Vegan

From coconut coffee creamers and dairy-free yogurt to veggie burgers, the market for plant-based, natural foods and beverages are outpacing total food and beverage sales overall.

According to SPINS’ 2019 State of the Natural Industry, the market for natural food and beverage products is growing at 5.0% compared to that of total food and beverages growing at 1.7% year-over-year.

While the growth is astounding, it’s not necessarily surprising.

If you’ve been to the grocery store recently, you know that plant-based products are no longer limited to one aisle and aren’t marketed to just one specific type of consumer. Plant-based products are everywhere and stores are asking all shoppers to try them.

In other words, you don’t have to be a strict vegan to buy the latest brand of oat milk or plant butter.

And, more and more consumers are trying the plant-based versions of more traditional products, knowingly or unknowingly adopting a flexible vegetarian status known “flexitarian.”

The term flexitarian was coined in 2009 by registered dietitian Dawn Jackson Blatner who promoted eating more plants and less meat overall, or rather, being vegetarian most of the time. The diet is geared to promote overall health while not totally depriving followers of animal-based products.  

Because of the lax guidelines that allow for mostly eating more veggies that the diet promotes, consumers are increasingly adopting it in one form or another—and eating more vegan products than ever.  

Consider the success story of Beyond Meat, the plant-based burger company whose stocks skyrocketed after going public in May 2019, up 213% by November. According to UBS investment, Beyond Meat’s sales could reach $1.8 billion by 2025.

Who is buying Beyond Meat’s plant-based burgers? It’s not just vegans, but meat eaters, too. 

As the number of vegans (including those with part-time buy-in) is on the rise, so is the unprecedented demand for plant-based products in grocery stores, restaurants, and beyond.

What Is Veganism?

Vegetarian diets typically eliminate meat and fish but allow for the consumption of eggs and dairy. Veganism is much more restrictive, eliminating all items of animal origin, including any food made with animal flesh, dairy products, eggs, or honey. The authentic Vegan lifestyle goes further, extending beyond food consumption to everything from textiles to clothing and cosmetics.

Generally, veganism offers three primary features: (1) additional curtailment of animal mistreatment and slaughter, (2) reduction of certain health risks, and (3) decrease of environmental footprint. 

That’s right, it’s good for the environment. 

Beyond being healthy for our bodies, veganism is promoted as a tool to combat climate change. Raising meat requires a massive use of grain and water. After slaughter, farmed animals are processed, transported, and stored, requiring the consumption of even more energy. Plant-based options tend to be more environmentally friendly. 

The number of people choosing to live a vegan lifestyle worldwide is on the rise.  In the United States, the demographic has grown by 600 percent between 2014 and 2018, from 4 million to 20 million people. The vegan population in the UK similarly quadrupled between 2014 and 2018.

This growth of veganism in conjunction with non- or sometimes-vegan consumers who buy plant-based foods for health and environmental reasons means a fast-growing market and more investment opportunities than ever. 

Why Invest in Veganism?

Vegan products are a $7.1 billion market, growing at a rate of 10.1%. The plant-based meat market alone is anticipated to be valued at $27.9 billion by 2025 globally. 

The market for other plant-based dairy alternatives, like cheese and milk, are also growing at unprecedented rates. Milk alternatives include soy milk, almond milk, rice milk, oat milk, coconut milk, and flaxseed milk. According to a recent study, the global dairy alternatives market is expected to grow, reaching $26.86 billion by 2023. 

Alternatives to traditional butter exist as well. The US plant-based butter industry is valued at $198 million and growing. Between 2017 and 2019, sales of plant-based butter increased 15%, growing faster than the sales of traditional butter.

And these trends are going mainstream. In addition to niche plant-based butter brands like Milkadamia and Miyoko, Country Crock debuted its “Plant Butter” made with olive oil, avocado oil, and almond oil in September 2019. Non-dairy yogurts made with almonds, cashews, or coconut are also on the rise. 

This phenomenon isn’t just on grocery store shelves, but in restaurants, too. White Castle offers the Impossible Sliders, Burger King offers the Impossible Whopper, and Carl’s Jr.’s offers the charbroiled Beyond Famous Star. 

And, Wall Street is taking notice the sales of plant-based products. Beyond Investing introduced the US Vegan Climate ETF, listed on the New York Stock Exchange under the ticker VEGN, in fall 2019. The ETF excludes oil-related stocks as well as meat-centric companies. 

Vegans are passionate about the environment and their health. And, no matter what degree of vegan one is, they are willing to pay the cash for the burger that’s just as good or maybe even better than the meat alternative. 

In other words, plant-based products are here to stay, and varieties and consumer buy-in are sure to grow.

How to Invest in Veganism

But getting involved in a market segment as large and diverse as veganism — which impacts everything from food & beverage, to personal care, clothing and more — isn’t as straightforward as it sounds. But, by investing in mutual funds and ETFs that offer exposure to veganism as a whole, investors can spread their impact out to all of the companies that are working in this sector. A search on Magnifi suggests there are a number of ways for investors to get involved in veganism this way.

Magnifi is changing the way we shop for investments, with the world’s first semantic search engine for finance that helps users discover, compare and buy investment products such as ETFs, mutual funds and stocks. Open a Magnifi investment account today.

This blog is sponsored by Magnifi. The information and data are as of the  June 2, 2020 (publish date) unless otherwise noted and subject to change.