If you have ever thought about investing in plant foods, perhaps it is time to do so, especially if you are like us and have thought about it.
One such company is Partake Foods, in which Jay-Z’s fund Marcy Ventures recently invested, bringing in $1 million for the vegan cookie maker, allowing founder Denise Woodard to expand into hundreds of stores. Small businesses like these need investment to maintain distribution and reach stores where consumers are starting to eat more plant-based foods while maintaining a healthy immune system (which has pushed up food prices since the CODIV-19 crisis). While companies typically need big dollars to mass-market their products, they can also promise innovative plant proteins and better ones. Jim Cramer of Mad Money not only tells his viewers what’s happening, but he also gets under the bus when it comes to companies like Impossible Foods and Beyond Meat.
The trigger is investors with deep pockets, but not just them, Cramer and other investors say.
The good news this week signals that more money is indeed going into the plant-based food sector. A GFI report analyzing $1.2 billion worth of food investment in the US shows that US companies have received more than $747 million in investments since the start of the year, up 11% from the same period last year. The amount raised in 2018 also exceeded the total investment of $4.5 billion last year by 11 cents, meaning more was invested than in 2017, the report said. And a new report from the US Food and Drug Administration shows that the number of companies producing alternative animal foods is on track to its highest annual growth rate in a decade.
That figure includes the $290 million raised by Beyond Meat in its IPO earlier this year, according to GFI.
But alternative proteins remain the favorites of the plant-based food industry, according to a recent report by the Center for Science in the Public Interest (CSIP).
Demand for plant foods, especially protein, has proven its resilience, and crop-production companies are weathering the storm, according to the National Venture Capital Association, which recently released a report predicting that COVID-19 will affect VC financing for start-ups in the coming quarters. If there is a way to increase market share or gain share, the money will light up. For the full year 2019, VC investments in food and beverage companies in North America exceeded $824 million, more than double the $6.5 million invested in 2019.
Neilson’s study found that purchases of vegetable meat increased by 279 per cent in March compared to the previous week. The Financial Times reports that COVID-19 is transforming the North American food market, pointing to a 200 per cent increase in sales of vegetable meat in the first eight weeks of 2019, compared to the same period last year, which Neilson says grew by 265 per cent in the eight weeks.
By comparison, sales of fresh chicken rose by just 51 per cent over the same period, and beef by just 16 per cent, according to Neilson.
Oats, milk, vegetables and meat had the highest growth rates in this category. Oat milk grew by a whopping 476 percent, while milk grew by 34 percent over the same period. High growth was also seen in dairy products, Neilson said, with oats and milk gaining 1.5 times the value of milk and 2.4 times the value of vegetables, while milk gained 34 cents over the same period. The Self Inc survey found that 23 percent of respondents said they eat more plant-based meals because of the current health crisis, while nearly 11 percent said they eat more meat. Do you know that you need three things to make vegan food possible: taste, convenience and price?
Not only can we thank the VC, private equity and celebrity investments that are flowing into the space, but we are closer than ever to meeting all three criteria.
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