Search

Investing in Plant-Based Food Stocks to Fight Climate Change

Updated: Aug 2

There is an enduring problem with our current food system: it is resource-intensive and unsustainable. Cultivating food is responsible for about one-quarter of all greenhouse gases emitted annually including the growing and harvesting of all grains, vegetables and animal products we consume (Poore and Nemecek 2019). A 2018 study on the Options for keeping the food system within environmental limits show that the world’s current food system is a major driver of climate change, depleting freshwater resources, polluting the land and ocean through excessive nitrogen and phosphorous inputs, encouraging deforestation and other unsustainable farming practices. With the global population set to increase to 10 billion people by 2050 and with 3 billion people expecting to join the global middle class by 2030, there will be an increasing demand for food. As nations urbanise and increase in wealth, so too do their citizen’s calorie intake increase. Resource-intensive foods such as meat and dairy will frequent the plates of over 3 billion people in the coming years (World Resources Institute 2016).


The livestock industry has a considerably noxious role within this system, accounting for 14.5% of the world’s greenhouse gases every year (New York Times 2021). Beef and lamb production have the most negative climate impact with 17.7kgs of CO2 being emitted from every 50gms of protein within beef while 9.9kgs of CO2 are emitted every 50gms of protein within lamb. Farmed crustaceans, cheese and pork are the three subsequent emitters. While this study averages the amount of CO2 being emitted, the consensus is plant-based foods have a lower impact than meat and dairy. A 2015 study concluded that a diet that is vegetarian 5 days a week and includes meat 2 days a week would reduce greenhouse gas emissions and water and land use by about 45% (Sustainable Table 2021). According to The Guardian, avoiding meat and dairy is the single biggest way to reduce your environmental impact on the planet (The Guardian 2018). For an interactive understanding of your environmental impact with food read: Reducing Food’s Environmental Impacts Through Producers and Consumers; for a global understanding visit CarbonBrief.


Plant-based diet can fight climate changes - news update by BBC
BBC News Article on IPCC Report

Source: BBC News


Why invest in plant-based foods?


As a result of the increasing and troubling reality of our global food system, meat and dairy sectors are currently going through an unprecedented level of competition and disruption. Fuelled by the growth of viable plant-based foods, companies across this spectrum are now investing heavily in acquiring and creating new products and brands which will appeal to the surging consumer demand for plant-based products. In the past year, $3.1 billion USD in investment capital has been directed at alternative proteins globally, trebling investment in 2019 (Life Science Investing News 2021). According to Meticulous Research, the global plant-based food market is projected to compound at 11.9% year on year between 2020 and 2027, reaching an investment of more than $74 billion USD.


The growth in the plant-based sector has largely been driven by the mainstream emergence of the ‘flexitarian’ consumer (people who still consume meat and dairy but seek to reduce the levels they consume), as well as increased numbers of vegetarians and vegans, as consumers respond to a combination of ethical, environmental and health concerns (Life Science Investing News 2021).


Industry Overview


The European plant-based foods market leads the way in terms of market size, with the European meat substitutes market accounting for around 40% of the global market. The market is forecasted to grow to €2.4 billion by 2025 according to the Allied Market Research.


The market growth of plant-based foods is expected to continue across all geographies, with the North American meat substitutes market expected to grow by a larger percentage than Europe, with strong growth also anticipated in APAC and LAMEA regions, albeit from a smaller base than in Europe. The North American meat substitutes market is expected to grow to €1.8 billion by 2025. The APAC and LAMEA markets are forecast to grow strongly to a market size of €1.5 billion and €0.8 billion respectively by 2025.


Closer to home, 42% of Australians have claimed they are eating less meat or none at all.[4] Findings by Deloitte Access Economics predict that the plant-based meat sector’s growth in Australia in the past year, if continued, will grow to an almost $3 billion food category (FoodFrontier 2020).


Plant-Based Meat Brands
Food Frontier - 2020 State of the Industry: Australia's Plant-Based Meat Sector

Source: Food Frontier


Significant Investment


In 2020, US$1.54 billion was invested globally in plant-based foods ventures alone. Success stories like Beyond Meat, whose stock price more than doubled since its public offering in May 2019 to February 2020, and Impossible Foods’ raise of US$700 million across 2020, signal strong investment appetite in plant-based meat ventures.


