortage reflects the power of its brand and the high demand for its chocolate. The Hershey Company (NYSE:HSY) has also grown its divided for 15 consecutive years, proving to be a reliable dividend stock. Its average yearly dividend growth over the past decade comes up to a notable 10%.
The company recently announced the strategic acquisition of LesserEvil, known for its better-for-you snacks. The acquisition aligns with The Hershey Company’s (NYSE:HSY) plans to diversify its snacking portfolio and expand its presence in the salty snacks market. The company ranks tenth on our list of the best packaged food stocks to buy now.
9. Freshpet, Inc. (NASDAQ:FRPT)
Number of Hedge Fund Holders: 40
Freshpet, Inc. (NASDAQ:FRPT) manufactures, markets, and distributes packaged food and treats for pets. Its products include a blend of vegetables, fresh meat, and fruits farmed locally. The company’s products include Deli Fresh Grain Free Chicken Recipe for Dogs, Ocean Whitefish Recipe for Cats, Joy Turkey and Apple Bites Treats, Nature’s Fresh Grain Free Chicken Recipe for Cats, and more.
The company’s fiscal Q4 2024 results showed the largest household penetration gains, adding around 2 million households. 800,000 of those were heavy and super heavy users. Freshpet, Inc. (NASDAQ:FRPT) also added new distribution with around 1,300 new stores and approximately 900 second and third fridges for a total of nearly 2,300 new fridges.
Analysts are bullish on the stock as it offers a modern take on healthy food items for animals and boasts a solid customer base, shedding positive light on its future. Its median price target of $82.88 implies an upside of 71.94% from current levels.
On April 8, Bank of America Securities analyst Bryan Spillane reiterated a Buy rating on Freshpet, Inc. (NASDAQ:FRPT) and set a price target of $87.00. Jefferies analyst Kaumil Gajrawala also reiterated a Buy rating on the company on April 7. Freshpet, Inc. (NASDAQ:FRPT) takes the ninth spot on our list of the top packaged food stocks to invest in.
8. McCormick & Company, Incorporated (NYSE:MKC)
Number of Hedge Fund Holders: 40
McCormick & Company, Incorporated (NYSE:MKC) manufactures, markets, and distributes packaged spices, seasonings, herbs, condiments, and flavors to the entire food and beverage industry, including food manufacturers, retailers, and food service businesses. Its operations are divided into the Consumer and Flavor Solutions segments. The Consumer segment sells its products to retail channels under various brands, including French’s, Frank’s RedHot, Lawry’s, Zatarain’s, Simply Asia, Thai Kitchen, and more. The Flavor Solutions segment offers a range of packaged products to food service customers and food manufacturers.
The company reported volume-driven performance in its fiscal Q1 2025 results, reflecting the success of its prioritized investments. It attained share gains in core categories across key markets, delivering volume growth in the Consumer and Flavor Solutions segments.
In a report released on April 9, Robert Dickerson from Jefferies reiterated a Buy rating on McCormick & Company, Incorporated (NYSE:MKC) and set a price target of $89.00. The company ranks eighth on our list of the best packaged food stocks to invest in now.
7. BellRing Brands, Inc. (NYSE:BRBR)
Number of Hedge Fund Holders: 42
BellRing Brands, Inc. (NYSE:BRBR) is a consumer product holding company that provides packaged powders, nutrition bars, ready-to-drink (RTD) protein shakes, and other RTD beverages. Its primary brands are Dymatize and Premier Protein. BellRing Brands, Inc. (NYSE:BRBR) operates through protein-based consumer goods.
The company reported strong fiscal Q1 2025 results, with net sales reaching $532.9 million, an increase of 23.8%, or $102.5 million, compared to the prior year. This growth was driven by a 20.8% growth in volume and a 3.0% increase in price/mix. BellRing Brands, Inc. (NYSE:BRBR) also reported a 26.3% net sales growth in Premier Protein, while net sales for Premier Protein RTD shake rose 25.3%. These trends reflect the company’s positive operations.
