Wall Street takes notice of plant-based food trend


Richard Conti, Crain's New York Business 

February 06, 2020


Dunkin's breakfast sandwich can be ordered with fake sausage. Burger King offers its Whopper in meat-free form. Even New York–based Middle Eastern chain Taïm offers a plant-based kebab.


The public's appetite for beef, pork and seafood alternatives to real meat is making Wall Street take notice.


Now bankers are jumping on the vegan bandwagon. New Crop Capital's plant-based seafood alternative, Good Catch, which has a New York office, and local venture firm VegInvest, which funds startups that "strive to replace the use of animals," are pouring venture capital into this area, hoping to get in on the $5 billion-and-growing plant-based protein market.


Wall Street has definitely started to embrace the benefits of being vegan. This past summer Beyond Meat shocked the steak-loving industry when its stock shot up in value to more than $250 per share from its initial public offering price of $46. Even though Beyond Meat's stock closed out last year at $75, that moment convinced some that the time was right for vegan investing.


"We were all prepared for another Blue Apron," said Chris Kerr, New York–based chief investment officer with New Crop Capital, referring to the meal kit company, whose 2017 IPO fizzled. "Frankly that's what Tyson thought when it sold its shares. We were prepared to do the same thing. I'm glad we didn't."


These firms are all trying to cash in on the $14 billion vegan market that analysts predict will rise to $100 billion worldwide by 2030. It's a growing industry being watched especially by the global meat market, which may be valued at as much as $1.4 trillion.


"They care about it more today than they did yesterday, and I think they will care about it even more tomorrow," said Brian Holland, food products analyst for financial services firm D.A. Davidson Cos.


Kerr is determined to be part of this rapidly growing industry for the long term. He held on to his Beyond Meat stock while other early supporters, including Tyson Foods, dumped their shares. He sees the global market expanding from all directions: the U.K.'s interest in sustainability, the U.S.' focus on health, Brazil's interest in food safety and health, and Japan's preoccupation with allergens. The Chinese government, meanwhile, created dietary guidelines aimed at reducing its citizens' meat consumption by 50%.


All of these companies are trying to follow Beyond Meat's playbook. Beyond has yet to turn a profit, although the company claims it may be profitable this year. The stock, meanwhile, pops with every corporate food announcement about exploring a more plant-based protein future. Case in point: A Jan. 21 statement from Starbucks CEO Kevin Johnson about a more eco-friendly future prompted an 18% surge for Beyond.


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