It used to be that if someone said they were vegan, the many meat eaters would automatically say words that were not flattering. The vegans operated outside the mainstream, but it was relatively easy to find stores which serviced the niche market. Then something happened to the market and although people may not be completely off meat, they do try some of the products and they went mainstream. Now the big supermarkets carry the products and private equity money is involved.
In an article by Jack Ewing and Lauren Hirsch of the New York Times News Service, companies such as Oatly and Beyond Meat and a whole host of others are raising money from the established private equity firms.
Oatly which went public on the New York Stock Exchange is a producer of a milk substitute made from oats that can be poured on cereal. As the public embraces climate change they want the foods they eat not to be a leading contributor.
Oatly is an entity owned by the Chinese government called China Resources, Verlinvest, a Belgian firm that in invests some of the wealth of the Anheuser-Busch InBev beer empire (think Heineken and others), Blackstone private equity owns 8%.
According to PitchBook which tracks the food industry, over $18 billion in venture funding is in food tech companies which makes food that tastes like animal products. Companies including Ripple (made from peas); Moalla (bananas), the world’s biggest producer of packaged food, Nestle has a line of alternative food.
In the US, milk substitutes make up a $2.5 billion industry that is expected to grow to $3.6 billion by 2025 and globally from $9.5 billion to $11 billion.
Linking to dividend paying stocks, often times dividend paying investors tend to be more conservative in their outlook, sometimes paying attention to the counter culture will make you money as trends change. When the kids are talking about their concerns, something in the marketplace will change and opportunity will open up.
There are more questions than answers, till the next time – to raising questions.