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Rising food prices are bad news for households, eating into their budgets at a time when wage growth is minimal. 

So last week’s news that inflation, spurred on by higher fuel and food prices, is at its highest since June 2014 will be greeted with dismay.

It is now 1.8 per cent and, if experts are to be believed, poised to break through the Bank of England’s two per cent target.

Food for thought: Henry Boucher has bought into Delfi, which provides low-price bars of chocolate

One consumer whose interest in food goes beyond cost and the pleasure it brings to the palate is Henry Boucher. 

For 14 years he has viewed the worldwide growth in food demand from an investment standpoint.

Since early 2008, he has put this knowledge to good use by running a fund targeting firms in the food and agricultural sectors. 

More than ever, he believes the investment theme is powerful, here to stay and will reap rich rewards for investors.

Changing tastes: Boucher says opportunities in the food sector abound

He says: ‘When I started looking at food as an investment opportunity in the early 2000s, we had butter mountains and wine lakes. These have melted away or dried up. Today, we have a growing world population with an inexorable demand for food.

‘In the 18th Century, economist Thomas Malthus predicted that famine would ultimately result from a fixed land mass and a rising population. But food technology has blown that theory out of the water. It means we can eat strawberries all year round.’

Boucher says opportunities are abound. They result from changing diets in emerging economies as people earn more and move off a subsistence diet. 

This enables companies to come in and meet demand for new tastes, such as processed food. Or they come from changing eating habits in the developed world, for example people eating less red meat and more fish. 

The 42 companies he holds in the Sarasin Food & Agriculture Opportunities Fund reflect these trends. 

For example, the fund’s biggest holding is Marine Harvest, a Norwegian firm that leads the world in salmon farming.

Boucher says salmon prices will continue to rise given the imbalance between growing demand and a cap on supply because the fish can be farmed only in certain parts of the world, such as the Norwegian fjords and Scottish lochs.

Another key holding is Treasury Wine Estates, an Australian producer that owns familiar brands such as Blossom Hill, Wolf Blass and Penfolds. 

‘I visited a Treasury vineyard this time last year,’ says Boucher.

‘What impressed me was its relentless use of technology to produce better wine at an attractive price, while earning a healthy margin.’

Chocolate is also an investment theme. The fund holds Delfi, a chocolate maker providing low-price bars in emerging economies such as Indonesia, where the demand is borderline rampant. 

Swiss chocolate supplier Barry Callebaut is a top-ten holding.

Boucher has a team of 12 analysts scouring the world for suitable investments. 

Though he says he does not spend time ‘knitting his own sandals’, environmental issues are always at the back of his mind. ‘We won’t invest in companies that are involved in the wild catch of fish,’ he says.

Sarasin Food & Agriculture is the only fund of its type to have outperformed the FTSE All-Share Index over the past five years. 

Based in the shadow of London’s St Paul’s Cathedral, Sarasin manages £14 billion of assets. It is renowned for its thematic global investment approach, as well as running several funds-of-funds.

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