Chipotle and Whole Foods: Does Healthy Food Equal Healthy Stocks?
Consumers are increasingly demanding healthier, more natural, and organic foods. These demands are changing the restaurant and the food industry, as companies are working to develop and meet the new demand. Chipotle Mexican Grill (NYSE:CMG) and Whole Foods Market (NYSE:WFM) are two companies that focused on the changing eating habits of today’s and tomorrow’s consumers, and have experienced tremendous growth by catering to the natural and organic-minded clientele, while fast food giants using giant agribusiness processors for its food products, like McDonald’s (NYSE:MCD), are fighting to stay relevant.
Chipotle and Whole Foods Forcing Others to Offer Healthier Products
Since companies like Chipotle and Whole Foods have given the public the ability to buy healthier products, some of the biggest food companies have been forced to change the way they produce food. Today General Mills’ entire line of cereals are made with whole grains, Kraft is removing artificial preservatives from its most popular individually wrapped cheese slices, and Subway felt the pressure and removed a dangerous chemical, azodicarbonamide, from its “freshly baked” bread. McDonald’s even developed the McWraps in the belief that it was going to lose 22 percent of its 18-34 year old customers to what’s perceived as the healthier option — Subway.
As new companies enter the healthy foods arena, the older more established companies will feel the competition, as was seen with Whole Foods in its last quarter. However, I still see both Whole Food and Chipotle as two of the best investments in their sector.
Chipotle Continues to Grow By Giving the Masses Healthy and Tasty Food
Chipotle is an excellent example of a company that has found great success in taking its commitment to serving good quality healthier food seriously, and it has resonated with the customer of today as Chipotle continues to see record sales. While the giants of the fast food industry have continued to use hormone-injected meats, GMO wheat, corn and soy, and an overabundance of fat and salt in their foods, Chipotle is trying a different approach: “Food with Integrity.”
When possible, Chipotle uses ingredients that are fresh, that are sustainably grown and Responsibly Raised with respect for the animals, the land, and the farmers who produce the food. Unlike most fast food chains, which keep quiet about the meats they use, Chipotle wants the customers to know its cattle are growth hormone-free, and the pigs and chicken are fed an all vegetarian diet and are also free of antibiotics, though the company has admitted that finding antibiotic-free chickens can be a difficult task. Late last year, the company announced its plans to operate GMO-free by the end of 2014.