Plant-based stocks have seen somewhat of a decline in recent months, but the long-term outlook remains promising.

The concept of plant-based eating is no novelty and has been around for centuries. But in recent years, a greater focus on consuming healthier and more sustainable food has put plant-based companies in the spotlight. But while the macroeconomic trends point towards growth in the category, higher inflation and a cold front on financing have led to a recent decline in share prices.

However, the potential for growth in the sector remains strong, and under the right conditions, plant-based stocks can generate strong returns. The industry outlook supports this claim. Experts at Precedence Research predict the plant-based food market worth $46.7 billion in 2024 could grow to $96.6 billion by 2033. That reflects a compound annual growth rate of 8.4%.

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This growth will be bolstered by numerous underlying trends including demand for healthier food, an uptick in the number of vegans, technological advancements and sustainable farming practices.

On that note, investors can look to these plant-based stocks for long-term returns.

Oatly (OTLY)

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Oatly (NASDAQ:OTLY) was the new kid on the block when it first entered the U.S. market, but it soon found tremendous success. The company decided to capitalize on the third-wave coffee culture in the U.S. and distributed its products to artisanal coffee shops. Its name soon became synonymous with the cool aesthetic associated with cafe culture. Unsurprisingly, when it expanded its distribution to retail stores, sales soared.

While OTLY shares have fallen backward since its initial launch, recent signs point to revival. In its first-quarter earnings, the company posted narrower-than-expected losses, resulting in a 20% uptick in share prices. Revenue grew 1.8% to $199 million and gross profit grew to $54 million from $34 million in the prior year.

Looking at the broader picture, OTLY is certainly a turnaround story in progress. The company continues to battle a turbulent macroeconomic environment, specifically with rising food prices. Nonetheless, its underlying business remains strong. As the company lowers losses and weathers short-term headwinds, it will become competitive in the long haul. Until then, OTLY is an attractively priced plant-based stock suitable for patient investors.

SunOpta (STKL)

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Canada-based SunOpta (NASDAQ:STKL) is a plant-based food and beverage company that was founded “before sustainability was cool.” The company sells a wide range of non-GMO modified plant and fruit-based snacks and beverages. Its lineup also includes meat-based broths and bones. SunOpta’s milk and creamers have gained a loyal following, leading the company to ramp up oat milk production.