Investing In Plant-Based Meat: Are You Missing Out?

The market for plant-based meats has multiplied in a few short years. Plant-based meats are everywhere now, from McDonald’s to the grocery store.

Vegetarian and vegan lifestyles aren’t anything new, but market experts say what’s changed is more widespread acceptance of plant-based food. Unlike earlier interest in veganism, which centered around animal rights, today’s flexitarians are focusing on health and environmental impact.

Market watchers say this doesn’t look like a fad. Rather it’s a trend that’s just beginning.

“I think we have a perfect storm. More and more, it was not only about saving animals, but also about living a healthier life. It’s about sustainable living and making a smaller footprint to the environment,” says Roger Lienhard, chief executive and founder of Blue Horizon, an investment firm that focuses on sustainable food and agriculture. “We have a movement with the younger generation taking responsibility for the future.” 

How much is the plant-based meat industry worth?

The plant-based meat market is still in its infancy but growing fast. Barclays estimates the market, currently less than $14 billion, could grow to $140 billion over the next decade, grabbing about 10 percent of the $1.4 trillion global meat industry. A report by Blue Horizon and Boston Consulting forecasts that alternative proteins could take over 11 percent to 22 percent of the protein market in 2035.

The market has come a long way in a short amount of time, not only because of more widespread interest in plant-based foods, but also improved technology. Ten years ago, there was no mistaking a veggie burger for a hamburger. Now, with Impossible or Beyond, the taste and texture of plant-based meat are a lot more like its animal counterpart. That’s something that appeals to a much wider audience of flexitarians who are keen on a plant-based diet but also enjoy meat. And as plant-based meat technology continues to evolve with chicken and seafood alternatives, the interest—and demand—continues to grow.

Another factor driving the growth of plant-based meat is its relative affordability and mass appeal. Barclays estimates that the growth of plant-based meat could overshadow that of electric cars. Even though electric cars are gaining more widespread acceptance, plant-based meat has a far lower price point.

Is vegan meat cheaper than animal meat?

Plant-based meat products are more expensive than animal meat right now, but market watchers say prices will come down as consumption increases. Blue Horizon estimates that the cost, taste, and texture of plant-based meats will reach parity with meat sometime around 2023.

And though the price may be higher, it’s not so high that it puts off interested consumers.

“What ‘big meat’ doesn’t understand is that most people are okay with paying a few more bucks for their package of sausages” if it means less environmental impact, says Thomas George, president of Grizzle, an investment research company that focuses on millennials.  

What plant-based companies can I invest in?

For now, most plant-based meat companies are relatively small and not publicly traded. There’s Beyond Meat, which started in 2009 and launched its IPO in early May 2019. Then there’s Impossible, which is preparing for an IPO sometime this year or early next. In dairy alternatives, there’s Oatly, which made its Nasdaq debut this past May.

Other players in this market include traditional meat producers such as Tyson or Rugenwalder Muhle in Germany. Tyson rolled out a line of blended meat and plant products called Raised and Rooted in 2019, which went completely plant-based in December 2020. It also introduced a plant-based patty in its Jimmy Dean brand (albeit, served with egg and cheese), and released its first plant-based burger in May. Other big food companies such as Kroger, Tesco, and Unilever also have business units dedicated to creating plant-based products. Nestlé introduced plant-based meat in some of its products in 2020, including Stouffer’s Meatless Lasagna. And it joined the plant-based milk market with its Wunda line of milk made from pea protein.

More are surely coming. The barriers to entry to the market are not particularly high, said Sara Welford, an analyst at investment research firm Edison Group, citing how Impossible and Beyond were both startups.

Grizzle’s George is skeptical that traditional meat producers will get it right and favors the upstarts. “It’s hard to reprogram a large corporation to a set of values that were never core in the beginning. It’s way easier for an upstart company like Beyond to be mission-focused,” he says.

While there aren’t that many publicly traded companies at the moment, that will soon change, says Lienhard, creating more investment opportunities. 

“The average company in our portfolio grows between 30 percent and 100 percent,” he explains, estimating that in 12 to 24 months, there will be 10 plant-based companies listed on the stock market and 20 in four years. Blue Horizon is an investor in LIVEKINDLY’s parent company, The LIVEKINDLY Collective, which includes a portfolio of four plant-based meat brands.

The outlook for the overall market and companies that crack it is upbeat. Investors and consumers today are interested in aligning their money with their values.

“If people like a product, they also buy the stock,” says Lienhard, pointing to the popularity of Apple and Tesla stock. It’s not purely for investment reasons. For “millennial and Gen-Z investors, they prefer to invest in something that they are a fan of that they believe in.”

LIVEKINDLY does not give financial advice. Any opinions expressed by the author or expert sources are their own.