Updated July 31, 2021
Plant-based eating is on the rise and it appears to be more of a long-term movement than just a fad! Gen Z and millennials are at the forefront of this trend. In Britain, for example, 44 percent of vegans are aged 15 to 34. While the vegan way of life may not be the norm just yet, it continues to gain worldwide popularity. Vegan foods have emerged as a rapidly developing global industry. For example, the global plant-based meat market was estimated to be valued at $4.3 billion in 2020 and is projected to double by 2025. Packaged Facts’ online consumer survey reported that 32% of Americans now identify as flexitarians, who aim to cut back on animal-based food products. Subsequently, the plant-based food market seems well-positioned to grow at a very healthy rate. But in terms of publicly traded companies, what are vegan stocks? What are cruelty-free stocks?
Cruelty-free stocks are publicly traded companies void of animal cruelty and can, but do not always (nor are required to) exclude animal-based products from their goods and services. Many of these companies are food manufacturers and suppliers that specialize in plant-based offerings and have experienced exponential growth due to the global rise of veganism. There is a distinction between cruelty-free and vegan; the former prohibiting the mistreatment and exploitation of animals, and the latter excluding any and all animal-derived products. The vegan diet excludes meat, dairy products, eggs, and all other ingredients originated from animals. Dietary staples for vegans include fruits, vegetables, legumes, and whole grains.
In addition to positive growth forecasts, cruelty-free stocks qualify as sustainable investments. Environmental, Social, and Governance (ESG) investments support companies that aim to have a positive cultural impact promoting social responsibility. ESG investing has gained recent popularity and gives investors the opportunity to have ownership in companies that align with their values. Cruelty-free stocks are one way to introduce these investments into your portfolio.
List of Vegan Stocks
Here are some of the well-known publicly traded companies benefitting from the global expansion of Veganism:
- Beyond Meat
- Hain Celestial
Beyond Meat: (BYND) Based in Los Angeles, Beyond Meat is among the top producers of plant-based meat substitutes and has achieved exponential growth since going public in 2019. A little know fact is that its products have been available at Whole Foods since 2013! The brand touts itself as the “future of protein,” with vegan alternatives that look and cook like the real thing.
Ingredion: (INGR) Does not directly make food products but is an international company that supplies certain ingredients to major food manufacturers. These include oils, sweeteners, starches, and grains. All Ingredion products are plant-based.
Tofutti: (TOFB) A New Jersey-based company that makes a range of soy-based, dairy-free foods for the vegan and vegetarian markets. Tofutti is most well-known for its vegan ice cream, but also has a larger dairy-free product line including Better Than Cream Cheese, Sour Supreme, and Ricotta Cheese
Hain Celestial: (HAIN) American-based food company that owns several natural and organic food divisions. You might recognize a few such as Celestial Seasonings & Teas, Health Valley, and Hain Pure Foods.
Challenges for Vegan Companies
The hurdles facing vegan stocks are similar to other rapidly developing and evolving industries: Uncertainty.
Regardless of its exponential growth, the vegan food space is still relatively small and has yet to prove long-term assurance. There is no guarantee that any young business will stand the test of time. Beyond Meat sells almost half of its products to the foodservice industry, primarily restaurants and universities. Several of its competitors are in similar positions. During the pandemic, restaurants simply didn’t have the usual number of patrons, even considering the trends toward pick-up and delivery options. With such a large portion of plant-based meat sales going to restaurants and schools, adaptation must come quickly and the ideal path is not clear. Just like most investments, where there is great potential, there is also an equal, if not greater amount of risk.
So, How Should I Invest Vegan?
To participate in the burgeoning and rapidly evolving vegan investing strategy, one should consider a broader and more diversified approach to alleviate some of the potential risks, rather than attempting to pick the few, unpredictable, winning stocks. At Demand Wealth, we have developed the Demand Cruelty Free portfolio for this very purpose. It contains cruelty-free screened and globally diversified companies that align with your values, risk profile, and financial needs. As one of our several vegan advisers says, “think of it as spreading your tofu around, instead of putting it all in one basket.”
This report is a publication of Demand Wealth. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author as of the date of publication and are subject to change.