Consumer demand has moved the industry from niche and specialty players such as Whole Foods Market Inc. (WFMI) and into mainstream grocery outlets across North America, including Wal-Mart Stores Inc.
Risks in the category are that supply could be outstripped by demand, adding to cost or margin pressure, as well as “headline” risk associated with the authenticity of organic goods, Mr. Kron said.
The analyst launched coverage on Hain Celestial Group Inc. (NASDAQ:HAIN) with a “neutral” rating and a 12-month price target of US$31. His top buy in the segment is Kellogg Co. (NYSE:K), with a price target of US$58, on the strength of cereal brands such as Kashi.
HAIN vs. K 1-yr chart: