How do I invest in vegan stocks?
No bull, here are 9 stocks that are riding the vegan wave.
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With World Vegan Day coming up on 1 November, it's the perfect time to check out stocks that are animal-friendly and meat-free. Well, kind of.
Whatever your beliefs, veganism is taking off in a big way around the world. The number of vegans in the US grew by 600% between 2014 and 2017 according to a GlobalData report and data compiled by Chef's Pencil suggests Australia is second in the world for vegan popularity, with Google search volume for related queries hitting an all-time high in 2020.
Food corporations are taking note. Deloitte predicts the North American meat substitutes market will grow to $3 billion by 2025, an 80% increase from 2018. And there has been significant investment made by food companies in new vegan product ranges in recent years.
US conglomerate Tyson Foods made headlines after investing millions in meat alternatives leader Beyond Meat in 2016, only to sell its stake last year and launch its own rival line of plant-based protein products. After the success of its plant-based Garden Gourmet range, food giant Nestle announced it's investing millions to develop a new plant-based production facility in China this year.
The crux of it is, there's more than just ethical reasons to invest in veganism. The corporate world agrees, it also makes good financial sense.
What are vegan stocks?
In the strictest sense, vegan companies do not use any animal products in their goods or contribute to the exploitation of animals, such as animal testing. That includes cruelty-free beauty products, animal-free clothing as well as plant-based meat substitutes.
But if you're looking to invest in veganism, the rules are less clear cut. Almost all major food or healthcare companies have launched a range of vegan options either because of shareholder pressure or to capitalise on the trend, but this doesn't mean they're vegan.
For example, if you wanted to invest in meat alternatives brand MorningStar Farms, you'd need to buy shares in its parent company Kellogg's. While Kellogg's itself offers a number of vegan products, there are many that contain animal-based ingredients.
And although US food giant Tyson Foods is heavily investing in vegan-friendly products, it remains one of the world's biggest meat producers.
The crux of it is, there's a difference between investing in vegan companies and investing in a company with vegan interests.
For investors interested in chasing the trend, these differences might not matter all that much. Successful IPOs such as Beyond Meat's have proven that big names in the vegan space can equal big returns.
Unfortunately for those that are ethically minded, public companies that offer purely vegan products and have little or no business ties to non-vegan companies are very few (if non-existent). We've complied a list of stocks that that are either vegan-friendly or investing heavily in vegan products.
Stocks to invest in veganism
Beyond Meat is a producer of plant-based meats. Popular products include Beyond Burger, Beyond Sausage, Beyond Chicken Strips and Beyond Beef Crumbles. The company was founded by Ethan Walden Brown and Brent Taylor in 2009 and is headquartered in El Segundo, California.
- Headquarters: California, United States
- YTD performance (to 28 October): 106.55%
- Founded: 2009
- Market cap: US$9.744 billion
- Vegan: Beyond Meat claims all its products use vegan ingredients
The Very Good Food Co is a Canadian plant-based food technology company. It develops and distributes a range of plant-based meat and animal product alternatives. Its products include The Very Good Burger, Smokin Burgers, Very British Bangers, Pepperoni, Ribz and Taco Stuffier.
- Headquarters: Victoria, Canada
- YTD performance (to 28 October): 266.20%
- Founded: 2016
- Market cap: US$164.567 million
- Vegan: Focus is on the development of plant-based food
Ingredion manufactures plant-based sweetener, starches, nutritional ingredients and biomaterial solutions. In particular it's a major producer of plant-based proteins. Last year it announced its total investment in plant proteins would reach US$185 million by the end of 2020, including the construction of a new manufacturing plant.
- Headquarters: Illinois, United States
- YTD performance (to 28 October): -19.56%
- Founded: 1906
- Market cap: US$4.879 billion
- Vegan: Not strictly vegan but it produces the plant proteins used by food companies in vegan products
Kellogg's is best known for its ready-to-eat cereals and breakfast foods. The company has released a range of vegan cereals distributed globally and is the parent company to MorningStar Farms which offers vegan and vegetarian cuisines including meat alternatives.
- Headquarters: Michigan, United States
- YTD performance (to 28 October): -7.65%
- Founded: 1906
- Market cap: US$21.772 billion
- Vegan: Not vegan but it owns MorningStar Farms and offers a some vegan cereals
Conagra Brand is a global manufacturer and seller of processed and packaged foods. It offers a range of vegan-friendly products under its Healthy Choice, Birds Eye, Gardein, Healthy Choice and Marie Callender's brands. This year it announced several new plant-based meals and snacks.
- Headquarters: Illinois, United States
- YTD performance (to 28 October): 4.73%
- Founded: 1919
- Market cap: US$17.518 billion
- Vegan: Not vegan but it continues to expand its list of vegan-friendly offerings
The US Vegan Climate ETF tracks the 500 biggest public companies in the US but excludes any that engage in animal testing, sell animal products or are involved in the exploitation of animals for sport or entertainment. On the environmental front it also filters companies that contribute to fossil fuel energy production, water pollution or deforestation.
- Headquarters: Wisconsin, United States
- YTD performance (to 28 October): 8.08%
- Founded: 2019
- Market cap: N/A
- Vegan: Excludes companies that sell animal products or engages in the exploitation of animals
Roots Sustainable Agricultural Technologies doesn't produce any vegan products, though it is involved in the development of agricultural technologies aimed at addressing the need for more sustainable plant-farming practices, with a special focus on protein-based plants needed for meat-alternatives.
- Headquarters: Hod HaSharon, Israel
- YTD performance (to 28 October): -30.00%
- Founded: 2009
- Market cap: $7.46 million
- Vegan: Is not a producer though it offers technology solutions that assist in sustainable plant-protein agriculture
As one of the largest meat processors in the world, Tyson Foods is far from being a vegan company. However, it is investing heavily in plant-based protein and meat alternatives, including the launch of its new product range Raised & Rooted. In 2016, it bought a 5% stake in Beyond Meat, before selling out in 2019 and announcing its own range.
- Headquarters: Arkansas, United States
- YTD performance (to 28 October): -37.27%
- Founded: 1935
- Market cap: US$20.278 billion
- Vegan: Not vegan, though its Raised & Rooted brand offers plant-based meat substitutes
Bunge supplies and transports agricultural commodities including edible oils, milling products, sugar and fertiliser. Before Beyond Meat's IPO last year, Bunge held a 1.63% stake in the meat alternatives company, according to Bloomberg. It has reportedly sold at least part of its stake since then and partnered with Merit Functional Foods in the construction of a new plant-based protein production facility located in Winnipeg, Canada.
- Headquarters: New York, United States
- YTD performance (to 28 October): 0.85%
- Founded: 1818
- Market cap: US$8.108 billion
- Vegan: Provides key ingredients used in vegan products and meat substitutes
SPONSORED: Warren Buffet is a supporter, but is it too late to get on board?Read more…
How to buy vegan stocks
It's not easy to source truly vegan companies, especially those that are listed on a stock exchange. It requires a lot of digging to understand whether a company offers all vegan products or just a selection.
However, it's relatively easy to find companies that are positioned to benefit from the rise of veganism. You'll notice that many public companies investing in plant-based alternatives are listed in the US. Part of this is because the US is home to many of the world's largest food manufacturers. And many large non-US companies choose to list on Wall Street as a secondary listing.
To buy stocks listed in the US, you'll need to open a brokerage account that offers access to the US market, such as eToro. If you're interested in buying Australian-listed shares, you'll need to open an account with a broker that offers ASX stocks.
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