Some people invest in vegan stocks because they’re vegans themselves and they want to put their money where their morals are. Others are looking to cash in on hot stocks as the long-simmering meatless movement finally trends its way into the mainstream. Others are buy-and-hold investors who are by this point convinced that the growing trend has much farther to climb. Either way, you’ve got options — including the 10 featured below.
Like Vegan Food, Plant-Based Stocks Have Gone Mainstream
Until recently, veganism — and even vegetarianism — was a tiny niche that was completely alien and often ridiculed in much of America. Investors certainly weren’t lining up to plunk down cash on companies that dealt in things like seitan, tempeh and portobello steaks.
That’s all changed.
People have become far more aware of what they’re eating, contributing to the growing number of those who follow a vegan diet. Others have adopted a vegan diet because of concerns about the cruelty and suffering experienced by animals on factory farms or about the harm the meat and dairy industries cause to the environment.
The vegan food market reached $15.4 billion in 2020, according to Expert Market Research, and that market is expected to soar to $26.1 billion in just five years, by 2026. If you’re looking for stocks that could help you cash in, consider the following options:
- Beyond Meat (BYND)
- Tattooed Chef (TTCF)
- Impossible Foods (N/A)
- Laird Superfood (LSF)
- The Very Good Food Company (VRYYF)
- Burcon NutraScience Corp. (BUROF)
- Maple Leaf Foods (MLFNF)
- Else Nutrition (BABYF)
- Oatly (OTLY)
- US Vegan Climate ETF (VEGN)
Beyond Meat (BYND)
Beyond Meat is the rock star of the vegan world. In the same way that people who know nothing about basketball have heard the name LeBron James, Beyond Meat is now a household name even among the most die-hard carnivores.
It’s not hard to understand why.
The brand’s burgers, sausages and meatballs are sold nationwide at the most mainstream of mainstream chains, including Target, ShopRite, Dunkin’, Carl’s Jr., TGI Fridays and Walmart. Its May 2019 initial public offering was the stuff of legend, soaring 163% and nearly tripling in price in a single day, breaking every previous IPO’s record since the start of the 21st century.
So, the brand is popular and famous, and its early investors made a bundle in the beginning. But is Beyond Meat stock a good buy today? The former Wall Street darling fell out of fashion in 2020 due to pandemic shopping, losing 50% of its value in the first six months of 2021. Shares reached a 17-month low after the company revised its third-quarter 2021 outlook, significantly revising net sales estimates down, Investor’s Business Daily reported. Shares slumped again with the earnings release, which reported declining sales at fast-food restaurants due to restaurants cutting hours and menu offerings, as well as reduced demand at grocery stores and increased transportation costs.
Some thought Beyond had reached market saturation. However, Wall Street analysts announced on Tuesday, Dec. 14 that McDonald’s will expand the plant-based burgers following successful market testing in a number of locations throughout the U.S., Reuters reported. Beyond is also working with Taco Bell.
Shares of the world’s biggest meatless brand are currently being sold near their lowest price over the last year, which could be good news for anyone looking to get in now.
Tattooed Chef (TTCF)
Tattooed Chef is one of the hippest vegan brands on the market. It specializes in preprepared frozen plant-based products. The stock was red hot, but it cratered by almost 14% in February, scaring many investors off.
TTCF went public through a process that involves a special purpose acquisition company.
SPACs issue some stock through something called special warrants, which allow initial investors to redeem their stock purchases at a prefixed price. When Tattooed Chef announced its warrant redemption date on Feb. 16, more than 10.7 million warrants were cashed in. That appeared to be a selloff and sent the stock southward.
Shares are currently over 30% down so far this year, possibly due in part to actual selloffs during spikes in price. But the company is not in trouble — its growth and revenue numbers have been strong, with the company reporting record revenue and earning a spot as a top 10 brand across club, grocery and mass channels, Tattoed Chef announced in its earnings report for the third quarter of 2021.
