Would you like to know more about high margin food products? If you are interested in the food industry, then you probably already know that some products are far more profitable than others. Whether high demand drives up prices, or a shortage in availability allows for higher margins on scarce items, some producers have seen profit rise incredibily due to market shifts. As Americans for example become more aware of health issues, more nutritious foods have become widely popular, thus allowing for greater returns on certain products.
You might have already seen our list of the 10 best fast food franchises to purchase and wondered whether a switch to the food industry might be the thing you were looking for. If this is the case, then you should definitely check out our list of ten high margin food products. Production of these items usually entail a low risk, while demand seems to be rather constant, if not growing, thus making them great investment opportunities. In addition, as we have already mentioned above, the US has seen a clear shift in consumer behavior, making healthy fare increasingly popular. Hence, it might not be the best time to wander into the fast food industry, when healthy profits can be made in other fields.
So how do high margin food products even come about? Well, apart from consumer habits, producers must take commodity prices into account. One or more of feed, corn, milk, and sugar, are usually necessary to produce other goods, meaning firms rely heavily on international market price fluctuations. The yearly fluctuations mean producers must constantly keep an eye on manufacturing costs, since they can harm their margins if they are unable to pass them on to consumers. Hence, in order to maintain high margins, food producers must anticipate global trends, as well as national consumer behavior. Those firms which have made their products more appealing to health-aware Americans, now benefit from higher revenue streams.
Before we take a closer look at our list of high margin food products, it should be noted that commodity prices are expected to remain rather stable over the next five years, thus reducing the risks involved in this industry. On the other hand, we can anticipate Americans to be ever more aware of the health risks involved with consuming certain foods, especially due to the emphasis made by the media and government alike. But for now, let’s simply point out the highest-margin food products and see how much profit they are actually making.
10. Cookies, Crackers, and Pasta
Posting an average profit of 9.4%, cookie, cracker, and pasta production remains a high margin food category. Total revenue for these food products was around $23.5 billion, with the industry posting an average risk of 4.74%.
The list of high margin food products continues on the next page with something we all love.