Just over a year ago, Stockhouse told you about Beyond Meat Inc. (NASDAQ: BYND) as it embarked on its public market listing and the emerging value emanating from the plant-based food and beverage industry. The secret appears to be out, as far as meat-alternative food companies go, or could this just the beginning?
BYND put the spotlight on plant-based foods aside from the common choice among consumers - soy. For years, soy had been considered the gold-standard as the alternative to traditional animal-based foods (dairy and meat), but attitudes have shifted away from this line of thought. A study from Harvard University made connections between allergens found in soy and its genetically-modified (GMO) origins. Recent studies have also found that 50% of babies in the US who have a food allergy are also allergic to cow’s milk and half of those babies are also allergic to soy.
While Beyond Meat has many of the major fast-food retailers from
Burger King and
Tim Horton’s locked-down under
Restaurant Brands International Inc. (TSX/NYSE: QSR) , as well as
A&W (TSX: AW.UN) , is there still value in the market? Analytics firm
UBS projects the plant-based-protein market to grow to
$85 billion in 2030. It specifically targets the plant-based dairy market to grow to nearly
$38 billion within the next six years.
What else is there? One of the companies at the forefront of this movement is Else Nutrition Inc.(TSX-V:BABY) , who patented the first plant-based infant formula without hormones. The infant formula market is also valued at more than $90 billion (USD) and this company is tapping into two valuable streams at once. Else Nutrition looks like a well-educated operation, since it targets this favourable trend with the intent to expand to speciality, as well as plant-based and organic products. Since 40% of North American baby formula are specialty-made for those who are allergic or intolerant of dairy or soy, the interest in this market is clearly growing. More than 90% of protein formula found on store shelves comes from cow milk.
The implications are massive, a formula like this can be used as a meal replacement and it can be incorporated into other products and industries such as protein shakes, dairy supplements, whole-meal snacks and other functional foods.
Another branded food company worth keeping an eye on is Conagra Brands Inc. (NYSE: CAG). Its subsidiary, Pinnacle Foods, was founded by the Canadian food entrepreneur behind Yves brand veggie foods commonly found in the veggie meat grocery aisle, but now boasts Pinnacle’s Gardein brand food as well.
Plant-based products open up a market for those who are allergic to either dairy or soy, which are the two main options. Most food companies that are branching out into alternative foods are focusing on consumers who still eat meat, but regularly go for meatless alternatives, or “flexitarian” as they are known, which make up around 32% of US consumers.
Food for thought: Feel like you missed the boat on Beyond Meat’s IPO? A similar venture is making an identical journey. Impossible Foods brought its total funds to $750 million in May 2019 and this meatless burger maker is expected to go public in 2020. It is currently valued around $2 billion and also has a strong following.
For more on this industry, visit the Beginner's Guide to a Plant-Based Diet.
Have you looked into diversifying your portfolio with some alternative food products, or even taken then step to diversify your eating habits? Let us know in the comments below.