A boom in plant-based foods and advancements in farming technology could help boost environmental protections and create myriad opportunities for global investors, says Newton Investment Management private markets research analyst Katherine Kelly.
As consumers look beyond traditional meat consumption and consider the environmental impacts of their diet, plant-based foods, including meat substitutes, are seeing exponential growth.
According to a recent Bloomberg Intelligence report, the value of the global plant protein markets – stood at US$24bn in 2020 and estimates are it could jump to more than US$162bn by 2030.1
While alternative meat currently accounts for just under 1% of global sales, demand is growing fast, while other plant-based foods are also seeing healthy market growth. According to the latest estimates, plant-based milk alternatives now make up about 15% of total milk sales.2
Growing health awareness and concern about wider sustainability and the potential damage livestock farming can do to our environment are just two factors persuading some consumers to switch from meat to protein-based equivalents in a market which is increasingly attracting mainstream investor attention.
Newton Investment Management private markets research analyst Katherine Kelly says the ongoing Covid-19 pandemic has made many reconsider their overall health and diet. Against this backdrop, plant-based food solutions are moving beyond substitute meats and milk to encompass a wide range of foods, including dairy free cheeses and even seafood. All of this, she adds, is attracting interest from investors in moves which look set to drive further capital inflows to the market.
Waste not, want not
As concern about our environment continues to grow, the agriculture sector is also seeing a steady shift in thinking, with food manufacturers exploring new ways to limit their environmental impacts and cut waste.
According to Kelly: “While a lot of waste still goes on in farming and agriculture, there are some start ups making real efforts to tackle this by looking at the methods they use to grow crops and what they do with these products once they have been harvested.”
“Indoor farming and vertical farming – where crops are grown in vertically stacked layers – can save water, waste and limit environmental damage. These systems allow farmers to create special water and nutrient systems that they can be used repeatedly to grow plants, while other soilless farming techniques are also being developed.
“Growing plants indoors also means that, geographically, you can grow them almost anywhere. If these agricultural growth centres are built near the people who consume the foods they produce, companies could potentially make significant savings on transport costs.”
Advancements in technology could hold the key for further environmentally friendly means of food production and corresponding investment opportunities. While plant-based proteins have been a heavy focus, Kelly adds, scientists are also working to develop laboratory grown meat. This could, in theory, satisfy meat lovers without involving animal slaughter, although she notes there are question marks over the likely appeal of such products and the amount of capital needed to invest in their production.
Plant-based substitutes for meat, dairy and other farmed products have perhaps been most closely associated with vegetarians or vegans in the past. Today, there are signs broadening product ranges increasingly appeal to so-called ‘flexitarians’ who eat an increasingly plant-based diet without eliminating meat completely.3
Either way, plant-based meat production and wider technological advances look set to hold significant opportunities for investors in the months and years ahead as capital flows into farming and the wider food industry, Kelly concludes.
For Professional Clients only. Any views and opinions are those of the investment manager unless otherwise noted. This is not investment research or a research recommendation for regulatory purposes. For further information visit the BNY Mellon Investment Management website. http://www.bnymellonim.com
Notes
1 Food business news. (Based on August 2021 Bloomberg intelligence figures) Global plant protein market could hit $162 billion by 2030. 16 August 2021.
2 Ibid
3 Newfoodmagazine.com. Is the plant-based sector set for an investment boom in 2022? 01 November 2021.
The information, materials or opinions contained on this website are for general information purposes only and are not intended to constitute legal or other professional advice and should not be relied on or treated as a substitute for specific advice of any kind.
We make no warranties, representations or undertakings about any of the content of this website; including without limitation any representations as to the quality, accuracy, completeness or fitness of any particular purpose of such content, or in relation to any content of articles provided by third parties and displayed on this website or any website referred to or accessed by hyperlinks through this website.
Although we make reasonable efforts to update the information on this site, we make no representations, warranties or guarantees whether express or implied that the content on our site is accurate complete or up to date.
By Katherine Kelly, Research analyst, private markets, Specialist Research team, BNY Mellon
Katherine is a member of Newton’s specialist research team. In her current role, Katherine is responsible for building out Newton’s private market research and investment capabilities. Katherine joined Newton in September 2021, following the integration of Mellon Investments Corporation’s equity and multi-asset capabilities into the Newton Investment Management Group. Before joining Newton, Katherine was a senior research analyst, research analyst and junior research analyst at Mellon Investments Corporation and The Boston Company Asset Management (both BNY Mellon group companies). Specifically, Katherine was a research analyst on the global research team working with the consumer and technology groups on a variety of new IPO launches and early-stage company research. Additionally, she worked on the emerging markets small-cap product. Prior to joining BNY Mellon, Katherine was an intern at Marketfield Asset Management developing equity investment ideas and conducting macro-specific research. Katherine has a BA from Wellesley College in Political Science.
Read more articles by this author
Be the first to hear news and insights from Embark Group
Sign up to receive updates from Embark Group and its businesses. You can unsubscribe at any time using the link at the bottom of our emails, and we promise never to pass your details to a third party. Please consult our Privacy Notice for more information.