Investing in the organic and natural food sector has become increasingly attractive as consumer preferences shift towards healthier and more sustainable options. This burgeoning market presents a variety of investment opportunities, ranging from companies specializing in healthy snacks and meal replacements to grocery chains focused on organic produce and established food giants expanding their organic offerings.
This guide provides an in-depth comparison of three key players in this sector: The Simply Good Foods Company (SMPL), Sprouts Farmers Market (SFM), and General Mills (GIS), offering investors valuable insights into their business models, financial performance, and future prospects.
What Are Organic Food Stocks?
The classic definition of organic food producers includes those who grow and produce food without using synthetic chemicals such as pesticides and artificial fertilisers.
From an investment perspective, the definition has been extended to include farmers and producers who also do not use genetically modified (GM) components or expose food to irradiation. Animal welfare, environmental sustainability, and other elements of ESG work practices are also important issues for organic farmers.
When considering whether a firm is an organic producer, or to what extent it adopts organic practices, there are some blurred lines. This can make it harder for investors to identify a firm that is a best fit for their core values.
Is it better to invest in a small firm that stringently adheres to organic principles but has a limited chance of making an impact? Or is it better to invest in a firm that takes a more pragmatic view, but has the potential to change the nature of the food market and is ultimately going to bring about more effective social change?
The Simply Good Foods Company (SMPL)
Headquartered in Denver, Colorado, and founded in 2017, The Simply Good Foods Company sells healthy snack and meal alternatives. Its stock is listed on the Nasdaq exchange under ticker SMPL, and it has generated positive returns for investors since it first listed.
The firm focuses on the snacks and meal replacement area of the market. There is significant potential for the firm to gain market share from incumbent firms that don’t have the ethical edge of Simply Good Foods.
The business operations of the firm have also been set up in an impressive way. As the firm states, its distribution of products is via “major retail channels, including grocery, club and mass merchandise, as well as through e-commerce and convenience”. This strong network allows the company to “introduce new products, expand distribution, and appeal to current and potential consumers”. (Sources: Simply Good Foods)
- Founded: 2017
- Focus: Nutritional foods and snacks under the Atkins and Quest brands.
- Business Model: Caters to health-conscious consumers seeking low-carb and high-protein options, available through major retailers, e-commerce, and convenience stores.
- Recent Developments: Launched the “Sweet on Protein” campaign (Oct 2024) for the Quest Bake Shop line; acquisition of OWYN contributes to projected sales growth.
- Financials: As of August 22, 2025, stock price at $29.37 (-24% YTD), market cap $2.95B, P/E 20.5, EPS $1.60, analyst target $38.10 (range $34–$43).
- Growth Outlook: Fiscal 2025 net sales growth guidance of 8.5–10.5%, adjusted EBITDA growth of 4–6%.
Sprouts Farmers Market (SFM)
Sprouts Farmers Market started trading in 1943 and is now one of the fastest-growing retailers in the US. The farm shop vibe continues to be part of the shopping experience – it’s just being made available to a wider market. It currently operates over 380 stores in 23 states, so there is plenty of room for growth in the domestic market even before international markets are considered.
Approximately 60% of Sprouts’ sales are organic, and the green credentials are backed up by its preference for stocking local products, its suppliers having to comply with a strict code of conduct and animal welfare standards that exceed industry best practice.
- Founded: 2002
- Focus: Natural and organic foods, with over 400 stores across 23 states.
- Business Model: Offers over 19,000 products, specializes in organic, paleo, keto, and plant-based items; emphasizes local sourcing.
- Recent Developments: Opened 33 new stores in 2024; plans for 35+ in 2025; $1B share repurchase program authorized (Aug 2025); new locations in Providence Village, TX and Carson City, NV (July 2025).
- Financials: Stock price $148.41 (+11.6% YTD), market cap $14.5, P/E 30, EPS $2.79, analyst target $183 (range $155–$209).
- Growth Outlook: Fiscal Q3 2024 net sales up 13.6% YoY; aggressive growth and expansion plans.
General Mills (GIS)
A potentially surprising inclusion in the sector, General Mills has been producing mass-market traditional foodstuffs since 1928, but is rapidly developing its organic food offering.
General Mills’ ability to squeeze higher growth out of its organic ranges suggests that the company is looking to expand that offering. At the same time, it has the critical mass that some smaller organic companies don’t, and investment in new markets requires the kind of resources that General Mills has spent years developing.
- Founded: 1866
- Focus: Diversified global food leader, with a growing organic/natural segment (e.g., Annie’s Homegrown).
- Business Model: Leverages scale, brand portfolio, and distribution to tap into health trends.
- Recent Developments: Expansion of organic/natural offerings; ongoing commitment to the segment.
- Financials: Stock price $49.81 (−21% YTD), market cap $26.6B, P/E 12.1, EPS $4.58, analyst target $54.80 (range $45–$63).
- Growth Outlook: Stable, mature business; defensive investment profile.
Comparative Analysis
Comparing these three companies reveals distinct investment profiles. SMPL is a growth-oriented company targeting the health-focused snack market, exhibiting moderate growth and a higher P/E ratio. SFM is a specialty grocer benefiting from health and wellness trends, demonstrating the best year-to-date performance and significant expansion plans. GIS, on the other hand, is a defensive, diversified food major, offering stability but experiencing a slight decline year-to-date. Its lower P/E ratio and higher EPS suggest a more mature and stable business model.
Conclusion
Organic stocks prove that investing in something that you believe in no longer involves sacrificing financial returns. Long-term buy-and-hold investors are ideally positioned to reap the rewards associated with such a long underlying trend playing out.
Whether you are fully on board with the push towards going organic, or more interested in making a profit, the above stocks appear capable of fulfilling both needs. If you’re new to investing, and your decision to buy organic stocks is your first foray into the stock markets, then following the step-by-step guide will help you get to grips with the mechanics of the process.
