Consumer preferences are shifting toward more healthful foods, as key age demographics and the rising U.S. Hispanic population choose fresher ingredients and healthier products in the food-at-home vertical, says Scott A. Mushkin, Managing Director and a Senior Research Analyst at Jefferies & Company, Inc.
“The Hispanic population tends to index higher on fresh,” Mushkin said. “Baby Boomers are retiring, so health and staying healthier is even more important to that demographic, and the Millennials are forming households, a very important time in people’s lives where they are making decisions.”
Mushkin names Whole Foods Market (WFM) as a top pick in the healthy eating category. He says the growth trajectory at WFM is strong and the company could see its comps go into the low-double digits. On top of that, the management team is focused on improving return on invested capital.
“The thing that you have going for you with Whole Foods is the cyclical nature of the food-at-home business, in particular. The secular trends we discussed, Millennials, Baby Boomers, in particular the better-for-you trend, are blowing very hard at Whole Foods right now and the whole organic industry,” Mushkin said.
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