Real Cherries Beat Fake Ones
lauren@wowbestie
+2.6%
since Oct 3
The idea
I believe shoppers keep choosing real ingredients over lab-made substitutes, and dye regulations are forcing food companies to reformulate on a deadline whether their brand wins or loses. So the core holding is the suppliers who get paid for that swap, with smaller stakes in real-ingredient brands, real-food restaurants, and the fresh supply chain behind them. I keep 8% in cash to add on dips, avoid single-name concentration, and plan to hold for years unless the reformulation wave stalls or shoppers stop paying up for real ingredients.
What it owns
- These companies profit when food brands swap artificial flavors and dyes for natural alternatives, earning fees regardless of which brand wins shelf space. · Sensient TechnologiesIt makes natural colors from sources like beets and carrots, the exact ingredients food companies need as regulators phase out artificial dyes., International Flavors & FragrancesIt formulates natural flavors for major brands undergoing reformulation, earning fees on each swap from artificial to real-ingredient profiles., McCormick & CompanyIts flavor solutions business supplies natural flavors and colors to packaged food companies performing large-scale reformulation projects., IngredionIt makes clean-label starches and sweeteners that replace synthetic ingredients, enabling brands to shorten ingredient lists and meet consumer expectations., Archer-Daniels-MidlandIts nutrition segment sells natural flavors, colors, and plant ingredients into the reformulation wave that replaces synthetic additives., BalchemIt makes specialty ingredients that let brands clean labels without sacrificing shelf life or texture, serving the clean-label reformulation trend.38%
- Brands built on short, recognizable ingredient lists stand to gain market share as consumers increasingly choose products with fewer artificial additives. · Sprouts Farmers MarketIts store traffic and sales growth directly reflect whether shoppers are continuing to choose fresh-focused grocery over conventional options., Vital FarmsIts business proves consumers will pay premiums for pasture-raised eggs, demonstrating the willingness to trade up to real-ingredient products., FreshpetIt applies the real-ingredient trend to pet food, relying on refrigerated placement growth and adoption by owners choosing fresh over kibble., Simply Good FoodsIts snack brands compete on short, plain ingredient lists, winning shelf share only if consumers continue preferring simple labels over conventional options., Natural Grocers by Vitamin CottageIt stocks only products meeting strict ingredient standards, so its growth directly measures whether shoppers expand their choice of real over lab-made foods.24%
- Chains that cook from fresh ingredients and market that quality can command premium prices if diners continue trading up from cheaper processed alternatives. · Chipotle Mexican GrillIt built its model on in-restaurant cooking with real ingredients, capturing the premium price segment that values fresh over processed fast food., Cava GroupIt expands fresh Mediterranean bowls across new markets, succeeding only if diners keep choosing fresh-prepared meals over fried alternatives., SweetgreenIts menu is essentially produce-focused meals, requiring both sustained diner willingness to pay premium salad prices and a path to profitability., Texas RoadhouseIt cooks from scratch in every location at mainstream prices, drawing traffic from chains that reheat prepared foods.16%
- Growers and distributors of produce and fresh goods benefit as consumer demand shifts away from processed center-aisle products toward the produce section. · Mission ProduceIt moves avocados from farm to shelf globally, benefiting as consumer demand for fresh produce grows relative to processed foods., Dole plcIt supplies fruit and vegetables at global scale, gaining volume if shoppers shift purchases from processed center aisles to fresh produce., United Natural FoodsIt distributes natural and organic products to specialty grocers, depending on continued growth in natural food volumes through its network., LimoneiraIt grows citrus and sells oils to natural flavor houses, benefiting from both fresh fruit demand and the shift toward real-ingredient flavorings.14%
- Cash8%