DEFINITION of 'Food Industry ETF'
An exchange-traded fund that invests in food and beverage companies, with the objective of matching the investment performance of an underlying index. While there are very few ETFs that invest only in this sector, food and beverage companies account for a significant proportion of the holdings of consumer staples ETFs, which far outnumber food ETFs.
BREAKING DOWN 'Food Industry ETF'
The sector encompasses companies that manufacture and distribute a wide range of food and beverages, from cereal and coffee to doughnuts and pizza, and also includes the giant U.S. fast-food chains that have a global presence.
As a consumer staple, the food and beverage sector is relatively immune to economic cycles. A food and beverage ETF would typically include companies with some of the best-known consumer brands.