With the Australian population on the rise there are a growing number of mouths that need feeding.
I think this is great news for many of Australia's leading food companies which could be set to enjoy steady organic growth for years to come.
Three top food shares that I think are worth a closer look are as follows:
Domino's Pizza Enterprises Ltd (ASX: DMP)
Thanks to the planned expansion of its store network at home and in Europe, Domino's aims to more than double its store footprint over the next seven years. As well as this, the company plans to leverage technology and efficiencies to improve its margins meaningfully. I believe the combination of this expansion and its wider margins, together with its long history of same store sales growth, should result in above-average earnings growth over the long-term. While its shares are arguably about fair value now for its current growth profile after an impressive run, I think patient investors could do well from a long-term investment.
Freedom Foods Group Ltd (ASX: FNP)
One key trend in the food industry at the moment is healthy eating. I believe this is more than a fad and expect more and more consumers to watch what they eat in the future in order to live healthier lives. If this proves to be the case then Freedom Foods is positioned perfectly to profit through its wide range of healthy food products. In addition to this, demand for the company's UHT products has been growing exceptionally well and recent capacity additions make it the largest producer of branded and private label UHT milk in Australia. Its shares are a little on the expensive side, though, so investors may want to consider waiting for a pullback.
Rural Funds Group (ASX: RFF)
Although this real estate investment trust doesn't produce food like the others, it collects rent on 38 properties across six different agricultural sectors including poultry, cattle, and grape production. I believe this puts it in a good position to benefit from the growing demand for Australian food produce. And with the average tenancy not due to expire for 12.5 years and rental indexation built into its rental contracts, I believe it has great visibility into its long-term earnings and distributions. Another bonus is that Rural Funds' shares currently offer a trailing yield of 4.9%.