There has been significant investment aiming to meet consumer demand. The market has received investment from several high-profile individuals, as well as investors and companies, for example:

  • Tyson Foods Inc. £41 million investment in Beyond Meat Inc. in December 2017, for an undisclosed stake. Beyond Meat is a US-based plant-based meat alternatives producer

  • Bill Gates & Li Ka-Shing invested in Impossible Foods, a US-based start-up creating a “bleeding” plant-based burger. The company raised $1.3 billion over 12 rounds of funding

  • Serena Williams and Shaun White invested in Daily Harvest, a US-based frozen plant-based foods company

  • Richard Branson & Tyson Foods Inc. invested in Memphis meat, a US-based company that produces “clean meat” by culturing animal tissue from cells

  • Google co-founder, Sergey Brin, provided $330k to fund the world’s first lab-grown hamburger produced by Dutch start-up, Mosa Meat

Plant-based Companies: Opportunities and Challenges


Beyond Meat (NASDAQ: BYND)

Beyond Meat Logo
Plant-Based Food Stock (Start-up) - Beyond Meat

Source: Beyond Meat


Beyond Meat is presently the only publicly traded, purely plant-based meat alternative. Products include burgers, sausages, and ground beef. Beyond Meat went public in May 2019, and the stock is up by about 88% since the end of 2019.

At a glance:

US$406.8 million in revenue 2020

CAGR (Compound annual growth rate) 132% from 2017 to 2020

Total numbers of outlets (worldwide): 122,000 as of December 2020


The Very Good Food Company (CVE: VERY)


The Very Good Food Company Logo
Plant-Based Foods Stock (Start-Up) – The Very Good Food Company

Source: The Very Good Food Company


The Very Good Food Company Inc. is an emerging plant-based food technology company that designs, develops, produces, distributes, and sells a variety of plant-based meat, cheese, and other food alternatives. The company is well placed to take advantage of the sharp increase in online grocery shopping with its established eCommerce platform.


At a glance:

Growth of 364% in 2020 revenue to CA$4.6 million

Growth of 1,403% in 2020 eCommerce sales

Growth of 1,200% in 2020 wholesale distribution points to 1,300


Tattooed Chef, Inc (NASDAQ: TTCF)


Tattooed Chef, Inc Logo
Plant-Based Foods Stock (Start-Up) – Tattooed Chef, Inc

Source: Tattooed Chef, Inc


Ittella International and Forum Merger II Corporation completed a business combination to form Tattooed Chef, Inc as a Public Company on Nasdaq in October 2020. Tattooed Chef is one of the leaders in the frozen plant-based foods category.


At a glance:

US$148.5 million in revenue 2020 (YOY growth rate at 74.9%)

US$9.6 million adjusted EBITDA in 2020 (vs US$6.9 million in 2019)


Ingredion (NYSE: INGR)

Ingredion Logo
Plant-Based Ingredients Supplier Stock – Ingredion

Source: Ingredion


Ingredion provides plant-based ingredients to companies manufacturing vegan products and earned a spot on Ethisphere’s list of the world’s most ethical companies for the 8th consecutive year in 2020. Ingredion is the first and only ingredient supplier in North America to offer a complete range of 100% sustainable plant-protein isolates, concentrates, and flours.

At a glance:

US$6 billion in revenue 2020

7% adjusted EPS CARG (10-year)

10.8% adjusted return on invested capital in 2020


Australian Companies to Watch


V2Food


Alternative protein company - v2 food - Bloom impact investing
Alternative protein company - v2 food

Source: v2 food


V2 food is a large contender in the Australian alternative proteins market with ambitions to be the No.1 plant-based meat of choice for Australian households and to expand Europe, Asia and beyond. The company recently received $77 million in funding, having only launched in 2019. The products were developed in conjunction with the CSIRO and have already been taken up by fast-food chain, Hungry Jacks, and supermarket chains like Woolworths (Sydney Morning Herald 2020). V2 foods are unique because they can manufacture their ‘meat’ products using any standard meat production facility, minimising cost and maximising viability. Secondly, their products do not contain GMOs (Genetically Modified Organisms), preservatives or colourings, unlike other large competitors (Tech Crunch 2021). The company’s name stems from the idea of being the ‘second version’ of meat (Ag Funder News 2020).


At this stage the company is privately owned, however, you can see more ASX listed companies here.


