What is the Vegan Market and How Much it's Worth
Many foods, such as vegetables, are inherently vegan-friendly, and therefore the vegan industry is already significant. The worldwide vegan market is estimated to be worth $17 billion in 2020, with a compound annual growth rate (CAGR) of 11.4 percent projected between 2021 and 2026. According to global management consulting company Kearney, sales of plant-based meat substitutes will increase by 20% to 30% yearly in the next years. In contrast, the worldwide meat business is estimated to be worth about $1 trillion, indicating that the vegan sector has the opportunity to expand.
However, in the next years, cultured meat is expected to surpass plant-based meat products as the most popular substitute.
A lot of important elements are driving the popularity of vegan eating. Plants are seen as a more effective means of feeding the world's rising population, which is expected to climb from 7.6 billion to about 10 billion by 2050.
However, the reception of vegan alternatives to meat by meat-eaters has been the fundamental cause of their popularity. Vegetarianism was divisive when it first gained popularity: you either ate meat or didn't; vegetarian options were off the table if you liked meat.
On the other hand, veganism is more flexible, partly due to how it relates to climate change and partly due to a rising understanding of the potential health advantages. In truth, many individuals who eat animal substitutes aren't entirely vegan; they're merely attempting to cut down on their meat consumption. People who follow a semi-vegan or vegetarian diet are known as flexitarians or reducetarians.
According to the Vegan Society, non-vegans in the United Kingdom accounted for 93 percent of meat substitute purchases in 2019. With initiatives such as meat-free Mondays gaining traction in the UK, it's believed that at least a quarter of evening meals are vegan or vegetarian.
But it's not only about attracting meat-eaters. Vegan alternatives to other household essentials, such as almond milk and dairy-free cheeses, are increasingly widely available.
Businesses compete for vegans.
Businesses have been more compelled to evolve because vegan goods appeal to non-vegans, implying they can reach a wider audience.
According to the Vegan Society, by 2025, slightly under half of the UK population will follow a flexitarian diet, about double the number of vegans. To put things in perspective, fewer than 2% of the British population is vegan, yet half are expected to have converted in 2018, illustrating how quickly veganism is spreading. Naturally, when demand rises, supply will rise as well.
Many large corporations have introduced new vegan goods in response to increased demand or pressure from consumers or shareholders. This has been accomplished through producing new goods in-house or purchasing smaller enterprises to gain a competitive advantage.
The tendency is spreading across the food supply chain. Major food companies have created vegan product lines. Nestlé bought a plant-based food company, Sweet Earth, while Unilever transformed its famous daily items vegan-friendly by launching new PG tea bags. Tips that are more suitable for almond or soy milk.
Food retailers, such as supermarkets, are not just carrying more third-party vegan items but also establishing their lines. For example, Tesco recently debuted its Wicked Kitchen collection, which includes meat substitutes and herbs, spices, and prepared veggies.
People are growing more concerned about the composition of non-edible items due to the vegan movement. For example, the vegan cosmetics industry was valued at $14.4 billion in 2019 and $15.3 billion in 2020, with projections of $18.4 billion in 2023 and $20.8 billion in 2025.
Even corporations that aren't immediately associated with veganism, like Tesla, are making adjustments - the electric automaker recently deleted the leather option for seats owing to environmental concerns.
Which Vegan Businesses Should You Invest In?
You essentially have three alternatives for investing in vegan firms, depending on your budget and desired degree of risk/reward.
Invest in a publicly-traded vegan firm: Some vegan enterprises have publicly traded equities. On this page, I've included a few.
Invest in a public semi-vegan firm: Some public corporations possess many brands, others of which are vegan and some of which aren't. Although it is not my first option, it is something to consider.
Invest in private vegan firms/startups (for experienced investors) - While investing in private vegan enterprises is a possibility, they are not standard stocks that you can purchase and sell at any time. In this piece, I'll go through your possibilities for finding them. They have the most risk and reward since you're getting in on the ground floor.
Why Should You Consider Investing in Vegan or Plant-Based Stocks?
Vegan cuisine has gained popularity. Consumers adopt vegan diets because they believe they provide health advantages, are environmentally friendly, or support animal rights. Plant-based alternatives are gaining popularity among the general omnivorous community, even though just approximately 3% of Americans are vegan. According to the Good Food Institute, sales of plant-based foods in the United States will exceed $7 billion in 2020, growing 27% yearly.
The meat industry alone is large enough to cause havoc. According to Fitch Solutions, the worldwide meat sector is worth $1.4 trillion, while the US meat industry is worth $240 billion. Although alternative meats are now more expensive, this premium may reduce as plant-based producers grow in size and supply chain disruptions caused by Covid subside.
And meat substitutes aren't the only ones available. Plant-based milk, vegan cheeses, poultry, and even fish provide possibilities.
Beyond Meat
Beyond Meat is a pioneer in the field of plant-based meat substitutes. Beyond meat's sales were expanding at triple-digit rates before the epidemic. The company's products may now be found in supermarkets and on restaurant menus. The firm said that its products were accessible in around 128,000 retail and foodservice venues in over 85 countries as of September 2021.
