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10 Cheap Food Stocks to Buy

Fatima Farooq
9 min read

In This Article:

In this article, we will be taking a look at 10 cheap food stocks to buy. To skip our detailed analysis of the food sector and to see more of these stocks, you can go directly to see the 5 Cheap Food Stocks to Buy.

The food and beverage industry is one that has long been considered an industry that can weather the worst storms. Even in times of recession, the industry perseveres, considering the fact that no matter how bad things get, consumers will always be looking to buy food. This steady demand has resulted in the food and beverage industry today being one of the largest industries in the world. In one of our previous articles, we mentioned that this industry was worth $2.3 trillion in 2021 and was expected to grow at a compound annual growth rate of 10.6% to reach a valuation of $5.1 trillion by 2029. According to a report by the Business Research Company published in January, the industry had grown to be worth $6.7 trillion in 2022 and $7.2 trillion by the start of 2023. This exceptional and consistent growth of the industry is had been aided by a range of factors, one of which is the increase in food prices.

Russo-Ukrainian Conflict and its Impact on the Food Industry

With the outbreak of the Russo-Ukrainian conflict, many industries were hit, resulting in product scarcity across many sectors and consequent price rises with supply being unable to meet demand. The same trend was observed in the food and beverage industry, where a huge increase in food prices was observed through 2022 and even heading into 2023. Russia and Ukraine are two of the world's largest exporters of wheat and other crops. According to a CNN article published in January, the start of the war drove the Food Price Index developed by the Food and Agriculture Organization of the United Nations to its highest annual level on records going back as far as 2005. The Index rose by over 14% in 2022 compared to 2021.

With the entry of these two countries into a second year of war, vulnerable countries are continuing to face heightened food insecurity as prices remain high even after dropping in March. According to the Food and Agriculture Organization of the United Nations, since March 2022, there have been 11 consistent price declines every month till March 23 when it comes to the food industry. As of this March, these price declines have brought food prices down 19% from their peak in March 2022.

A Positive Outlook Heading into 2023

Despite such price fluctuations and uncertainty in the market, food stocks such as Archer Daniels Midland Company (NYSE:ADM), Tyson Foods, Inc. (NYSE:TSN), and The Kraft Heinz Company (NASDAQ:KHC) have continued to retain their popularity in 2023. Companies operating in this industry also seem to have a positive outlook heading into 2023, according to a survey conducted by Marcum Accountants & Advisors in 2022. The survey showed that 71% of the respondents, who were executives at food manufacturers, restaurants, distributors, retailers, and agriculture producers, reported revenue growth for their businesses between 2021 and 2022. An additional 69% of the respondents projected revenues rising over the next 12 months, while 64% of respondents had a positive outlook for the industry over the next year.

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