Since I’m severely lactose, I eat many plant-based foods and drink many plant-based beverages. The data suggests that many other Americans, whether because of lactose intolerance or for other reasons, eat plant-based foods and drink plant-based beverages. Indeed, “The (United States) plant-based food market surged from $3.9 billion in 2017 to $8.1 billion in 2023,” according to Good Food Institute. With so many interested customers, plant-based food stocks are a solid buy.
The institute pointed out that the growth was spurred “by products that appeal to mainstream consumers by mimicking the taste, texture, and functionality of conventional animal products.” Meanwhile, according to Statista, worldwide sales of plant-based meat alone are expected to surge from $10.15 billion in 2023 to $16.78 billion in 2028. For investors who want to profit from the latter trend, here are three growing plant-based food stocks to buy now.
Oatly (OTLY)
Oatly (NASDAQ: OTLY) specializes in making oat-based milk, although it has also branched out to desserts, yogurts, and whipped cream.
Last quarter, in a very encouraging development, the company reported its first-ever positive EBITDA, excluding certain items, in North America. Moreover, its overall revenue climbed 3.9%, excluding currency changes, versus the same period a year earlier. The latter increase was driven partly by a year-over-year surge of 9.6% in sales volumes, as measured in total liters. Furthermore, the firm expects its revenue growth to come in at 5% to 10% for the full year. Finally, Oatly’s gross margin jumped to 29% last quarter from 19.2% in Q2 of 2023.
Also positively, Oatly gave a major update on its Q2 earnings call last month. The company had received “positive test results with China’s largest coffee chain.” The statement, which likely refers to Luckin Coffee (OTC:LKNCY), suggests that Oatly may benefit over the longer term from being utilized by many of Luckin’s customers.
Since Luckin had 18,500 stores, such a development could very well be needle movers for Oatly and OTLY stock.
All of this positive news makes Oatly one of the best plant-based food stocks to buy now.
Ingredion (INGR)
Ingredion 9NYSE:INGR) provides “essential plant-based proteins, starches, texturizers, and other vital ingredients for vegan manufacturers,” The Food Institute explained. The company’s Ultra Performance line contains up to 60% plant protein. It also improves the taste and texture of many foods, including plant-based food and beverages, the company reported in 2022. It accomplishes the latter goal by “using pea protein without the raw plant flavor,” Ingredion explained.
Ingredion’s earnings per share, excluding certain items, surged 24% last quarter versus the same period a year earlier. Also positively, its sales volumes increased 5% year-over-year, excluding the impact of the divestment of its South Korean business. The firm raised its 2024 adjusted EPS guidance to $9.70- $10.20 from $9.20-$9.85 previously. The Texture and Healthful Solutions Unit includes dairy alternatives and products used to improve the texture of meat alternatives. Their volumes climbed an impressive 8% YOY.
The company has launched two plant-based products this year which I believe have a great deal of potential. First, its Clean Taste Solubility Solution is over 100 times more soluble than standard stevia. It also tastes better than “artificial sweeteners and other stevia ingredients” in consumer testing, according to the firm. The product also ” enables 100% sugar reduction, and is ideal for use in beverages, fruit preps, syrups, liquid concentrates, bars and sauces,” Ingredion stated.
Secondly, the firm unveiled a pea protein product that it says will better preserve protein bars than the plant proteins that are commonly used to preserve them.
Sweetgreen (SG)
Sweetgreen (NYSE:SG), a restaurant chain that specializes in serving salads, is not completely vegan. Unsurprisingly, it does enable vegans and vegetarians to order a wide array of completely plant-based dishes such as Shroomami.
Other offerings from the company include Guacamole Greens (without chicken) and Curry Cauliflower (without chicken). Given the huge number of vegetables and completely plant-based sauces and dressings that the firm offers, I think chances are high that many U.S. vegans and vegetarians eat there frequently.
In Q2, the company’s revenue jumped 21% versus the same period a year earlier to $184.6 million, while its same-store sales surged 9% year-over-year. Moreover, its EBITDA, excluding certain items, came in at $12.4 million, up from $3.3 in million in Q2 of 2023.
In light of Sweetgreen’s rapid growth and its high appeal to vegans and vegetarians, I view it as one of the best plant-based food stocks to buy now.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
On the date of publication, Larry Ramer’s wife held a long position in LKNCY. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.