Fable Food Co

Meaty Mushrooms - Fable Foods

Source: Fable Food Co


Fable food creates really meaty alternatives using primarily shiitake mushrooms and other real ingredients: pepper, tapioca flour, coconut oil and gluten free soy sauce (Fable Food 2021). The products imitate beef brisket, pulled port and other ready-made meat alternatives. The company recently raised $6.5 million in seed funding, after only launching in December 2019. Based on the Sunshine Coast in Queensland, the company is already stocking products in Australia’s largest supermarket chains like Woolworths and Coles. Their products also feature in Harris Farm Markets and popular burger chain, Grill’d. For more, read startupdaily and Business News Australia.


Circle Harvest

Alternative protein products from crickets and other bugs – Circle Harvest

Source: Circle Harvest


Established in 2007, Entomologist and Food Scientist, Skye Blackburn, created Australia’s first farmer of edible insects and is a world leader in edible insect farming techniques. Circle harvest has been developed for a Western palette, with their products spanning from cricket corn chips to ant seasoning salt to cricket powdered brownie mix (Circle Harvest 2021). In 2015, the company has received angel investment of $170k with the same amount being raised to date for product crowdfunding. In 2018 – 2019 the company has received accelerator/ incubator funding (Pitchbook 2021). Read the CSIRO’s 2021 Roadmap to Edible Insects for more about this sector.


Unethical Considerations


Despite the rise in the availability of plant-based foods products, the industry is still in a relatively early stage of its lifecycle and therefore offers significant room for growth. The industry’s global reach is expected to be enhanced by new product development and rising consumer demand. As a result, existing food and beverage companies are moving to protect and enhance their positions in the market, both through internally driven product development and innovation and through the acquisition of new brands and products. There are many companies that produce meat alternatives that have had a historically damaging relationship with the environment and continue to do so. This blog is therefore not an endorsement of each company featured, but a review of what listed companies today exist in the plant-based food space, the opportunities and challenges they present.


JBS S.A. (B3: JBSS3)


Meat Giant Stock – JBS S.A.

Source: JBS S.A.

JBS is a Brazilian meat producer and the world’s largest animal protein company. The company sees a future in plant-based meat, releasing a number of plant-based meat products through subsidiary companies, such as Seara’s Incrível range in Brazil and Planterra’s Ozo brand in the US.


The company, however, has been shown to have problematic links with supplying farms in the Amazon that participate in illegal deforestation. Since July 2019, five investigations by the Guardian, the Bureau of Investigative Journalism, Brazilian agency Repórter Brasil, Greenpeace and Amnesty International have linked JBS suppliers to illegal deforestation. A 2019 report by Greenpeace sadly shows JBS’ associations follow industry trends of unethical associations with Amazonian farms. JBS has attempted to remedy these environmental violations by creating a fund for sustainable development in the Amazon and creating a 2025 target to track its supply chain, which has been criticised as a delay tactic (The Guardian 2020).


There’s also considerable concern here, in Australia, about JBS taking over and expanding a major salmon farming producer in Tasmania, an industry that is also maligned by effluent damage into the River Huon. The salmon industry has been devastating local waterways without sufficient state policy to regulate it. JBS’ involvement in the purchasing of Huon Aquaculture for more than $500m AUD has been controversial, due to the company’s environmentally destructive history (The Guardian 2021).

At a glance:

US$52 billion in 2020 revenue (YOY growth rate at 32.1%)

US$5.67 billion adjusted EBITDA (YOY growth rate at 48.7%)

US$3.41 billion free cash flow (YOY growth rate at 87.3%)


Tyson Foods, Inc. (NYSE: TSN)

Food Giant Stock – Tyson Foods, Inc. - Bloom Impact Investing
Food Giant Stock – Tyson Foods, Inc.

Source: Tyson Foods, Inc


Tyson Foods is one of the world’s largest food companies and a recognised leader in protein founded in 1935. The company entered the plant protein category in 2019, with its Raised & Rooted brand, offering burgers and tenders. Tyson food might be offering plant-based meat but is also the world's second-largest processor and marketer of chicken, beef, and pork after JBS S.A. and annually exports the largest percentage of beef out of the United States.

