"Eles fazem comida."
Yet, I think ‘prepare’ should be allowable in this case. My reasoning is as follows: ‘fazer’ and ‘preparar’ (and their English counterparts) mean pretty much the same thing here and are about as common, but in English ‘prepare’ is in this case more common and hence a more neutral translation.
But it's a judgement call that may be different in other cases, e.g. in cases of specific foods (a sandwich, macaroni, curry, breakfast, lunch, dinner) it seems ‘make’ is more common. I've seen ‘to prepare a sandwich’ but it really sounds weird to me.
And ‘to make a meal (out) of something’ is an idiom, which means something like ‘to perform a (usually common) task in such a roundabout / slow / complicated / inept / clumsy way that onlookers are overcome with an incredibly annoying urge to push the perpetrator aside and do it himself’.
While ‘do’ is sometimes used in the sense of preparing a specific foodstuff (as in ‘He does a mean chicken curry!’) this usage is rare and I'm afraid ‘They do food.’ just conjures up unfortunate imagery that isn't very family friendly in nature.
Also, when e.g. making an appointment ‘do’ is sometimes used as a substitute for ‘have’.
My advice is therefore not to use ‘do’ in relation to food until you're really sure you know what you're... doing.