Investing in vegan stocks

What are vegan stocks?

Vegan stocks are stocks from companies that market to vegans. Most of these companies are food manufacturers that specialise in vegan-friendly and plant-based products. The vegan diet excludes meat, dairy products, eggs and all other ingredients derived from animals.

Dietary staples include fruits, vegetables, legumes and whole grains. Publicly traded companies that exclude animal products from their offerings may be considered vegan stocks.

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Why invest in vegan stocks?

It’s a growing industry that’s adding companies that qualify as socially responsible investments, and more and more people are becoming interested in veganism.

The global plant-based meat market — a hearty component of many vegan diets — was worth $US 12.1 billion in 2019 and is forecasted to reach $US 74.2 billion by 2027, according to a report from Meticulous Research.

With this in mind, it's no surprise that the plant-based food market is well-positioned to grow at a healthy rate.

In addition to a positive growth forecast, vegan stocks qualify as socially responsible investments. Socially responsible investments support companies that aim to have a positive social or environmental impact.

This type of investing has become more popular in recent years and gives investors the opportunity to support companies and causes they truly care about.

Whether you’re a vegan, vegetarian, flexitarian or just want to support companies that refrain from selling animal products, vegan stocks are one way to introduce socially responsible investments into your portfolio.

What unique risks do vegan companies face?

The risks facing vegan stocks are the same risks that face many new, rapidly evolving industries: instability.

This portion of the global food market is still small, to say the least. And while it’s definitely growing, it hasn’t proven itself long-term. Many companies that specialise in vegan and plant-based products are startups. And startups are an inherently risky investment.

There’s no guarantee these newer companies will stand the test of time, especially considering how the coronavirus pandemic has affected the way we dine.

Beyond Meat — one of the biggest players in the plant-based meat space — sells half its products to restaurants. And a number of its competitors are in the same boat. In light of the pandemic, restaurants simply aren’t seeing the same numbers of patrons, even considering the shift toward takeout, pickup and delivery options.

There’s no telling how the pandemic will affect the restaurant industry long-term. And with such a large cut of plant-based company sales going to restaurants, these companies will undoubtedly be affected.

Veganism has begun to take root in Australian dietary trends, but these companies may be too new for the experienced Australian investor to gamble on.

ASX vegan stocks

Most of the notable vegan and meat-free stocks are traded on the US stock market, but there are some companies that trade on the Australian Securities Exchange (ASX) and offer vegan products, including Wide Open Agriculture (ASX: WOA) and Jatcorp (ASX: JAT).

What ETFs track vegan companies?

Australian investors looking for a vegan-focused ETF may be pleasantly surprised to discover the U.S. Vegan Climate ETF (VEGN): the first publicly traded fund to focus on vegan investments.

The U.S. Vegan Climate ETF is a socially responsible fund that primarily filters out companies involved in animal products, testing, farming and animals used for sports or entertainment purposes. But the fund also exempts companies that:

Compare trading platforms

Before you can invest, you’ll need a brokerage account in Australia. Explore your platform options below.

Important: The standard brokerage fee displayed is the trade cost for new customers to purchase $1,000 of either Australian or US shares. Where a platform charges different fees for both US and Australian shares we show the lower of the two. Where both CHESS sponsored and custodian shares are offered, we display the cheapest option.

Bottom line

For Australians ready to add some plant-based investments to their portfolio, vegan stocks represent an investment opportunity on the rise and gaining momentum. But most companies in this industry have plenty more ground to cover before they can be considered a stable investment.

Review your platform options across multiple providers to find the brokerage account that meets your needs.

Frequently asked questions

• Are Beyond Meat products vegan?

  Yes, Beyond Meat products are 100% vegan-friendly.

• Can something be considered a vegan stock even if they sell animal products?

  Vegan pure plays — companies that exclusively offer vegan products — are rare. In fact, most of the U.S. Vegan Climate ETF’s top 10 holdings are tech companies that don’t offer vegan products, like Intel, AT&T and Microsoft. A stock can be considered a vegan stock if it offers vegan or plant-based products or if it offers products that don’t exploit animals. But be careful: some companies considered to be a vegan investment offering plant-based foods may also manufacture meat products. If you have strict ethical investing guidelines, investigate a stock before you purchase it to better understand what the company does and what it offers.

• What is veganism and how does it work?

  Veganism is a lifestyle characterized by the exclusion of animal products from material purchases and food consumption. Veganism aims to limit animal cruelty and the environmental impact of animal exploitation.

• How do you know if a company is truly vegan-friendly?

  A vegan-friendly company is one that avoids using animal-derived ingredients, engages in cruelty-free production practices and doesn't profit from industries like meat, dairy, or animal testing. Always review a company's sustainability reports, third-party certifications (such as PETA or Leaping Bunny) and its supply chain transparency before investing.

• Are vegan stocks considered ethical or sustainable investments?

  Yes, vegan stocks are often part of the ethical or sustainable investing category. They align with environmental, social and governance (ESG) principles by promoting plant-based alternatives, reducing carbon emissions and lowering reliance on animal agriculture – one of the largest contributors to global emissions.

• Can I invest in vegan stocks through my super fund?

  Some super funds in Australia offer ethical or sustainable options that include vegan-friendly companies. You can check your fund's investment strategy or speak to your fund manager to ensure it aligns with your values. If not, self-managed super funds (SMSFs) can provide more flexibility to include specific vegan stocks or ETFs.

• Do vegan stocks provide good returns?

  Performance depends on individual companies and market conditions. Some vegan and plant-based companies have seen strong growth as consumer demand rises, while others remain volatile as the sector matures. As with any investment, it's best to diversify and research before committing funds.

• How do I find vegan ETFs or index funds?

  You can search for ethical or ESG funds that list vegan or plant-based companies within their portfolio. Many brokers and fund providers now offer thematic ETFs focused on sustainable or cruelty-free sectors. Check the fund's holdings and mandate to determine how closely it aligns with vegan investing principles.

• Is vegan investing the same as ESG investing?

  Not exactly. ESG investing focuses broadly on environmental, social and governance factors, while vegan investing specifically targets companies that avoid animal exploitation. However, there's often overlap since many vegan companies score highly on ESG measures due to their sustainability focus.

• What risks should I consider before investing in vegan stocks?

  Vegan stocks can be subject to market volatility, consumer trend shifts and high competition in emerging plant-based industries. Additionally, some smaller vegan companies may struggle with profitability. Conduct due diligence and consider investing in diversified funds rather than relying on a single company.

• Are there any Australian vegan companies listed on the ASX?

  Yes. While the Australian market is smaller than the US in this space, there are ASX-listed firms involved in plant-based foods, sustainable agriculture and cruelty-free consumer goods. Examples can include producers of alternative proteins and eco-friendly food technology companies.

Written by

Shannon Terrell

Writer

Shannon Terrell is a writer for Finder who studied communications and English literature at the University of Toronto. On any given day, you can find her researching everything from equine financing and business loans to student debt refinancing and how to start a trust. She loves hot coffee, the smell of fresh books and discovering new ways to save her pennies. See full bio