When investors think of organic food stocks, the first company to come to mind is often Whole Foods . And why not? The company that pioneered the organic grocery business still dominates it, with a valuation at one time over $20 billion.

However, while Whole Foods the company still has millions of admirers, the stock has been struggling, falling to a 52-week low in July,as comparable sales have slipped and the company's growth prospects dimmed. Mainstream grocers such as Wal-Mart and Target have crept in on the organic territory even as private companies such as Trader Joe's and other organic chains have expanded.

For investors looking to make a buck on the growing organic food space, there are better places to put your money. Increasing competition at the retail level has been tough on Whole Foods and other grocers, but it's been a boon for producers of organic foods. Let's take a look at few stocks that have been riding this wave and should continue to grow.

1. WhiteWave Foods WhiteWave Foods might not be a household name, but chances are you're familiar with many of its products, including Silk soy milk and Horizon Organic milk, both of which are top-selling brands nationwide.

Source: Company Website.

WhiteWave Foods began its history as a publicly traded company when Dean Foods announced that it would spin off its organic arm. Since the separation was completed in May 2013, WhiteWave shares have more than doubled to $36 while the stock of its former parent has slipped more than 20%, a reflection of the divergence in the traditional and alternative dairy segments. In its most recent quarter, organic net sales grew 11% while overall revenue jumped 36% thanks to its recent acquisition of organic-foods maker Earthbound Farm. That performance helped drive operating income up more than 50% to $66 million. And WhiteWave's aggressive expansion strategy didn't stop with its Earthbound Farm acquisition. Earlier in September, the company snatched up So Delicious Dairy Free, makers of vegan products such as coconut milk and frozen desserts, for $195 million in cash. That move will tack on another $115 million in annual revenue, or about 4% growth, off the bat, and is expected to boost the bottom line further as cost-saving synergies are implemented.

With its industry-leading distribution network, organic sales growth, and recent acquisitions, WhiteWave Foods is putting itself in position to be a dominant player in the growing organic market for the next generation. The stock isn't cheap, but the acquisitions will help boost bottom-line growth and its competitive advantage.

2. Boulder Brands The parent of butter-alternative Smart Balance has had its struggles this year. The stock is off 30% from its 52-week high, and operating income fell 20% in its most recent quarter despite 19% revenue growth. Taking the longer view, however, Boulder Brands still looks promising. The stock has more than doubled since 2012, and the recent downturn on the bottom line was due to higher input costs, specifically elevated egg-white prices. While Smart Balance sales have flattened, growth in its Natural segment, which includes the brands Udi's, Glutino, and EVOL, is soaring, up 35% in the most recent quarter. With its Udi's line, which saw sales jump 34% in the last quarter, Boulder is particularly strong in the growing gluten-free space; with some estimates indicating a target audience of as many as 44 million Americans for a gluten-free products, there should plenty of room for growth.

Management has promised a stronger second half of the year, and has locked in egg-white prices, which should help control costs. If the company can deliver on earnings expectations over the next two quarters, I'd expect the stock to regain its upward momentum as revenue growth is still strong.

Originally posted here:

The Best Stocks for Organic Food Lovers