Nourish your portfolio by investing in veganism and other food trends

More and more investment funds are focusing on the business of healthy nutrition, veganism and other plant-based trends. Changing eating habits against a backdrop of climate change are boosting a sector that is set to generate over €150 billion by 2030.

Eating is no longer a mere necessity; it has become a way of showing others what we stand for. More and more consumers are calling for conscious nutrition and to have more choice when it comes to what they eat and, above all, what not to eat. According to industry figures, forecasts predict that by 2050 the world’s population will have reached ten billion, and that the global middle class will grow by three billion people between now and 2030, leading to a 60% increase in the demand for food. And lest we forget the enormous challenge that the United Nations has set: achieving zero hunger and food security.

This trend has not gone unnoticed by investors, who have been positioning themselves for some time in companies that will benefit from the evolution of consumer preferences regarding nutrition and food, for example, towards veganism or the consumption of proteins for sportspeople. 

 

According to some sources, there are currently 600 million vegans in the world, with countries such as India, where 35% of its inhabitants consume only plant-based products, and Israel, where veganism is already practiced by 13% of the population. In fact, a report by the financial consulting firm Bloomberg claims that the sale of vegan products—the so-called plant-based business—will multiply its sales fivefold in the next ten years and that businesses and companies dedicated to veganism will go from generating €27 billion in 2020 to €150 billion in 2030, i.e. a growth of 250%.

If you are looking to benefit from this trend by investing, there are several ways to do so:

• Stock market. The simplest and most straightforward way would be to buy shares of companies focused on a certain type of food. Here, the options are countless. This is because, in addition to the companies that are dedicated exclusively to these food trends, we now have large multinationals in the sector launching their own brands of vegan or sports products, as well as promoting their ranges of vegetables or alternative proteins. 

What’s more, the product supply goes far beyond food, with vegan cosmetics becoming increasingly successful, and a shift in the textile sector towards the elimination of leather or the use of plant fibers. 

• Unlisted companies. Another option is to invest in unlisted companies through venture capital or alternative investment vehicles, which can give us access to private companies. This is an option worth considering, since there are a lot of very small companies in the sector that are not listed on the stock market, precisely due to their small size or because they are still in the initial stages.
• Investment funds. This kind of investment vehicle is an interesting choice as it is professionally managed, meaning that the management teams are in charge of studying the most attractive companies and deciding when is the right time to invest and divest.

Value of the plant-based food market worldwide from 2020 to 2030
(in billion U.S. dollars).

Source: Statista

In fact, many of the major international fund managers offer thematic funds focused on food as part of their product range. They also often include ESG criteria in the asset selection process. This refers to social aspects and the sustainability of the planet. We must remember that as the world becomes more populated and prosperous, pressures on climate change and the scarcity of resources increase.

• Agricultural commodities. Another possibility for those with financial expertise or access to specialist advice is to trade in the agricultural commodities that are used in vegan and plant-based diets. The idea is to take advantage of the fact that while we are reducing the consumption of meat, the consumption of plant products is on the rise, and so the demand for regular agricultural products should increase.

Here, the way to position oneself is to use an ETF, which is an exchange-traded fund that tracks indexes related to the sector in question and replicates them in the investment basket.