On April 7, Jefferies analyst Kaumil Gajrawala reiterated a Buy rating on BellRing Brands, Inc. (NYSE:BRBR). The company is the seventh best packaged food stock to buy according to hedge funds.
6. The Kraft Heinz Company (NASDAQ:KHC)
Number of Hedge Fund Holders: 43
The Kraft Heinz Company (NASDAQ:KHC) manufactures and distributes packaged food and beverages worldwide. Its offerings include cheese and dairy products, meals, tomato products, condiments, meats, sauces, refreshment beverages, and more. Its geographical segments of operation include North America and International Developed Markets.
The company is maintaining a strong financial position, as reflected in its fiscal 2024 earnings. It generated $3.2 billion in free cash flow, reflecting a 6% growth compared to 2023. Operating cash flow also grew 5.2% year-over-year to $4.2 billion.
The Kraft Heinz Company (NASDAQ:KHC) returned $2.7 billion to shareholders through dividends and share repurchases and currently pays a quarterly dividend of $0.40 per share. The company takes the sixth spot on our list of the best packaged food stocks to buy now. Mairs & Power Growth Fund stated the following regarding The Kraft Heinz Company (NASDAQ:KHC) in its Q3 2024 investor letter:
“We added The Kraft Heinz Company (NASDAQ:KHC) to the Fund in the quarter. Kraft Heinz is a leading global food company that possesses a portfolio of iconic brands, including its eponymous ketchup brand. The company has undergone an operational transformation focused on driving efficiency gains in supply chain, manufacturing and distribution. These efficiency gains have fueled increased investments in technology, automation, innovation and marketing, which should ultimately drive more consistent organic revenue growth and high single digit earnings per share growth. We expect above-average long-term returns, buoyed by consistent free cash flow generation, opportunistic share repurchases and an attractive 4-5% dividend yield. A modest current valuation affords an ample margin of safety.”
5. Tyson Foods, Inc. (NYSE:TSN)
Number of Hedge Fund Holders: 44
Tyson Foods, Inc. (NYSE:TSN) is a food company that processes prepared food and other related products. It operates in the Prepared Foods, Beef, Chicken, and Pork segments. Its portfolio of brands includes Tyson, Jimmy Dean, Ball Park, Hillshire Farm, State Fair, Aidells, and more.
The company’s fiscal Q1 2025 performance reflects another year of potentially positive growth. The quarter marked its third consecutive quarter of year-over-year increases across key metrics, including adjusted operating income, sales, and adjusted earnings per share. Overall, its fiscal Q1 2025 results showed the best quarterly performance in more than two years, lending a positive light to the company. Its adjusted operating income rose by $248 million in fiscal Q1 2025, reflecting a notable 60% growth.
In addition, the adjusted operating income margin expanded by 170 basis points compared to last year, and adjusted earnings per share rose by a significant 65%. Tyson Foods, Inc. (NYSE:TSN) ended the quarter with a net leverage ratio of 2.3 times, a notable improvement from 4.1 times at the end of 2023.
4. Lamb Weston Holdings, Inc. (NYSE:LW)
Number of Hedge Fund Holders: 47
Lamb Weston Holdings, Inc. (NYSE:LW) is a global distributor, producer, and marketer of packaged frozen potato products. It supplies frozen potatoes, sweet potatoes, vegetable products, and appetizers to retailers and restaurants worldwide. Its operations are divided into North America and International segments.
The company’s fiscal Q3 2025 earnings showed a 9% volume growth, while net sales rose 4%. Its adjusted EBITDA also grew by 6%. Lamb Weston Holdings, Inc. (NYSE:LW) is also focusing on its previously announced restructuring plan. It is on track to deliver at least $55 million in pretax savings in fiscal 2025 and $85 million in pretax savings in fiscal 2026.