In the vegan meat replacement market, the firm continues to develop and release new products, including plant-based chicken tenders in 2021 and an enhanced version of its Beyond Burger. Beyond meat has a history of investing extensively in research and development (about 10% of sales), which could help the firm maintain its leading position over time. It excels in creating new goods, improving technology, and raising quality standards.
Oatly
In May 2021, Oatly created a sensation with its initial public offering (IPO). Thanks to a Swedish oat milk company, oat milk has surpassed soy milk to become the second-best-selling plant-based milk replacement after almond milk.
While Oatly has gained notice in the United States because of a creative marketing effort and a new product category, the firm is far from new. It has been creating oat-based alternative dairy products, such as milk, ice cream, yogurt, cooking creams, spreads, and to-go beverages, since the 1990s.
Oatly's products are currently sold in over 65,000 retailers and 60,000 coffee cafes worldwide. As of September 2021, the company reported its products were available in over 128,000 retail and foodservice establishments in 85 countries.
Calavo Growers
Avocados are a cornerstone of the vegan diet in many parts of the globe, and the millennial generation loves them. Avocados account for around half of Calavo Growers' sales, and their rise has helped the company's stock price treble between 2011 and 2020.
Calavo confronts intense competition as a commodities producer, and prices for commodities like avocados are continuously shifting. However, since avocado trees may take up to 13 years to develop and demand the fruit is increasing, the firm is well-positioned for long-term growth.
Tattooed Chef
Consider investing in Tattooed Chef if you want exposure to the large plant-based frozen-food sector. In late 2020, the firm went public via a special purpose acquisition company (SPAC), providing another positive signal for vegan stock investors.
Tattooed Chef's sales increased by 75% to $148.5 million in 2020, and its goods are currently sold in over 4,300 retail locations. Ninety percent of its revenues are generated by its three largest supermarket customers, which is a warning indication that customer concentration is a problem and an indication of the company's development potential as it continues to add new stores as clients.
The Tattooed Chef brand has gained popularity, and it has surpassed private-label items as the company's primary source of income. Although raising the exposure of the Tattooed Chef brand increases marketing expenditures, the firm may charge more for branded items.
Tattooed Chef plans to increase its e-commerce company, extend its product range, and expand worldwide in the future.
Superfood Laird
Vegan cuisine lends very nicely to specialty categories, and Laird Superfood shines in this regard. Laird Superfood is a plant-based coffee creamer, hydration product, beverage-enhancing supplement, and other drink product company founded by athletes Laird Hamilton and Gabrielle Reece. Picky Bars, which it acquired in May 2021, offers access to the snack market.
The firm, founded in 2015, benefits from the founders' strong reputations. It concentrates on nutrient-rich goods and plant-based cuisine, and the Laird Superfood brand is more linked with healthfulness than other vegan businesses.
According to the business, Laird wants to increase its retail presence and introduce new product lines, even though its current goods are already servicing a multibillion-dollar market.
Bounti
Bounti is one of numerous "ag-tech" businesses that have gone public in recent years, using cutting-edge technology in the age-old agricultural sector.
Local Bounti, founded in 2018, produces lettuce and herbs using a proprietary process called "Stack and Flow," which it defines as a hybrid of vertical farming and hydroponic greenhouse gardening. Its methods are more ecologically friendly than conventional agriculture since they use 90% less water and 90% less land while boosting harvest efficiency.
Local Bounti has had very little income and recently became public through a SPAC in November 2020. On the other hand, management is aiming for $462 million in sales by 2025, and investors are optimistic about the firm since its market valuation is comparable to established agricultural companies like Calavo Growers.
AppHarvest AppHarvest
AppHarvest is a pure-play vertical farming startup that went public via a SPAC in February 2021 and is now focused primarily on producing tomatoes, with ambitions to expand to other crops in the future.
With a 60-acre indoor Kentucky farm as its flagship location, the business is creating some of its biggest indoor farms.
AppHarvest is yet to generate any income, raking in just $6 million in the first three quarters of 2021, but it plans to significantly scale its operations. By 2025, the firm hopes to have 12 farms, with revenue ranging from $350 million to $450 million and adjusted EBITDA of $115 million to $130 million.
AppHarvest also released its first value-added product, "The Food Fight," a salsa that swiftly sold out in its first batch. The company's capacity to extend beyond only producing is shown by its success.
Mission Produce
Mission Produce, another avocado vendor on the list, went public in 2020 and bills itself as the world's most sophisticated avocado network. Avocados are purchased from all over the globe, including California, Mexico, Peru, South Africa, and New Zealand, and the company owns more than 10,000 acres worldwide. The firm also sells mangoes.
Supply chain concerns, workforce constraints, the effect of the COVID-19 outbreak on eateries, and a delayed start to the Mexican harvest season have all hampered the avocado sector. Avocado prices declined 2% in fiscal 2021, thus impacting the company's performance.
