In this piece, we will take a look at the thirteen most profitable food stocks. For more food companies, head on over to 5 Most Profitable Food Stocks.
The food industry is one of the most crucial sectors in the world, and one that is also often thought of as a harbor against recession. The reasoning for this argues that during an economic downturn, while consumers will reduce their luxury spending, and put off buying an iPhone for example, they still have to buy food. Additionally, the food industry is also one of the largest in the world since it does not have to worry about creating demand and instead has to think of innovative ways to manage demand and out compete rivals in business processes such as logistics and supply chain management.
Taking a look at the monetary estimates of the industry, a research report from Fortune Business Insights spells out the sheer scale of the sector. Zoning in on the food processing market, it points out that the sector was worth a whopping $2.3 trillion in 2021, and adds that it will grow at a compounded annual growth rate (CAGR) of 10.6% to be worth an estimated $5.1 trillion by 2029.
The sector’s strength is evidenced by this CAGR, as trillion dollar industries generally do not have growth rates that end up exceeding 5%. The research firm outlines that the market growth will be supported by several trends, such as the growth in vegetarian diets, the surge in migration to cities, an increase in online ordering, and higher disposable incomes to spend on dining out.
Today, we will take a look at some of the most profitable food companies in the world, and some of them are PepsiCo, Inc. (NASDAQ:PEP), The Coca-Cola Company (NYSE:KO), and Nestlé S.A. (OTCMKTS:NSRGY).
Our Methodology
In order to pick out the top players in terms of profitability in the food industry, we started by picking out the top fifty companies in the world in terms of market capitalization. Then, their net income for the past twelve months was sifted out, following which the top 13 companies were selected and included in this piece.
Most Profitable Food Stocks
13. The Hershey Company (NYSE:HSY)
Trailing Twelve Month Net Income: $1.64 billion
Number of Hedge Fund Holders in Q4 2022: 37
The Hershey Company (NYSE:HSY) is one of the more well known American food companies that is famous primarily for its chocolates. The firm also sells baking ingredients, toppings, and other food products. It is based in, you guessed it, Hershey, Pennsylvania.
The Hershey Company (NYSE:HSY) is currently taking an aggressive approach to share buybacks, as it bought back one million shares for $240 million from the Hershey Trust Company in February 2023. 37 of the 943 hedge fund portfolios studied by Insider Monkey during last year’s December quarter had held a stake in the firm.
Out of these, Jim Simons’ Renaissance Technologies has the largest stake in The Hershey Company (NYSE:HSY) as it owns 2.6 million shares that are worth $617 million.
The Hershey Company (NYSE:HSY) joins The Coca-Cola Company (NYSE:KO), PepsiCo, Inc. (NASDAQ:PEP), and Nestlé S.A. (OTCMKTS:NSRGY) in our list of the world’s most profitable food companies.
12. The Kraft Heinz Company (NASDAQ:KHC)
Trailing Twelve Month Net Income: $2.4 billion
Number of Hedge Fund Holders in Q4 2022: 39
The Kraft Heinz Company (NASDAQ:KHC) is an American firm that is one of the oldest of its kind since it was set up in 1864 – right as the civil war was ending. The firm is headquartered in Pittsburgh, Pennsylvania, and it makes and sells a wide variety of food products such as condiments, meats, beverages, groceries, seasoning, and more.
The Kraft Heinz Company (NASDAQ:KHC) is currently seeing some love from Wall Street, as big ticket firms such as Mizuho, Piper Sandler, Morgan Stanley, and Deutsche Bank have increased the firm’s share price target. Morgan Stanley, for instance, believes that the firm has stable fundamentals to weather macroeconomic headwinds. The bank raised The Kraft Heinz Company (NASDAQ:KHC)’s share price target to $43 from $38 in December 2022.
Insider Monkey took a look at 943 hedge fund holdings for last year’s fourth quarter and found out that 39 had bought The Kraft Heinz Company (NASDAQ:KHC)’s shares.
The Kraft Heinz Company (NASDAQ:KHC)’s largest investor is none other than the Oracle of Omaha Warren Buffett and his holding company Berkshire Hathaway which owns 325 million shares that are worth $13.2 billion.
11. Wilmar International Limited (SGX:F34.SI)
Trailing Twelve Month Net Income: $2.40 billion
Number of Hedge Fund Holders in Q4 2022: N/A
Wilmar International Limited (SGX:F34.SI) is a Singaporean food products company. The firm has operations all over the world including Europe, China, Asia, Africa, and India. It makes and sells products such as edible food oil, rice, dairy products, sugar, and noodles.
Wilmar International Limited (SGX:F34.SI) had a bumper 2022, as not only did the firm’s revenue grow by 12% during the period to stand at a massive $73 billion, but at the same time its profits also grew by a more impressive 27% to come in at $2.4 billion.
