Plant-based food has been gaining popularity over the past few years in the United States, as consumers are becoming more health-conscious and opting for healthier diets to boost immunity and mitigate chances of certain ailments. Notably, the COVID-19 pandemic only accelerated that shift to plant-based alternatives as consumers realized the importance of eating and staying healthy, especially in a scenario where most people had to stay and work from home.
Reflective of this trend, the United States saw retail sales of plant-based food continuing its double-digit rise in 2020. Per a report by the Plant Based Foods Association and the Good Food Institute, retail sales of plant-based foods in the United States rose 27% in 2020, allowing the plant-based market value to reach $7 billion.
Interestingly, the growth of the plant-based food market outpaced the overall retail food market in 2020, with the report stating that the plant-based food market grew almost twice as fast. The total U.S. retail food market managed to grow 15% in 2020, as COVID-19 restrictions were put in place, leading to shuttering of restaurants and consumers’ stockpiling of food. Moreover, the report also stated that 57% of households purchased plant-based food in 2020, compared to 53% in 2019, further highlighting this rising awareness.
Meanwhile, research has also shown how beneficial a plant-based diet can turn out to be. Markedly, a 2019 report by the Journal of the American Heart Association highlighted the importance of plant-based diets in staving off certain bodily diseases, reflective of why people are choosing this alternative over a usual diet. The report stated that plant-based diets are associated with a “lower risk of incident cardiovascular disease, cardiovascular disease mortality, and all???cause mortality” in the general U.S. adult population.
Notably, this shift is likely to grow in the near future as staying fit remains a priority for an increasing number of Americans. In fact, a report by Research and Markets estimated that the U.S. plant-based food market is set to witness a CAGR of 9.69% from 2021 to 2027, as quoted in a Business Wire article.
4 Stocks to Keep a Close Eye On
The U.S. plant-based food market seems poised to witness growth going forward, as consumers are becoming increasingly aware of the benefits of eating healthy and are trying to boost their immunity to stave off diseases and maintain a healthy lifestyle. This makes it a good time to look at names that can benefit from this potential upswing in demand for plant-based food. Notably, we have selected four such stocks that carry a Zacks Rank #2 (Buy) or 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Ingredion Incorporated INGR, together with its subsidiaries, produces and sells starches and sweeteners, and offers a portfolio of plant-based proteins and texture solutions. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings increased 3.6% over the past 60 days. The company’s expected earnings growth rate for the current year is 6.6%.
Archer-Daniels-Midland Company ADM offers an extensive range of plant-based protein ingredients. The company currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings increased 5.7% over the past 90 days. The company’s expected earnings growth rate for the current year is 7.8%.
Tyson Foods, Inc. TSN provides plant-based and blended food products under the “Raised & Rooted” brand, offering products like plant-based nuggets. The company currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings increased 2.8% over the past 60 days. The company’s expected earnings growth rate for next year is 6.7%.
Conagra Brands, Inc. CAG, together with its subsidiaries, operates as a consumer-packaged goods food company. Last year, the company launched its plant-based meat alternative soups under the “Gardein” brand. The company currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings increased 3.2% over the past 90 days. The company’s expected earnings growth rate for the current year is 14%.
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