We recently published a list of 10 Best Food Stocks to Buy According to Billionaires. In this article, we are going to take a look at where The Hershey Company (NYSE:HSY) stands against other best food stocks to buy according to billionaires.
A significant contributor to the global economy, the food business has changed over time to meet shifting consumer needs, technological breakthroughs, and market conditions. The worldwide food and beverage industry was estimated to be worth $6.96 trillion in 2024 and is projected to grow to $7.4 trillion by 2025, according to The Business Research Company. Rapid urbanization, rising consumer spending, and a greater need for quick and healthful food options have all contributed to the industry’s growth. On the other side, businesses must contend with shifting trade regulations, supply chain limitations, and inflationary pressures.
Transformative Trends Shaping the Future of the Food Industry
The growing desire for more sustainable and healthful food options has a significant impact on the food sector today. According to Future Market Insights, the global market for healthy foods is anticipated to reach $897 billion by 2025 and expand at a compound annual growth rate (CAGR) of 9.7% to reach $2.2 trillion by 2035. Awareness of diet and its connection to long-term health issues, including obesity, diabetes, and heart disease, is driving change in the food market. Organic, non-GMO, and fortified food is in high demand as consumers seek clean-label, minimally processed, and plant-based substitutes.
Additionally, the food-away-from-home (FAFH) industry is expanding at an unprecedented rate. Spending at food service establishments broke pre-pandemic records in 2021 and reached $2.6 trillion in 2023, according to the U.S. Department of Agriculture. Full-service and limited-service eateries accounted for about 69% of all FAFH spending to fuel this expansion. The burgeoning market for digital ordering platforms and the rising demand for convenient dining-out options are the main drivers of this expansion. Menus are changing as a result of rivalry between full-service and limited-service eateries. This is made possible by traditional restaurants emphasizing convenience and delivery optimization, while quick-service restaurants are expanding their premium menus.
For the industry, inflation is still a big worry, though. In December 2024, grocery prices jumped 1.8% year over year, while the cost of eating out rose 3.6%. Supply chain interruptions and rising manufacturing costs were the main causes of these spikes. Furthermore, the Food Price Index increased by 1.6% month over month in February 2025, according to the FAO, as food price inflation continues to be a serious concern, mostly due to rising costs for sugar, dairy, and vegetable oil. Businesses are aggressively seeking to implement pricing optimization techniques, sustainability programs, and cutting-edge supply chain technologies to allay these worries and preserve profits.
Furthermore, technological innovation is significantly changing the food industry’s future. Artificial intelligence (AI) and robotics are being utilized to improve supply chains, boost industrial efficiency, and reduce food waste.
The food industry’s long-term prospects are still bright despite these worries. Urbanization, the growth of the middle class, and shifting customer preferences all continue to help the industry. As a result, top food stocks provide investors with an amazing opportunity and an average yearly return of 32.25%. Businesses that prioritize health-conscious options, integrate innovation, and advance sustainably will be well-positioned for future growth.
Our Methodology
For this article, we selected stocks from the First Trust Nasdaq Food & Beverage ETF and the Invesco Dynamic Food & Beverage ETF. These ETFs provided exposure to U.S. companies comprising the food and beverage sector. We then shortlisted these stocks based on the highest number of billionaire holdings tracked by the Insider Monkey Q4 2024 database. In cases where multiple stocks had the same number of billionaire holdings, we used the dollar value of these holdings as a tiebreaker. Finally, the stocks were ranked in ascending order.
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 The Hershey Company (HSY) the Best Food Stock to Buy According to Billionaires?
A close-up of hands deftly moulding a bar of chocolate.
Dollar Value of Billionaire Holdings: $170,952,138
The Hershey Company (NYSE:HSY) is a leading American manufacturer known for its iconic chocolate and confectionery brands like Hershey’s, Reese’s, Kit Kat, and Kisses. It also offers non-chocolate snacks such as popcorn, pretzels, and protein bars.
The Hershey Company (NYSE:HSY) has been the subject of a lot of discussions lately, particularly due to the pressure on its stock price. However, the company’s strong pricing power, high operational margins, careful capital allocation, and dominant U.S. market share continue to give it a competitive edge, as seen by its return on invested capital. As one of the best food stocks, the company’s diversification plan, which includes its foray into the market for salty snacks, has further strengthened its position. Furthermore, Michele Buck’s leadership of the company’s succession planning ensures that the company’s culture will continue after her eventual retirement.
The Hershey Company (NYSE:HSY)’s consolidated net sales increased 8.7% year over year to $2,887.5 million in the fourth quarter of 2024. The 9.0% rise in organic, constant currency net sales was primarily driven by the expected inventory declines within North America Salty Snacks connected to the Q4 2023 ERP rollout, favorable net price realization of around 3 points, two additional shipping days, and inventory timing benefits.
Overall, HSY ranks 9th on our list of best food stocks to buy according to billionaires. While we acknowledge the potential of food companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than HSY but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
