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Benefit From the Growth of Organic Foods With This Stock

July 24, 2014 | About:
rsconsultant

rsconsultant

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United Natural Foods (UNFI) has been conveying great results on the again of strong interest for its characteristic, natural and specialty foods as well as non-food products in the United States and Canada. Year-to-date, shares have picked up more or less 27% and more upside could be in store later on.

Natural fortune

As individuals get to be more wellbeing conscious, sales of regular and natural food and personal forethought products are grabbing. This is the reason why the likes of Whole Foods Market and Hain Celestial have done exceptionally well as of late.

The worldwide natural food market is slated to develop at an estimated CAGR of 12.9% to $105 billion in 2015. The North American market is estimated to develop at a CAGR of 12% from 2010 to 2015 . The worldwide interest for natural personal forethought products in 2012 was $7.6 billion and this is required to arrive at $13.2 billion by 2018, developing at a CAGR of 9.6% from 2012 to 2018 .

Also, the three companies discussed here have also done well despite frail consumer spending and inconsistent consumer trust. The fundamental reason behind this is that these companies pander to the more well-to-do section of the society, which isn't influenced much by the extreme and indeterminate financial conditions that have won post the recession.

Robust performance

United Natural Foods witnessed a revenue bounce of 22.2% year over year to $1.64 billion in the final quarter. This development was principally determined by strong request in the regular and natural food segment furthermore an extra week in the quarter. The organization reported earnings of $0.65 per share .

Going ahead, its prospects look great because of the open door in the natural food and non food market. Administration is also optimistic about the industry's prospects and expects the regular natural market to twofold by 2020. The organization is positioned to addition more market share by supplying items to supermarkets and free sellers.

These two are after diverse strategies

Hain Celestial has been in an aggressive acquisition mode as it looks to develop at a fast pace in the natural & common food market.

Through its acquisition of Premier Foods last year, Hain immediately positioned itself in the top 40 food and refreshment suppliers in the UK. In December last year, it had procured the Blueprint Juice brand, which is sold at various national, characteristic and gourmet retailers. In May this year, it purchased Ella's Kitchen Group, a producer of natural child food with 80 products offered in the United Kingdom, the United States, and Scandinavia.

Sales of natural food in the United States increased from pretty nearly $1 billion in 1990 to $11 billion in 2004 and $27 billion in 2012 . This pattern is required to proceed at a nice pace going ahead as said prior and Hain is positioning itself to catch a huge share of the market through acquisitions.

Then, Whole Foods Market is attempting to shed its picture of serving the rich. It has advertised plans for a 18,000 square feet store in Englewood, one of Chicago's most impoverished neighborhoods. In the event that its ease stores figure out how to do well, one can hope to see numerous other under-served communities in the rest of the nation get Whole Foods stores. It at present has 351 stores spread all through the United States, Canada, and the U.k.

Whole Foods is also wanting to take its store include to 1,000 the U.s, which would associate with three times of its present store presence. Thus, it is not surprising that analysts estimate Whole Foods' earnings to develop at a CAGR of 19% through the following five years, while the generally industry's earnings are required to develop at 15% over the same timeline.

Conclusion

There is substantial open door in the natural food market and these three companies have done truly well so far to underwrite. Going ahead, their distinctive strategies should help them establish their position further and convey considerably more noteworthy returns to shareholders.


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