Veganism: from the table to investments

With increasing awareness of the environmental impact of our food, more and more consumers are changing their diet in favour of vegan options. Even the financial market is following the trend. This new phenomenon is known as the “vegan economy” and “vegan investing”.

Although until recently it seemed destined to remain confined to a niche segment, now the interest in the vegan diet has become a global mainstream trend. Indeed, more and more people are being interpreted in terms of their consumption and investment choices. The result of this generally supports an increasing demand for products which the market is called to satisfy.

“Revolution” in progress (on the plate)

One of the areas in which this change in preference is most evident is that of meat consumption. Indeed, many consumers are abandoning meat in favour of “cultured” or plant-based meat, obtained from pulses.

According to a study conducted by UBS1, worldwide sales of plant-based meat substitutes are set to grow exponentially in the coming years: it is estimated that, in the next ten years (by 2030), the value of these products will increase from $4.5 billion to $85 billion. Also by this date, the food innovation market, which includes plant-based meat, could reach $700 billion in value, five times its current worth.

Choices influenced by “sustainable” motives

Evidence of the shift towards plant-based foods made by increasing numbers of consumers can also be seen in mass participation in initiatives with significant symbolic value. This is the case for the Veganuary Challenge2, an initiative launched in 2014 by the British non-profit organisation Veganuary, inviting people to eat only plant-based foods for the first month of the year. This year, more than 500,000 people took part in the challenge, which is twice the number of participants compared with two years ago.

Of particular interest are the reasons that motivate increasing numbers of people to abandon or at least reduce their consumption of animal foods. These reasons are, among other things, all attributable to increasing public awareness of sustainability issues. According to the Veganuary Survey 20213, the main reason for those adopting a plant-based diet (in 46% of cases) is linked to concerns regarding animal well-being; followed by personal health (22%) and environmental impact (21%). Furthermore, to a large extent, those who decide to make the change usually intend to stick to it: 85% state that they want to change their diet permanently, either by only eating plant-based food, or by reducing their consumption of animal foods by at least 50%.

Market response

The market naturally picks up on these trends, planning ahead to ensure it has the capacity to offer a satisfactory response, through various methods. For example, the number and quantity of vegan products is increasing on supermarket shelves4, fast-food chain menus5, and restaurant menus6.

The phenomenon is also having a significant impact in the investment world. For example, stock indices7 have been created for the development of ad hoc financial products that choose baskets based on principles and criteria inspired by veganism. Investment products and strategies look to the “clean economy”, with a view to the ecological transition of the development model, dedicating increasing space to considerations linked to veganism and sustainability in the agri-food industry8, mainly due to the related environmental impact and climate change.

Analysts and investors are increasingly focused on the return expectations of companies viewed as central to the veganism phenomenon9. Other effects that are also increasing, particularly among major investors, are engagement activities focused on sustainability issues linked to the agri-food industry in general: in five years, the FAIRR (Farm Animal Investment Risk and Return) network10, the world’s biggest network in this sector, has been joined by more than 250 international institutional investors, representing approximately $29 trillion dollars in combined assets.

Sources:

[1] Disruption at the dinner table (UBS) https://www.ubs.com/global/en/wealth-management/marketnews/home/article.1441202.html

[2] “Record 500,000 people take part in Veganuary as supermarkets promote plant-based food in mainstream media” https://ccbriefing.corporate-citizenship.com/2021/01/07/daily-media-briefing-1693/#05

[3] Veganuary Survey 2021 https://veganuary.com/veganuary-2021-survey-results/

[4] “New Plant-Based Foods Keep Arriving on Supermarket Shelves. We Tried a Few of Them”, Triple Pundit https://www.triplepundit.com/story/2021/new-plant-based-foods/720871

[5] “McDonald’s, in arrivo un hamburger vegano: si chiamerà McPlant”, Sky Tg 24 https://tg24.sky.it/lifestyle/2020/11/10/mcdonalds-hamburger-vegano-mcplant

[6] “Addio vecchio menù: sempre più fiorentini richiedono piatti vegani”, La Nazione https://www.lanazione.it/cronaca/addio-vecchio-men%C3%B9-sempre-pi%C3%B9-fiorentini-richiedono-piatti-vegani-1.5672043

[7] Us Vegan Climate Index https://www.beyondinvesting.com/our-indices/index/

[8] “Cosa devono sapere gli investitori sulla clean economy”, AXA Investment Managers https://professionali.axa-im.it/content/-/asset_publisher/kP8gd97YrKro/content/insight-framlington-equities-clean-economy-infografica-clean-economy/32114

[9] “Vegan Economy: come investire nell’industria vegana”, ig.com https://www.ig.com/it/strategie-di-trading/diventare-vegani--come-investire-nel-veganismo-201008

[10] FAIRR Initiative https://www.fairr.org/about-fairr/about-us/

 

Related article :

https://en-individual.axa-im.com.hk/content/-/asset_publisher/CZZJAOidSoE5/content/responsible-investment-sustainable-diets-a-new-theme-on-the-menu-for-investors-/26520 

 

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