At a glance:

US$43.2 billion in revenue 2020

10.3% CAGR (Compound annual growth rate) from 2011 to 2020


Kellogg’s Company (NYSE: K)

Kellogg's - Plant Based Stocks - Bloom Impact Investing
Fast Moving Consumer Goods (FMCG) Company Stock – Kellogg’s

Source: Kellogg’s Company

Kellogg’s has developed its plant-based food offering, selling a wide variety of meat substitutes under its MorningStar Farms brand which is known for its vegan and vegetarian options. The company is currently included in The Sustainability Yearbook 2021, as well as a member of The Dow Jones Sustainability Indices (DJSI), specifically The Dow Jones Sustainability World Index.


Despite this, Kellogg’s has historically reared its unstainable head with a history of promoting mono-cropping and a questionable association with human rights. The company has promoted for millions of acres of American farmland grow one crop only (maize) year on year proving to be terrible for soil fertility, bird and animal life. Kellogg’s checkered history in human rights has seen its downsizing workforce without benefits. More information can be found here (GradeFixer 2021).


An environmental study published by the Sustainable production and consumption journal on Kellog’s reveals that despite its efforts in sustainability, the firm’s supply chain still has a large carbon footprint. The results indicate that the average global warming potential (GWP) of Kellogg’s breakfast cereals is 2.64 kg CO2 eq. per kg of product. The main GWP hotspots are the ingredients (48%) and energy used in the manufacturing process (23%); packaging and transport contribute 15% each. Rice is the single largest contributor to the GWP of the ingredients (38%). The manufacturing stage is the main contributor of primary energy demand (34%), while the ingredients are responsible for more than 90% of the water footprint.


At a glance:

US$13.77 billion in revenue 2020

5% CAGR from 2016-2020


Cultivated Meat - The Future of Meat?


Cultivated meat, also known as cultured meat, is genuine animal meat (including seafood and organ meats) that is produced by cultivating animal cells directly. The process of cultivating meat uses the basic elements needed to build muscle and fat and enables the same biological process that happens inside an animal. Cultivated meat is identical to conventional meat at the cellular level.

Last year, several leading cultivated meat companies transitioned to pilot-scale facilities to manufacture the first wave of commercialised products following regulatory approval. The Singapore Food Agency approved the world’s first cultivated meat product for sale in December 2020. Shortly thereafter, the 1880 restaurant in Singapore marked the historic first commercial sale of the approved cultivated chicken bite produced by California-based company "Eat Just".


Regulatory bodies in the United States have announced agreements to regulate the product, while the European Union awarded a multimillion-euro grant for research. The industry, which at present comprises fewer than 100 startups, attracted roughly $350 million in investments in 2020 and about $250 million thus far in 2021 from some of the largest animal-protein players, including Tyson and Nutreco, and well-known investors, including Temasek and SoftBank.


According to McKinsey, depending on the factors such as consumer acceptance and price, the market for cultivated meat could reach $25 billion by 2030. However, it is important to note that the long-term climate impacts of cultured meat vs. beef cattle are less clear. According to a 2019 study from the University of Oxford that compares the temperature impact of both forms of meat production 1,000 years into the future, cultured meat results in less CO2 production initially, but accumulates in the long term, overtaking the warming impact of beef cattle in some instances. Read more here.

Possible Cultivated Meat Market Size - McKinsey - Bloom Impact Investing
Possible Cultivated Meat Market Size

Source: McKinsey & Company

Getting started


There can be a problem in the plant-based food sector with some companies not holding themselves to good enough ESG credentials. While many companies have seen an opportunity in a plant-based future, these aspirations are not always ethically motivated. At Bloom, we are excited about the growth of the plant-based, alternative meat sector to make a positive climate impact.


You can make an impact!

Do you want your money to work for not against nature? Then download the Bloom app and start using your investments to fight climate change.

Don't forget, you can also join the Bloom community if you want to learn more about sustainable investing We have an upcoming array of events where you can learn how to make a positive impact on your finances.



The information on this website is prepared by Bloom Impact Investment Services Pty Ltd (ACN 651 965 098 AR 001294778), who is an authorised representative of Cache Investment Management Pty Ltd (ACN 624 306 430 AFSL 514 360) (Cache). Bloom’s financial products are issued by Melbourne Securities Corporation Limited (ACN 160 326 545 AFSL 428 289), as disclosed in the relevant PDS. All information provided in this article is general information only and does not take into account your personal circumstances, financial situation or needs. Before making a financial decision, you should read the relevant product disclosure statement and target market determination consider whether the product is right for you and whether you should obtain advice from a professional financial adviser.


174 views0 comments