The pandemic-driven surge in demand for ready to cook and easy-to-eat food has given a boost to the packaged food industry, making the space highly competitive. And we don’t think Farmmi (FAMI) looks fundamentally fit enough to survive the competition and attract investors. Conversely, we think it could be worth betting on Flowers Foods (NYSE:FLO), Sanderson (SAFM), and Herbalife Nutrition (NYSE:HLF), which are better positioned to capitalize on the industry tailwinds. So, let’s pore over these names.Advancements in food processing techniques, improvement in delivery services, remote lifestyles due to the pandemic, and a growing inclination by consumers toward ready-to-cook, easy-to-eat food are driving the growth of the packaged food industry. The global packaged food market is expected to reach $3.41 trillion by 2030, registering a 5.2% CAGR. The industry’s solid growth prospects have encouraged several new players to enter the market over the past year, making it highly competitive.
Although the agricultural e-commerce and technology enterprise Farmmi, Inc.’s (FAMI) revenues increased 31% year-over-year to $17.79 million in its last reported quarter, the stock has lost 74.1% in price over the past nine months and 70.7% over year-to-date. Furthermore, FAMI has been volatile over the past 90 days. Thus, we think FAMI may not be the right choice for cashing in on the industry tailwinds.
Instead, Flowers Foods, Inc. (FLO), Sanderson Farms , Inc. (NASDAQ:SAFM), and Herbalife Nutrition Ltd. (HLF), which have performed better than FAMI over the past months and possess strong fundamentals, could be ideal bets to capitalize on the industry’s solid growth prospects.