We recently compiled a list of the 10 Best Organic Food and Farming Stocks To Invest In. In this article, we are going to take a look at where General Mills, Inc. (NYSE:GIS) stands against the other organic food and farming stocks.
The Rise of Organic Food and Farming
Organic farming practices focus on using natural methods to cultivate crops, avoiding synthetic fertilizers and pesticides. This approach not only enhances the quality of food but also contributes to preserving biodiversity and maintaining healthy ecosystems. The organic food and farming sector provides economic benefits as well, creating jobs and supporting rural communities.
The global organic food and farming industry has experienced significant growth in recent years, reflecting a shift in consumer preferences towards healthier and more sustainable food options. According to a report by The Business Research Company, the global organic food market was valued at $244.82 billion in 2023. The market is expected to grow at a compound annual growth rate (CAGR) of 15.1% during 2024-2028 to reach a value of $489.75 billion by the end of the forecast period. This growth is largely driven by increasing awareness of health benefits associated with organic products and a growing concern for environmental sustainability.
READ ALSO: 12 Best Land and Timber Stocks to Buy According to Analysts and 13 Best Farmland and Agriculture Stocks To Invest In According to Hedge Funds.
The 25th edition of the yearbook “The World of Organic Agriculture,” published by the Research Institute of Organic Agriculture (FiBL) and IFOAM – Organics International, highlights significant growth in the organic farming sector. Presented in February 2024 at the BIOFACH trade fair in Nuremberg, Germany, the report reveals that by the end of 2022, the area under organic management reached 96.4 million hectares. This marks an impressive increase of 26.6% or 20.3 million hectares compared to the previous year.
Australia continues to lead the world in organic farming area, boasting 53 million hectares, an increase of 17.3 million hectares. The report shows that organic farming area increased across all continents, reflecting a global trend towards more sustainable agricultural practices. In terms of producers, the number of organic farmers worldwide rose to 4.5 million in 2022, which is nearly a 26% increase from 2021.
Support for organic agriculture is gaining momentum globally, with many countries implementing action plans to promote organic farming practices. The number of fully implemented national regulations for organic agriculture rose to 75 in 2023, indicating a commitment to enhancing and regulating this sector.
According to the report, the global organic market reached nearly EUR 135 billion in 2022. The United States was the largest market, valued at approximately EUR 56.6 billion, followed by Germany at EUR 15.3 billion and China at EUR 12.4 billion. While some European countries saw a decline in organic sales, Canada and the US experienced growth in retail sales, with increases of 9.7% and 4.4%, respectively. These figures indicate that consumer interest in organic products is strong, particularly in North America, where health consciousness is driving demand.
Methodology
To compile our list of the 10 best organic food and farming stocks to invest in, we looked for the largest organic food and farming companies. We also reviewed our own rankings and consulted various online resources to compile a list of the best organic food and farming stocks. Next, we focused on the top 10 stocks most favored by institutional investors. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s Q3 2024 database of 900 elite hedge funds. The 10 best organic food and farming stocks to invest in are ranked in ascending order based on the number of hedge funds holding stakes in them as of Q3 2024.
Why do we care about what hedge funds do? 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A busy supermarket with shelves full of packaged foods.
General Mills, Inc. (NYSE:GIS)
Number of Hedge Fund Holders: 30
General Mills, Inc. (NYSE:GIS) is the leading provider of natural and organic packaged foods in the US. The company offers a variety of organic products through its Cascadian Farm and Muir Glen brands. These include frozen fruits and vegetables, ready-to-eat cereals, snack bars, and fruit spreads. This diverse portfolio caters to the growing consumer demand for healthy and organic options.
The company also partners with farmers to advance organic agriculture. In fiscal 2018, General Mills, Inc. (NYSE:GIS) partnered with Gunsmoke Farms LLC to convert 34,000 acres of conventional farmland into certified organic land by 2020. This initiative would help supply organic wheat for products like Annie’s pasta, showcasing the company’s dedication to sustainable sourcing.
Over the years, the company has introduced a variety of organic packaged foods. In October 2022, General Mills, Inc. (NYSE:GIS) launched new granola bars from Annie’s and Cascadian Farm made in a peanut-free facility. These bars are USDA-certified organic, appealing to health-conscious consumers looking for convenient snack options. With a strong portfolio of beloved brands and a clear strategy for growth in the organic sector, General Mills, Inc. (NYSE:GIS) ranks among the best organic food and farming stocks to invest in.
Overall, GIS ranks 4th on our list of the best organic food and farming stocks to invest in. While we acknowledge the potential of GIS as an investment, our conviction lies in the belief that some 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 GIS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock
Disclosure: None. This article is originally published at Insider Monkey.