Veganism as an Opportunity

Daltium Opinions

If there is one thing that we can all learn from the current pandemic – it is to be meticulously careful about what we put in our mouth. When news broke out of a new coronavirus strain, people were quick to point the finger at the rather peculiar eating habits of some Chinese. Imagine just how the west is reacting to bat soup, roasted peacock, or raw monkey brain. Many expressed their observations that included comments on food sourcing, sanitation and hygiene.

Halfway around the globe – there is a growing movement that has acquired a rather picky taste for food. People who describe themselves as vegan doubled in the UK between 2015 and 2019 – for reasons we are going to explain here. The same trend can be seen in many advanced countries in the EU.

Concerns about climate change have turned many environmentalists into vegans – they would rather have fake butter or fake meat than the real thing. As writer Jamie Blackett has pointed out, veganism is a good thing for food giants such as Nestlé, which excels at turning cheap vegetable oil, sugars, and carbohydrates into imitation meat and faux milk.

As unpalatable as that is, mainstream media is supporting all these “fake foods” to feed a market that has turned vegan. In the UK, for example, the National Farmers Union has found itself in a difficult position combatting information disseminated by media – albeit paid and sponsored by giant food processing companies. One of these fake documentaries is “Meat: A Threat to Our Planet” that argued that livestock farms are polluting our planet and goes against the farming norm that methane produced by grass-based livestock is reabsorbed by new grass.

Also, as a planet of meat-eaters – sickly pigs and mad cows have prompted carnivores to reconsider their food - with many opting to go vegan. About one-quarter of the world’s pigs died from the African Swine Fever in 2019. China, where the pandemic was severe, lost nearly half of its pig population. Talking about viruses – we can’t yet tell if there is a link between the African Swine flu (which did not affect humans) and the new coronavirus, which is fast becoming a global epidemic. Animal welfare standards in China are low, yet meat exports are incredibly high from China to the developing world. Now, that is how a virus (if ever) can catch on.

All that said, the rise of veganism also has merit. A better food intake. But it has also opened an opportunity for big business to jump on. Maybe it is even an opportunity that they continually enflame - because veganism is becoming a profitable opportunity for the processed and fake food industry.Now, how do you want your fake steak microwaved?

While pondering your Vegan steak, here are some stocks to consider as an appetizer in the interim:

Beyond Meat are behind plant-based burgers that have prompted some of the world’s largest meat producers to jump on the vegan bandwagon. It should be noted that Beyond Meat has already enjoyed a spectacular rise since last year from $65 to $235 in July of last year - but are now trading around $110.

The established US meat titans that have dominated so much of the last century, including Tyson Foods, Smithfield, Perdue Farms, and Hormel Foods, have all rolled out plant-based alternative burgers, meatballs and nuggets.

China is expected to buy an additional $16 billion of US farm products this year – over and above the $24 billion it purchased in 2017. That will include a lot of (real) meat and poultry.

Gaucho, the up-market chain of steakhouses, is planning to sell only carbon-neutral beef by 2022. Gaucho is owned by holding company Rare Restaurants, which is, in turn, owned by investment houses SC Lowy and Investec.