Sprouts Farmers Chases Growth in Booming Health & Wellness Market

Sprouts Farmers Market, Inc. SFM is making significant inroads to capture a larger share of the burgeoning health and wellness market, a segment estimated to be $290 billion within the $1.6 trillion spent on food at home. The company's core purpose, "We help People Live and Eat Better," directly aligns with the preferences of its target customers who crave health and wellness. 

Sprouts Farmers attracts these consumers through a differentiated assortment, with more than 70% of products sold being attribute-driven, including organic, gluten-free and non-GMO options. The company’s curated assortment, including its fast-growing Sprouts Brand, resonates with shoppers prioritizing nutrition and clean ingredients.

Innovation is central to Sprouts Farmers' approach, with more than 7,100 new items introduced in 2024, showcasing products like protein coffee and collagen, which directly cater to health-conscious needs. Meanwhile, the retailer enhances its in-store experience with a focus on fresh produce and knowledgeable staff ready to assist customers in achieving their health goals. 

Sprouts Farmers views the growing target customer segment as a huge opportunity to increase its share of wallet. SFM aims to deepen customer engagement through initiatives like its new loyalty program, which will personalize the shopping experience for its health-focused clientele. This focused strategy and commitment to health enthusiasts suggest significant room to run within the expanding health and wellness market.

UNFI and BYND’s Wellness Strategy Echoes SFM’s Success

United Natural Foods, Inc. UNFI stands as a prominent player in the natural food sector, serving as one of the largest distributors of organic and natural products in North America. Through its extensive network, United Natural supplies a vast array of products, including fresh produce, pantry staples, dairy alternatives and plant-based foods. With its diverse portfolio, United Natural caters to both retail giants and independent natural food stores, meeting the growing demand for cleaner, healthier eating options.

Beyond Meat, Inc. BYND is capitalizing on the health and wellness trend by offering plant-based protein options that appeal to consumers focused on healthier lifestyles and sustainability. Beyond Meat’s products cater to the growing preference for clean-label, meat-free alternatives. Beyond Meat is steadily broadening its presence across retail and foodservice channels, aiming to capture greater demand from shoppers who prioritize wellness, environmental impact and innovative food solutions.

SFM’s Price Performance, Valuation and Estimates

Sprouts Farmers stock has been a standout performer, with shares rallying 29.5% year to date, outpacing the industry’s growth of 18%. 
 

From a valuation standpoint, SFM's forward 12-month price-to-sales ratio stands at 1.74, higher than the industry’s ratio of 0.26. SFM carries a Value Score of C.
 

The Zacks Consensus Estimate for Sprouts Farmers’ current financial-year sales and earnings per share implies year-over-year growth of 13.6% and 35.5%, respectively. 
 

Sprouts Farmers Market currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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