Nearly everyone has seen an advertisement for some sort of “superfood” that promises numerous health benefits packed into a single fruit or vegetable. Besides these claims, superfoods can make an attractive addition to an investment portfolio seeking diversified returns.
Tree Nuts
Tree nuts, including almonds, walnuts, and hazelnuts, are full of plant-based protein and are the focus ingredient to a diverse range of products. Although nut trees take some time to mature, the returns from these crops can be steady and out-sized. Hazelnut prices have strengthened the past several years, and have a forecasted compound annual growth rate of over 10% for the period 2020-2025.
Elderberry
Elderberry has become a household staple for immune support, because it is rich in antioxidants while containing anti-inflammatory and anti-viral properties. The elderberry market has grown 110% year over year since 2017 and is poised to increase by another $149.45 million during 2020-2024, according to a 2020 Research and Markets study. Most of the elderberry products on the U.S. market today use low quality, dried, imported elderberries mixed with water rather than domestically-grown berries containing fresh pressed juice. There is significant room to expand domestic elderberry production to meet growing appetite for this superfood.
Graphic from Harvest Farmacy.
Naturally-Raised Livestock
Sold under various marketing terms, such as free-range, antibiotic free, and grass-fed, consumers can’t get enough of poultry, beef, and sheep products raised in natural settings. Organic dairy animals must be pasture-grazed throughout the grazing season, and any supplemental feed (grain) they are fed must be raised organically. Grass-finished beef also takes longer to raise than grain-finished, increasing its cost. In any event, consumers are willing to pay more for the extra costs involved in raising animals in what they see is a more humane and healthier fashion than conventionally raised meat.
Locally-Grown Produce
Locally-grown produce continues to drive investment demand in vertical farms around the U.S. Consumers crave food that is produced with less environmental impacts and that is actually more nutritious due to its freshness and shorter delivery time from farm to table. Additionally, supply chain disruptions during the COVID-19 pandemic have revealed fragility of food systems and add urgency to distributing food production around the country. The vertical farming market is projected to grow at an annual rate of over 20% through 2025, reaching USD $7.3 billion.
Non-GMO
Non-GMO crops are a controversial topic in the food and agriculture space, with conflicting opinions on their safety and health benefits. Cultivation of GMO food crops can require synthetic fertilizers, pesticides, and herbicides, leading many consumers to search for non-genetically modified alternatives. What isn’t up for debate is the higher profits that these crops can garner from consumers. Non-GMO foods are forecasted to grow at a compounded annual rate of 14% through 2025.
Graphic from Technavio.
Investing in agriculture is generally a long-term endeavor, but knowing which crops benefit from market momentum can help investors achieve out-sized returns. A mixed portfolio containing reliable commodity crops and more trendy specialty crops is a solid bet for any investor interested in diversifying their holdings with agriculture.