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Investing in healthy and sustainable food

Summary:  Financially fit with your investments? Hans Oudshoorn gives two bite-sized ideas for diversified investing in sustainable and healthy food.

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During the holidays, the lifestyle of many people can become a little excessive, which is then converted into a New Year's resolution: to eat healthier. Alongside drinking less alcohol and exercising more, this action item is often high on the list. Apart from good intentions, healthy food generally deserves an important place in our lives. An additional advantage is that healthy food is often produced more sustainably, i.e. with a smaller CO2 footprint than peers that produce less healthy alternatives. In this article I consider the opportunities of this theme for you as an investor, under the motto 'financially fit with your investments'. 

A closer look at sustainable and healthy food

Research by Harvard TH Chan School of Public Health shows that healthy foods such as fresh fruits and vegetables, nuts, legumes, fish and vegetable oils (to prepare food) reduces the risk of cardiovascular disease and high blood pressure. Diseases such as cancer and diabetes are also less frequent in people who eat healthily, as is obesity.

Anyone who considers sustainability important can now find a growing range of food in the supermarket, whose production (and consumption) is done with respect for people, animals and the environment. The UN Food and Agricultural Organization calls these ‘sustainable food patterns' – defined as “food patterns with a low environmental impact, which contribute to food safety and health for current and future generations. Meeting the needs of the world's population means that there is sufficient, varied, healthy and safe food available and that it is fairly distributed'.

Robust growth of sustainable and healthy food market

Although the supply of sustainable and healthy food is growing steadily, there is still a lot to gain. Research and consultancy firm Research and Markets closely monitors the development of the market. In their Global Ethical Food Market Report 2021: COVID-19 Impact, Growth and Change to 2030 , they calculated that the sustainable (ethical) food market is expected to grow from US$542.84 billion in 2020 to US$574.42 billion in 2021 And the growth continues. In 2025, the market is estimated to be US$727.86 billion, as shown in the overview below. That equates to a growth rate of 6% per year.

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Global Ethical Market

 Expected growth of sustainable/ethical food market (Research & Markets, 2021)

With this growth outlook in mind, the theme 'sustainable and healthy food' offers opportunities for investors, which is why I looked for opportunities for those who would like to add a nuance in this area to their investment portfolio.

This following selection been made based largely on what investors are currently most active in with in the space and should not be seen as investment recommendations.

  1. Nestle 
  2. Unilever 
  3. Starbucks Corp 
  4. Ecolab INC 
  5. Danone 
  6. Koninklijke DSM
  7. Ahold Delhaize
  8. Intl Flavors & Fragrances
  9. Kerry Group PLC-A
  10. Symrise AG

In a nutshell, these stocks are of interest to long-term investors who can and want to bear equity risk and who want to add nuance to their portfolio with companies active in the food sector.

Please remember that investing involves risk, historical performance is not a guarantee of future of returns and your investments may lose value.

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Source: https://www.home.saxo/content/articles/equities/stunning-divergence-in-equities-is-a-short-term-opportunity-05012022

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