We recently published a list of 7 Best Future Food Stocks to Buy According to Analysts. In this article, we are going to take a look at where Darling Ingredients Inc. (NYSE:DAR) stands against other best future food stocks to buy according to analysts.
The food industry is a major contributor to the global economy, evolving over time to cater to dynamic consumer demands, technological advancements, and economic conditions. As per The Business Research Company, the global food and beverage sector in 2024 was valued at around $6.96 trillion, expected to reach $7.4 trillion by 2025. The expansion of the industry has been made possible due to increasing consumer spending, swift urbanization, and higher demand for convenient and healthy food options. On the other hand, companies face challenges in terms of inflationary pressures, supply chain constraints, and changing trade policies.
Today’s food industry is majorly influenced by the increasing demand for healthier and more sustainable food alternatives. The global healthy food market is expected to reach $897 billion by 2025 and grow at a CAGR of 9.7%, reaching $2.2 trillion by 2035, as per Future Market Insights. The shift in the food market is fueled by awareness around diet and its relation to chronic health conditions like obesity, diabetes, and heart disease. Consumers look for clean-label, minimally processed, and plant-based alternatives, which has driven the demand for organic, non-GMO, and fortified food.
Furthermore, the growth in the food-away-from-home (FAFH) sector is also unparalleled. According to the U.S. Department of Agriculture, spending at food service outlets breached pre-pandemic records in 2021 and hit the $2.6 trillion mark in 2023. To drive this growth, limited-service and full-service restaurants contributed around 69% of total FAFH expenditures. This growth emanates from the increasing demand for convenience-driven dining-out options and the growing market for digital ordering platforms. Considering the competition between limited-service and full-service restaurants, menus are evolving. This is made possible through quick-service restaurants adding more premium options and traditional restaurants focusing on convenience and delivery optimization.
However, inflation still remains a major concern for the industry. Grocery prices have risen 1.8%, year-on-year in December 2024, whereas costs for food-away-from-home increased by 3.6%. These surges were driven by increasing production costs and supply chain disruptions. Additionally, according to FAO, Food Price Index saw a monthly increase of 1.6% in February 2025, as food price inflation remains a major concern, driven mainly by increases in prices of sugar, dairy, and vegetable oil. To mitigate these concerns, companies are actively looking to adopt advanced supply chain technologies, price optimization strategies, and sustainability initiatives to control costs and protect margins.
Moreover, technological innovation is playing an important role in transforming the future of the food sector. Robotics and artificial intelligence (AI) are being used to increase production efficiency, optimize supply chains, and decrease food wastage.
Despite these concerns, the long-term prospects for the food industry remain strong. The sector continues to benefit from urbanization, increasing middle-class population, and changing consumer preferences. Accordingly, top food stocks provide an average annual return of 32.25%, posing them as an impressive option for investors. Companies that look to integrate innovation, move forward sustainably, and focus on health-conscious options, are positioned to grow in the future.
Methodology
To come up with our list of the 7 Best Future Food Stocks to Buy According to Analysts, we first spotted 22 food-related companies with a market capitalization of more than $5 billion. These were then narrowed down to stocks with significant average analyst share price upside and an average rating of Buy or better.
Additionally, we look at the number of hedge funds which have invested in these companies, using Insider Monkey’s Q4 2024 hedge funds database. The list was finalized by placing the stocks in ascending order based on analysts’ upside potential.
Why are we interested in the stocks that hedge funds pile into? 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Is Darling Ingredients Inc. (DAR) the Best Future Food Stock to Buy According to Analysts?
A selection of pet food ingredients being prepared in a kitchen for quality and safety testing.
Darling Ingredients Inc. (NYSE:DAR) is a global company operating in the bio-nutrient solutions and the renewable energy sector. Its operations span across three segments: Feed Ingredients, Food Ingredients, and Fuel Ingredients.
The company reported net sales of $1.4 billion for Q4 ended December 28, 2024, while net income surged to $101.9 million, or $0.63 per diluted share, up from $84.5 million in the previous year. However, operating income declined, down to $122.4 million, mainly due to decreased fat prices. The net sales for the full year were $5.7 billion, while net income stood at $278.9 million. Accordingly, Darling Ingredients Inc. (NYSE:DAR) was able to repay a debt of $353 million to increase its financial stability.
Moreover, the Diamond Green Diesel joint venture’s strong performance was one of the main takeaways for 2024, generating $179.8 million in cash dividends for Darling Ingredients for the year. The company also successfully launched the world’s largest sustainable aviation fuel unit, enhancing its position in the renewable energy sector. Furthermore, Darling Ingredients Inc. (NYSE:DAR) has identified opportunities from the 45Z clean fuel production tax credit, which is expected to provide stability for the monetization of renewable fuel incentives.
Darling Ingredients Inc. (NYSE:DAR) was also able to improve margins across its business segments, with its feed ingredients segments’ gross margin increasing from 21.5% in Q3 to 22.6% in Q4. This improvement was made possible due to stabilized rendering volumes and enhanced waste fat recovery. On the other hand, the food ingredients segment also saw betterment in terms of gross margins, which rose from 23.9% to 25.7%. This was supplemented by higher sales and increasing demand for collagen-based products such as Nextiva.
Looking ahead, Darling Ingredients Inc. (NYSE:DAR) partnered with GreenGasUSA to launch its first project into running for renewable natural gas at its Dublin, GA, facility. This initiative looks to convert biogas from wastewater streams into pipeline-quality RNG, resulting in a reduction in emissions while introducing an additional income stream. Thus, the company is committed to expanding similar projects to reinforce its purpose of sustainable growth, making it to our list of the Best Future Food Stocks to Buy.
Overall, DAR ranks 1st on our list of best future food stocks to buy according to analysts. While we acknowledge the potential of DAR, our conviction lies in the belief that certain 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 DAR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
