Food for thought

The investment community is encouraged by a steady increase in the consumption of organic and natural food products in the US and western Europe. Although they have to wait for a few years, the investors believe that they can profit from the growth opportunities in this sector.

Anne-Marc O'Connor, an analyst with NPI Global Care Investment Funds, a division of the London-based insurer NPI, says, "While the consumption of organic food has been rising, most of the food producers and retailers in this sector are still too small to seek a public listing."

O'Connor said that in Britain, Cranswick PLC and Treatt PLC have excellent investments and were an exception to this. Cranswick is a pork production business that emphasises the ethical treatment of its animals. Treatt PLC, a soft drinks and food flavouring business, uses natural ingredients in its products. "Few farms practise high welfare animal husbandry in Britain," said O'Connor, "So, Cranswick has filled an important niche in the market. The general public has also become more sensitive to animal welfare issues and the dangers inherent in high-intensity meat production." Matthew Harrogin, a spokesperson for Albert E Sharpe & Co -- a stock brokage in Bristol -- said he believed that it was only a matter of time before other natural and organic food companies sought a public listing. He said that British organic baby-food producers Hip Nutrition and Baby Organics were worth keeping an eye on.

However, there are more organic food companies listed in the US than anywhere else, but they may not all be suitable for private investors, feel market watchers. Some of the successful organic food retailers in the US are Whole Foods Market Inc and Vestry Natural Foods Inc.