10 High Margin Food Products to Build a Business Around

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%.
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The list of high margin food products continues on the next page with something we all love.

9. Snacks

Snack food production is a $31.4 billion industry, which despite the decline in demand, saw profits average 12.2% last year. Could these high margin food products see revenue drop in coming years due to health concerns?
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8. Meat, Beef, and Poultry Processing

Due to the adverse health effects of their products, this industry is surely quite nervous about the changes in consumer behavior over the past years. Average profits are still high at 12.6%, yet the $221.8 billion industry could face troublesome times in the near future.
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7. Seasoning, Sauces, and Condiments

Despite being a rather small market compared to others on this list, margins are quite high. Average profits are at around 13% for these essential products, which are a must for any preparation.
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6. Cereal

Cereal producers have put a lot of emphasis on the nutritive content of their goods recently, and margins have remained very large. Average profit for this $11.7 billion industry is at 13.3%, with risk at a mere 5%.
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5. Chocolate

Not to be confused with candy, this product is derived from one of the most expensive ingredients in the world: cocoa. Average profit for chocolate production was 16.4% for the $15.7 billion industry which is bound to live through anything.
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4. Candy

Although expected to take a huge toll from negative advertisement, candy remains a high margin food product. Posting an average profit of 17.2%, it was in fact one of the most profitable in the industry.
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3. Sugar Processing

Catering to many other food productions, the sugar processing industry is not only highly profitable at 18.5%, but also entails a very low risk of just 4.4%. However, as demand for candy drops, and cereal contains increasingly less sugar, this industry could see a strong downturn in profits.
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2. Ice Cream

Due to the low price of its ingredients compared to its selling price, the ice cream industry was able to post average profits of 23% last year. This $8.7 billion industry is surely one to watch, as there is still plenty of room for newcomers.
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1. Chicken and Turkey Meat

With average profits exceeding 23%, chicken and turkey meat have the highest margins of all food products. In addition, the $29.2 billion industry is bound to grow, as consumers increasingly try to stay away from red meat due to the health risks involved.
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