It's time to be bullish on everything 'Food'.
From the farm to your plate, lies a vast array of investment opportunities. Food and food-related companies (to include those that support the food development process) may not be the 'sexy' investment, and won't land a high return overnight. However, it is the one sector that is consistently in demand, and thus, steady in its performance.
Before some cry 'Foul', let me expand. Agricultural is an area that has gone up and down pretty violently over the past year or so, because it tails into the dollar. Because most of these agricultural commodities are dollar-based, with the dollar increasing, a lot of these commodities will decrease and vice versa.
Investors have seen a lot of different swings in the commodity area. However, if one looks at the demographics, one can see a lot of these developing nations are moving up the 'food chain', where people that used to eat rice now want to eat chicken and meat. When you move up the food chain in that manner, it takes a lot more grain to supplement and to grow a chicken or a head of cattle than it would if you were to just eat the grain itself.
What is more, those in more established markets are preferring different kinds of food - hence the 'organic' craze. If investors have not gotten into the 'organic food' market yet, they need to PDQ.
In just the past year, organic food makers such as Annie's Inc (NYSE:BNNY) have taken the market by storm. It's initial public offering that resulted in an 89% jump of its share price by the day's end is a good example. The company sold 5 million shares at $19/sh, raising $95 million of additional capital. By the time the closing bell rang, the company's market capitalization reflected an enterprise worth a fancy $598 million.
Highly correlated to the trending organic food industry, Annie's was founded in 1989 with the original goal of providing "healthy and delicious" macaroni and cheese. Grown from their own success, the company now provides a wide range of food products that are derived from using natural and organic ingredients.
Whole Foods Market (WFM) is another player. Though not directly an organic food producer, the company specializes in the retail selling of organic and natural foods. With its stores branded as a health-oriented shopping experience, the branch locations offer a wide variety of organic products. Whole Foods seems to be focused more on getting out in front of competition when it comes to being linked with healthy eating. It recently entered into partnership with U-Be-Livin-Smart (UBLS), a new innovative provider of healthy, affordable nutrient-dense food products. Recently, the company announced the launch of its "Karma"ffin product line in the U.S. market. The healthy muffin is the company's first nutrient-dense patent pending product and is now available on Whole Foods' shelves.
In the retail food segment, investors have been keeping a close eye on growing The Original Soupman (SOUP) company. This stock is sold over the counter, but with its trend, it is believed to have incredible growth potential. Soupman has a market cap of about 17.3M, and just this week the stock is up 11.36%. Soupman is riding the wave a of its current rating as Zagat's #1 'best-tasting soup in the world'.
In addition to opening franchised restaurants, Soupman's new shelf-stable carton soups are now being sold in the main soup aisle of supermarkets across the country alongside big name brands like Campbell's and Progresso. With brand growth entering into over 3,000 supermarket chains across the United States, the company leverages strategic partnerships for growth.
Recently, Soupman has announced a deal with Robert Azinian and CCA Foods, Inc., to lead the expansion of its Al's Famous New York Delicatessen & Restaurant model in Casinos throughout the US and Canada. The next two locations are opening in the Mohegan Resorts Casino in Atlantic City and the Mohegan Sun at Pocono Downs in PA in 2013.
These companies' success appears to be leveraged by the growing health consciousness around the country along with the growing aversion to processed foods. Despite the evolving popularity of organic products for consumers, the organic foods industry has traditionally had a very slim amount of public companies in which one could invest.
Public opinion is also swayed by advertising. In the companies mentioned above, Soupman seems to be in a commanding lead. The company seems to identify and utilize the power media in brand growth. Not only has it drawn in some heavy-hitters for advertising such as Seinfeld's Jason Alexander and NBA pro Shaquille O'Neal, but he has also joined forces with those who can make the Soup Man even bigger.
Food is looking good. Investors need to exert some due diligence into companies such as these that are leveraging consumer trends with strategic implementation of their products and services.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.