Options for investing in the vegan segment

Options for investing in the vegan segment

the consumption of plant foods has been a growing trend in recent years. Given the growth of this sector, investment options in this area are increasing.

Discover some of them below.

what is food vegan?

The term vegan first appeared in 1944. Generally, it is a type of diet where all foods of animal origin are excluded, such as meat, fish, eggs, dairy products, among others.

So, all foods included in this type of diet are of plant origin. That is, foods such as fruit, vegetables, rice, pasta, among others are included.

O number of people vegan has increased significantly over the last few years. This evolution has been motivated by several factors:

  • Ethic: the creation and death of animals is something that brings a lot of suffering to these living beings. So people vegan do not consume food of animal origin to try to break this cycle of suffering for animals;
  • Health: some foods of animal origin, such as red meat, are associated with an increased risk of cancer, cardiovascular diseases, among others. Thus, a plant-based food brings greater health benefits, also preventing excess weight;
  • Environmental benefits: animal husbandry is an important contributor to climate change, due to the fact that it emits large amounts of CO2. In contrast, the production of plant-based foods generates less CO2 emissions.

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The sector’s potential vegan In the next years

the food market vegan has experienced significant growth in recent years, and the trend is expected to continue in the coming years.

So, according to a study by Precedence Research, one is expected average annual growth of this market above 10% until 2030. According to this entity, in 2021, this market, reached a global value of about 27 billion dollars. The expectation is that, in 2030, this value will already exceed the 65 billion dollars.

According to this study, the main factors that will contribute to the growth of this sector are the growing concern about climate change and its impacts, and still the increased incidence of cardiovascular diseaseleading to a greater concern in maintaining a healthy diet.

In terms of the geographic distribution of this market, North America is expected to be the biggest contributor. Nonetheless, very significant growth is expected from the Asia-Pacific region. Estimates point to an average annual growth of over 13% by 2030 in this region of the globe.

Also read: Stock Exchange: What are the main rules for making good investments?

Investment options in this sector

Bearing in mind the expected growth in the coming years for this sector, there are some companies currently listed on the stock exchange, which can be a investment option. Below, we highlight two of them.

Beyond Meat

It is a company linked to the sector. veganwhose main product is plant-based hamburgers. In addition to this product, the company produces others, namely sausages, also based on vegetables.

It is a company based in the United States and was founded in 2009. At the end of 2021, its products were already distributed in more than 90 countries.

In recent years, this company has had a great growth in its sales, from around US$297 million in 2019 to US$465 million at the end of 2021.

Beyond Meat distributes its products to the retail sector (hypermarkets, among others) and even restaurant chains. Sales to the retail sector represent around 70% of the company’s business.

Although the company sells to more than 90 countries, the North American market is clearly the most important.

Tattooed Chef

The Tattooed Chef brand was launched in 2017. It is a brand that produces frozen products of vegetable origin, such as pizzas, snacksMexican food, among others.

At the beginning of its activity, in 2017, this company had only two products. In 2022, it reached the mark of 140 products soldthrough an ever-expanding network of retailers that includes giants such as Walmart and Costco.

In terms of sales, there was a very significant growth: from around US$85 million in 2019 to US$213 million at the end of 2021. value between 280 and 285 million dollars not end of 2022, and the 600 million dollars in 2025. For this, the company has invested in the acquisition of new factories. In 2021, it acquired three production facilities, two in the US state of New Mexico and one in Ohio.

In addition to retailers, there are also a number of large companies linked to the food sector, which are investing in this area and selling this type of products through their own brands. Thus, some companies stand out:

  • Kraft Heinz through the Boca Foods brand;
  • Unilever;
  • Tyson Foods.

Also read: 12 golden rules for investing in stocks

Industry-linked ETF vegan

In September 2019, a Industry-indexed ETF vegan. Despite this designation, it essentially aggregates companies that do not work in the food sector. veganbut which are considered “friendly” to the environment and animals.

This ETF:

  • Includes companies with a high ESG rating;
  • Excludes companies that disrespect animals and cause them suffering;
  • Excludes companies linked to the fossil fuel sector, as well as companies linked to the military sector.

So, the main companies included in this ETF are Tesla, Visa, Mastercard, Nvidia and Google. That is, companies that are not food producers vegan.

It should be noted that, according to data as of June 2022, the companies included in this ETF generate about seven times less CO2 emissions than the average S&P 500 company, an index that aggregates the 500 largest companies listed on the North American stock exchange. Additionally, These companies use about 14 times less water than the average of S&P 500 companies.

Finally, in terms of profitability, since its creation, in September 2019, the annual average is 10%very close to the average S&P 500 return over the same period.

Read also: ETF: What they are and how they work as an investment option

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