We recently published a list of 7 Best Future Food Stocks to Buy According to Analysts. In this article, we are going to take a look at where Chipotle Mexican Grill, Inc. (NYSE:CMG) stands against other best future food stocks to buy according to analysts.
The food industry is a major contributor to the global economy, evolving over time to cater to dynamic consumer demands, technological advancements, and economic conditions. As per The Business Research Company, the global food and beverage sector in 2024 was valued at around $6.96 trillion, expected to reach $7.4 trillion by 2025. The expansion of the industry has been made possible due to increasing consumer spending, swift urbanization, and higher demand for convenient and healthy food options. On the other hand, companies face challenges in terms of inflationary pressures, supply chain constraints, and changing trade policies.
Today’s food industry is majorly influenced by the increasing demand for healthier and more sustainable food alternatives. The global healthy food market is expected to reach $897 billion by 2025 and grow at a CAGR of 9.7%, reaching $2.2 trillion by 2035, as per Future Market Insights. The shift in the food market is fueled by awareness around diet and its relation to chronic health conditions like obesity, diabetes, and heart disease. Consumers look for clean-label, minimally processed, and plant-based alternatives, which has driven the demand for organic, non-GMO, and fortified food.
Furthermore, the growth in the food-away-from-home (FAFH) sector is also unparalleled. According to the U.S. Department of Agriculture, spending at food service outlets breached pre-pandemic records in 2021 and hit the $2.6 trillion mark in 2023. To drive this growth, limited-service and full-service restaurants contributed around 69% of total FAFH expenditures. This growth emanates from the increasing demand for convenience-driven dining-out options and the growing market for digital ordering platforms. Considering the competition between limited-service and full-service restaurants, menus are evolving. This is made possible through quick-service restaurants adding more premium options and traditional restaurants focusing on convenience and delivery optimization.
However, inflation still remains a major concern for the industry. Grocery prices have risen 1.8%, year-on-year in December 2024, whereas costs for food-away-from-home increased by 3.6%. These surges were driven by increasing production costs and supply chain disruptions. Additionally, according to FAO, Food Price Index saw a monthly increase of 1.6% in February 2025, as food price inflation remains a major concern, driven mainly by increases in prices of sugar, dairy, and vegetable oil. To mitigate these concerns, companies are actively looking to adopt advanced supply chain technologies, price optimization strategies, and sustainability initiatives to control costs and protect margins.
Moreover, technological innovation is playing an important role in transforming the future of the food sector. Robotics and artificial intelligence (AI) are being used to increase production efficiency, optimize supply chains, and decrease food wastage.
Despite these concerns, the long-term prospects for the food industry remain strong. The sector continues to benefit from urbanization, increasing middle-class population, and changing consumer preferences. Accordingly, top food stocks provide an average annual return of 32.25%, posing them as an impressive option for investors. Companies that look to integrate innovation, move forward sustainably, and focus on health-conscious options, are positioned to grow in the future.
Methodology
To come up with our list of the 7 Best Future Food Stocks to Buy According to Analysts, we first spotted 22 food-related companies with a market capitalization of more than $5 billion. These were then narrowed down to stocks with significant average analyst share price upside and an average rating of Buy or better.
Additionally, we look at the number of hedge funds which have invested in these companies, using Insider Monkey’s Q4 2024 hedge funds database. The list was finalized by placing the stocks in ascending order based on analysts’ upside potential.
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).
A chef plating up a wide variety of dishes for a restaurant chain.
Chipotle Mexican Grill, Inc. (NYSE:CMG)
Potential Upside: 23.90%
Number of Hedge Funds Holders: 83
Chipotle Mexican Grill, Inc. (NYSE:CMG) is one of the top companies in the fast-casual dining industry. The company focuses on fresh ingredients, digital expansion, and operation efficiency.
Chipotle reported a 15% annual sales growth, hitting the $11.3 billion mark for the year ended December 31, 2024. The company also reported a 7.4% improvement in comparable sales and above 5% transaction growth. Accounting for 35% of total revenue, digital sales generated $3.9 billion, and restaurant-level margins increased to 26.7%.
On the other hand, for Q4, Chipotle Mexican Grill, Inc. (NYSE:CMG) saw an increase of 13% in sales, up to $2.8 billion, driven by a 5.4% increase in comparable sales. Although the company observed some turbulence around the holiday season, it sustained positive transaction growth through operational improvements as well as strong brand engagement. Furthermore, Chipotle maintained its aggressive expansion strategy and opened 304 new locations in 2024, including 257 Chipotlanes, elevating its drive-thru and digital ordering capabilities.
Furthermore, the company is hyper-focused on improved restaurant efficiency through improvement in throughput and deployment of new kitchen equipment, adding to enhanced service times and order accuracy. In line with this, the company is expecting to streamline food preparation while upholding quality through the introduction of produce slicers at all its locations. Moreover, Chipotle Mexican Grill, Inc. (NYSE:CMG) introduced a limited-time menu offering, Chipotle Honey Chicken, after successful market testing.
Although the company did face cost pressures due to labor inflation and ingredient pricing, Chipotle Mexican Grill, Inc.’s (NYSE:CMG) focus on operational excellence, digital growth, and expansion of its restaurants positions it for long-term growth, putting in a strong position among the Best Future Food Stocks to Buy.
Overall, CMG ranks 5th on our list of best future food stocks to buy according to analysts. While we acknowledge the potential of CMG, our conviction lies in the belief that certain 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 CMG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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