10. Tyson Foods, Inc. (NYSE:TSN)
Trailing Twelve Month Net Income: $2.43 billion
Number of Hedge Fund Holders in Q4 2022: 31
Tyson Foods, Inc. (NYSE:TSN) is the world’s second largest meat processing company, after the Brazilian giant JBS. The firm processes cattle and pigs into beef and pork, and it also sells chicken meat. It has a wide variety of products in its portfolio, such as burger patties, sausages, and steaks.
Tyson Foods, Inc. (NYSE:TSN) faced a setback in February 2023 when the U.S. Supreme Court rejected its arguments to let federal judges oversee claims of deaths at its plants during the coronavirus pandemic. Lower courts have allowed the firm’s employees to sue it in state courts, and Tyson Foods, Inc. (NYSE:TSN) believes that the cases are Federal since the Trump Administration ordered food plants to stay open early in the pandemic.
As of Q4 2022, 31 of the 920 hedge funds part of Insider Monkey’s study had held a stake in the firm. Out of these, Cliff Asness’ AQR Capital Management is Tyson Foods, Inc. (NYSE:TSN)’s largest investor with a $243 million stake that comes via 3.9 million shares.
9. Mondelez International, Inc. (NASDAQ:MDLZ)
Trailing Twelve Month Net Income: $2.7 billion
Number of Hedge Fund Holders in Q4 2022:46
Mondelez International, Inc. (NASDAQ:MDLZ) is a snack maker that sells products such as cookies, snack bars, gums, chocolates, and candies. Alongside these, it also has cheese, groceries, and powdered beverages in its portfolio. The firm is based in Chicago, Illinois.
Mondelez International, Inc. (NASDAQ:MDLZ) is aggressively targeting the Chinese market, as the firm’s Suzhou plant announced in February 2023 that it is now the world’s first food plant to use advanced technologies such as machine learning and the internet of things (IoT). By the end of last year’s fourth quarter, 46 of the 943 hedge funds part of Insider Monkey’s research had invested in the firm.
Mondelez International, Inc. (NASDAQ:MDLZ)’s largest shareholder in our database is Noam Gottesman’s GLG Partners which owns 3.4 million shares that are worth $231 million.
8. General Mills, Inc. (NYSE:GIS)
Trailing Twelve Month Net Income: $2.9 billion
Number of Hedge Fund Holders in Q4 2022: 40
General Mills, Inc. (NYSE:GIS) is a packaged foods company that sells meals, frozen desserts, frozen pizza, soup, snacks, and other food products. It is headquartered in Minneapolis, Minnesota.
General Mills, Inc. (NYSE:GIS)’s chief executive officer had some good news for investors in February 2023 as he stated in a conference that the firm has not seen any consumer pushback on price increases and so it expects to bring in more revenue this year. Insider Monkey took a look at 943 hedge fund shareholdings during 2022’s December quarter to find out that 40 had invested in the firm.
General Mills, Inc. (NYSE:GIS)’s largest hedge fund investor in our database is Jim Simons’ Renaissance Technologies which owns three million shares that are worth $254 million.
7. JBS S.A. (OTCMKTS:JBSAY)
Trailing Twelve Month Net Income: $3.8 billion (1BRL = 0.19USD)
Number of Hedge Fund Holders in Q4 2022: N/A
JBS S.A. (OTCMKTS:JBSAY) is the largest meat company in the world. The firm has dozens of brands in its portfolio, and it processes and sells chicken, beef, mutton, pork, and other meats as well as selling their by products. It is headquartered in Sao Paulo, Brazil.
A food sanitation company for JBS S.A. (OTCMKTS:JBSAY)’s plants in the U.S. was fined by the Department of Labor in February 2023 for employing more than a hundred children in 13 different plants. The agency is bringing forward $1.5 million in civil penalties.
6. Archer-Daniels-Midland Company (NYSE:ADM)
Trailing Twelve Month Net Income: $3.8 billion
Number of Hedge Fund Holders in Q4 2022: 40
Archer-Daniels-Midland Company (NYSE:ADM) is a farm product company headquartered in Chicago, Illinois. The firm sells wheat, corn, oats, barley, milo, and other products all over the world.
Archer-Daniels-Midland Company (NYSE:ADM) is currently facing the heat from labor unions, as workers in the firm’s Decatur plant went on strike in February 2023, stating that the firm is negotiating with them in bad faith. By the end of Q4 2022, 40 of the 920 hedge funds polled by Insider Monkey had invested in the firm.
Archer-Daniels-Midland Company (NYSE:ADM)’s largest investor is Tom Gayner’s Markel Gayner Asset Management which owns 1.4 million shares that are worth $135 million.
PepsiCo, Inc. (NASDAQ:PEP), Archer-Daniels-Midland Company (NYSE:ADM), The Coca-Cola Company (NYSE:KO), and Nestlé S.A. (OTCMKTS:NSRGY) are some of the most profitable food companies in the world.
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Disclosure: None. 13 Most Profitable Food Stocks is originally published on Insider Monkey.
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