The good news is that these patterns are just transitory, and the firm should profit from the pandemic's ultimate recovery and supply chain normalcy. Avocado prices are anticipated to rise in 2022 as well.
B&G Foods, Inc. (NYSE: BGS)
B&G Foods, Inc. (NYSE: BGS) is ranked 10th among the top 11 vegan stocks to buy right now.
Farmwise LLC, a shelf-stable and frozen food business situated in New Jersey, were bought in early 2020. Veggie Fries, Veggie Rings, and Veggie Tots are among the vegan frozen foods produced by Farmwise LLC. Gluten, wheat, soy, dairy, tree nuts, and peanuts are all absent from the company's vegan, non-GMO project-certified goods.
The company's market capitalization is $1.9 billion. In 2020, B&G Foods, Inc. had $1.97 billion in sales, up from $1.6 billion in 2019. The corporation pays a 6.23 percent dividend yield, and BGS stock has increased by 61 percent in the last year.
After the fourth quarter, 15 hedge funds reported holding shares of B&G Foods, Inc. (NYSE: BGS). At the end of Q4, the total value of these stakes was $57.2 million.
Diamond Hill Capital included a few companies in one of their investor letters, and B&G Foods Inc. (NYSE: BGS) is one of them. Diamond Hill Capital said: "B&G Goods, Inc., a processed and packaged foods company, outperformed, owing to excellent weekly scanner data that revealed better business trends as customers filled up their pantries and freezers throughout the quarantine."
The Hain Celestial Group, Inc. (HAIN) is one of the world's largest producers of organic foods and natural goods, and it ranks 9th on our list of the top 11 vegan stocks to buy right now. The organic food firm established in New York produces vegan and vegetarian meals under the Yves Veggie Cuisine brand and non-dairy drinks and desserts under the Natumi brand.
In the second quarter of 2021, the firm had net revenues of $528.4 million and a market valuation of $4.2 billion. Hain Celestial reported its fourth consecutive quarter of sales growth, with net sales up 4% from $506.8 million in the same period last year. In February 2021, Piper Sandler raised Hain Celestial from Neutral to Overweight, with a $50 price objective. HAIN's stock has increased by 55.4 percent in the last year.
At the end of the fourth quarter, 23 hedge funds disclosed having interests in The Hain Celestial Group, Inc. (HAIN), up from 21 firms a quarter earlier. At the end of Q4, the total value of these interests was $964 million.
Conagra Brands, Inc. (NYSE: CAG)
Conagra Brands, Inc. (NYSE: CAG), a Chicago-based consumer and commercial food maker, comes in 7 on our list of the top 11 vegan stocks to buy right now. The firm produces shelter staples, frozen food, and restaurant food goods such as sauces and meals. Gardein, Birds Eye, Log Cabin, and Duncan Hines are among the company's vegan and plant-based brands, bought from Pinnacle Foods in October 2018 for $10.9 million.
The company's market capitalization is $18.5 billion. In 2020, the company's sales will be $11 billion, up from $9.5 billion in 2019. The corporation pays a 2.85 percent dividend yield. On April 21, Citigroup Corp analysts assigned Conagra Foods a Neutral rating. The price goal was established at $42. After participating in Dogecoin content last quarter, the social media savvy firm experienced a 160 percent increase in Twitter followers and tremendous interaction in just 25 days. CAG's stock has increased 13.45 percent in the last year.
Laird Superfood (LSF)
Last but not least, Laird Superfood, which just went public, is on our list of vegan stocks to buy.
Legendary surfer Laird Hamilton developed a unique superfood creamer that provided him with prolonged and healthy functional energy when combined with his everyday coffee. Laird's own vegan foods firm, Laird Superfood, was born from that unusual recipe, which comprises a blend of coconut, plant-based lipids, and mineral-rich superfood algae called Aquamin.
The Original Superfood Creamer, Laird Superfood's hallmark product, has been warmly accepted by the public for its clean label, substantial energy boost, and real taste that blends effortlessly with coffee. Many consumers see it as a welcome change from the boring, old, and sometimes heavily processed Nestle creamers that now dominate the market.
That's why Laird's sales increased by 2,200 percent from 2016 to 2019 and are expected to increase by another 100 percent or more in 2020.
However, today's sales are a little over $20 million, while the creamer industry in the United States alone is worth over $3 billion.
In other words, Laird's hyper-growth story is far from over. The company will continue to grow at a rate of 20% or more over the next several years as the $3 billion creamer market is completely uprooted by vegan creamers, which Laird's Superfood Creamer should stand out given its brand, superfood ingredients, and affordable price point.
How Do Vegans Invest Their Money?
Vegan investors have a limited number of possibilities. You may either invest in particular companies (such as those featured on this page) or in a vegan exchange traded fund (ETF) (not many to choose from at the moment).
Vegan Brands are Owned by Who?
Bigger (non-vegan) food companies own many vegan brands. Conagra (which owns Gardein) and Hain Celestial are examples of this (owns Yves).
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