Plant-based eating is on the rise internationally and it appears to be far more prevalent than just a fad! Millennials and Gen Z’ers are at the forefront of this shift. 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 international popularity.
As a result, it has also become a worldwide industry developing at a rapid pace. For example, the global plant-based meat market was estimated at $12 billion in 2019 and is forecasted to more than triple during the next five years. The Plant Based Food Association reported that 29% 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.
Vegan stocks are publicly traded companies that are void of animal cruelty and exclude animal-based products from their offerings. 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. The vegan diet excludes meat, dairy products, eggs and all other ingredients derived from animals. Dietary staples include fruits, vegetables, legumes and whole grains
In addition to positive growth forecasts, vegan stocks qualify as socially responsible investments. Socially responsible investments support companies that aim to have a positive cultural and environmental impact. This type of investing has become more popular in recent years and gives investors the opportunity to have a stake in companies they truly believe in. Vegan stocks are one way to introduce those investments into your portfolio.
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) Doesn’t make food products directly, but is an international company that supplies certain ingredients to major food manufacturers. These include oils, sweeteners, starches and grains. Most importantly, all of their 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. They are best known for their namesake vegan ice cream, but also have a larger dairy-free product line including: Better Than Cream Cheese, Sour Supreme and Ricotta Cheese
Hain Celestial: (HAIN) An U.S. 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: Unpredictability.
While currently growing fast, this portion of the global food space is still relatively small and has yet to prove itself for the long haul. There is no guarantee that some of these relatively young businesses will stand the test of time, especially considering the unknown impact of the current pandemic on the way we dine.
For example, Beyond Meat sells almost half of its products to the food service industry, primarily restaurants and universities. Several of its competitors are in similar positions. During the pandemic, restaurants simply don’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 a commensurate amount of risk.
So, How Should I Invest?
To participate in the burgeoning and rapidly evolving Vegan investing space, one should consider a broader and more diversified approach to alleviate some of the potential risk, rather than simply trying to choose an individual stock or two. At Demand Wealth, we have developed the ‘Demand Vegan’ 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 staff members 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.