If you have ever considered investing in plant foods, now would be the right time, especially given the recent surge in interest in the plant feed industry.
One such company is Partake Foods, in which Jay-Z’s fund Marcy Ventures recently invested, bringing the vegan cookie maker $1 million and allowing founder Denise Woodard to expand into hundreds of stores. While companies typically need big dollars to get their products to the masses, these companies promise innovative plant proteins and better ones. Small businesses like these need investment to maintain distribution and reach the shops, 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. Jim Cramer’s Mad Money not only tells its viewers what’s happening but also gets under the bus when it comes to companies like Impossible Foods and Beyond Meat.
Investors with deep pockets were the catalyst – triggered by the success of companies like Impossible Foods and Beyond Meat, as well as other food companies.
The good news this week signals that more money is indeed going into the plant-based food sector. A GFI report analyzing food investment in the US and the rest of the world shows that there is a significant increase in investment in companies producing alternative animal foods. U.S. companies have received investments of more than $747 million, the report shows. That means $1.2 billion in investment from the US alone, the highest level since early 2017. The amount raised in 2018 also topped 11 per cent, a record high for the first quarter of a year in recent history.
That figure includes the $290 million raised by Beyond Meat in its IPO last year and $200 million in the first quarter of this year alone.
Alternative proteins remain the darlings of the plant-based food industry, but they are not the only ones currently on the market.
While the National Venture Capital Association recently released a report predicting that COVID-19 will affect VC financing for start-ups in the coming quarters, the companies in the plants are weathering the storm. Demand for plant foods, especially protein, has proven to be long-lasting, and when the opportunity arises to increase market share or gain share, the money will shine. For the full year 2019, total venture capital investments in crop food companies exceeded $1.2 billion, compared to $824 million invested in 2019.
The Financial Times reported that COVID-19 is transforming the North American food market, pointing to plant-based meat sales in the first eight weeks of the year, which have increased by 200 per cent compared to the same period last year, which grew by 265 per cent in those eight weeks. Neilson’s study found that purchases of vegetable meat increased by 279 per cent in March compared to the previous week and a whopping 1,000 per cent in April.
By comparison, fresh chicken sales rose by just 51 per cent over the same period, while beef sales rose by just 20 per cent in April.
The highest growth rates in this category are in oat milk, vegetables and meat, with dairy products and milk also growing rapidly, increasing by 34% over the same period. The Self-Inc survey found that 23 per cent of respondents said they eat more plant-based meals because of the current health crisis, while nearly 11 per cent said they eat more meat. We know that three things are needed to make vegan food possible: taste, convenience and price.
We are closer than ever to these three criteria and can’t just thank VCs, private equity and celebrity investments that are pouring into space.