On April 7, Barclays analyst Andrew Lazar maintained a Buy rating on Lamb Weston Holdings, Inc. (NYSE:LW) and set a price target of $69.00. The analyst told investors that while global markets plummeted due to a potentially imminent tariff war, Lamb Weston Holdings, Inc. (NYSE:LW) rose around 10% after its earnings beat for fiscal Q3 2025. The analyst also said that the company maintained its positive full-year outlook, supported by ongoing product innovation initiatives and significant cost-saving measures brought about by a restructuring plan. Its strategic initiatives and control over operational improvements rank it fourth on our list of the top packaged food stocks to invest in.
3. General Mills, Inc. (NYSE:GIS)
Number of Hedge Fund Holders: 49
General Mills, Inc. (NYSE:GIS) manufactures and markets branded consumer foods. It has more than 100 brands in around 100 countries across six continents. The company’s brand portfolio includes Annie’s, Betty Crocker, Cheerios, Wheaties, and more. Its operations are divided into the North America Retail, International, North America Pet, and North America Foodservice segments.
While the company’s organic net sales for fiscal Q3 2025 came below expectations due to retailer inventory headwinds and a slowing in snacking categories, General Mills, Inc. (NYSE:GIS) drove continued positive market share trends in a number of its categories. It is focusing on improving its sales growth in fiscal 2026 by boosting brand communication, increasing investments in innovation, and raising customer value. It expects to fund these initiatives through expected new cost-saving initiatives chalked out to enable growth and boost efficiency.
General Mills, Inc.’s (NYSE:GIS) long-standing record of deploying cash through capital investments, share repurchases, dividend growth, and M&A ranks it among the best packaged food stocks to buy now.
2. Mondelez International, Inc. (NASDAQ:MDLZ)
Number of Hedge Fund Holders: 55
Mondelez International, Inc. (NASDAQ:MDLZ) manufactures and markets packaged snack food and beverage products. Its offerings include chocolate, gum, beverages, candy, cheese, meals, and more. The company’s brand offerings include Oreo, Cadbury Dairy Milk, Ritz, LU, Milka, Toblerone chocolate, and others. Mondelez International, Inc. (NASDAQ:MDLZ) sells its products in more than 150 countries. Its segments include Latin America, AMEA, Europe, and North America.
2024 was a strong year for the company, with its top growing mid-single digit and balanced performance across emerging and developed markets. It continued its track record of strong free cash flow, generating $3.5 billion. The company also prioritized capital return by delivering $4.7 billion to shareholders through buybacks and dividends. In 2025, Mondelez International, Inc. (NASDAQ:MDLZ) is focused on its long-term growth strategy, and management is confident that the company’s chocolate playbook will allow it to successfully navigate the unprecedented cocoa cost inflation.
On April 9, Piper Sandler raised the firm’s price target on Mondelez International, Inc. (NASDAQ:MDLZ) to $64 from $59, keeping a Neutral rating on the shares. The company ranks second on our list of the top packaged food stocks to buy now.
1. PepsiCo, Inc. (NASDAQ:PEP)
Number of Hedge Fund Holders: 69
PepsiCo, Inc. (NASDAQ:PEP) manufactures, markets, distributes, and sells packaged food, snacks, and beverages. The company operates in the following segments: Frito-Lay North America (FLNA), Quaker Foods North America (QFNA), PepsiCo Beverages North America (PBNA), Latin America (LatAm), Europe, Africa, Middle East, and South Asia (AMESA), and Asia Pacific, Australia and New Zealand, and China Region (APAC).
PepsiCo, Inc. (NASDAQ:PEP) has a strong cash position and generated $12.5 billion in operating cash flow during fiscal year 2024. Operating profit rose from $11.9 billion in fiscal year 2023 to $12.8 billion, while net income improved by reaching $9.6 billion. The company also maintained steady revenue of $91.8 billion, a slight increase from last year. It plans to return approximately $7.6 billion to shareholders this fiscal year through dividend payments.
For 2025, PepsiCo, Inc. (NASDAQ:PEP) expects low-single-digit organic revenue growth and mid-single-digit growth in core constant currency earnings per share (EPS).
Overall, PEP ranks first among the 10 best packaged food stocks to buy now. While we acknowledge the potential of packaged food stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than PEP but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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