Over 13,000 stores carry Tattooed Chef-branded products. The company’s May acquisition of Foods of New Mexico increased production capabilties and should support Tattooed Chef’s planned expansion of its product line, which will be overseen by a new CEO, Gaspare Guarrasi, who took the helm on Nov. 30. Analysts currently rate Tattooed Chef stock a “hold,” with an average price target for the next 12 months of $21.33 — nearly 35% above its most recent closing price of $15.84 — based on a low target of $16 and a high of $24.
Impossible Foods (N/A)
Anyone who missed out on the early Beyond bonanza might soon be getting something that is incredibly rare in the world of IPOs and investing in general — a mulligan. Forbes reported in early November that Impossible Foods CEO Pat Brown wasn’t prepared to be specific about when the company would go public other than to say it wouldn’t be before the end of the year, but he did say it was imminent.
Reuters reported in August that Impossible had appointed insider David Borecky as chief financial officer, suggesting the company might be inching closer. Borecky played a prominent role in Square’s 2015 IPO. So if you’re interested, set a Google alert or check back frequently. There’s a chance Impossible might go public through a SPAC instead of through a traditional IPO.
Impossible Foods was looking at going public at a valuation of at least $10 billion, Reuters reported in April. The company has raised over $2 billion from the venture funds of mega-rich investors like Bill Gates and Li Ka-Shing — and most recently, from Mirae Asset Global Investments, which led a funding round that brought in almost $500 million, making Impossible Foods the best-funded and highest-valued plant-based burger startup in the U.S., according to Reuters.
Earlier in December, Impossibe Foods reported an 85% increase in quarterly retail revenue compared to last year, MarketWatch reported, citing data from market research and analystics company IRI. Its plant-based meat products are available in over 20,000 stores, including big-box stores and major supermarkets. Walmart, Target, Sprouts, Publix, Wegmans and Kroger, as well as Starbucks — and, most impossibly, Burger King — all carry Impossible Burger. And as of last week, you can grab an Impossible Burger from one of 40 locations of Impossible Foods’ new fast-food restaurant chain, which is operating out of Dog Haus hot dog chain kitchens.
Laird Superfood (LSF)
Even newer to the public market than Beyond Meat is Laird Superfood, a company that grew out of a single, supercharged coffee creamer concocted by surfing star Laird Hamilton. Despite the unfortunate timing of September 2020, Laird’s IPO was a smashing success. It didn’t hit triple digits like Beyond Meat, but its shares did jump 75% from their initial price at the start of the day, according to Barron’s.
Its most recent quarterly report, for the third quarter of 2021, revealed a smaller-than-expected loss of $0.59 per share vs. a Zacks consensus estimate of $0.64. It also brought an earnings surprise, with net sales of $10.9 million — a 45% increase compared to the previous year. Direct-to-consumer sales were up 108% and wholesale sales were up 21%. Gross profits were up 29.4%, according to a press release.
Shares are down over 30% for the year, but some analysts see that as an opportunity — and in some cases, a stellar opportunity. Two of three analysts reported by Yahoo Finance give the stock a “strong buy” or “buy,” with an average target price of $33. The stock closed at $11.87 on Dec. 14.
The Very Good Food Company (VGFC)
A small, emerging vegan food technology startup called The Very Good Food Company spent much of 2020 growing too big too quickly for investors not to take seriously. A Canadian company, it experienced massive, triple-digit growth in terms of both revenue and sales last year. It opened an online store called The Very Good Butchers, which sells gourmet vegan meats like barbecue pulled jackfruit, British bangers, steak, ribs and pepperoni, as well as specialty nondairy cheeses like pepper jack and smoked gouda.
But the real secret to the company’s 2020 success — and the future growth so many industry experts believe is still ahead — can be traced to expansion.
Very Good was shackled to an undersized facility in Canada, but it opened two enormous new facilities totaling tens of thousands of square feet of production space. Just one of them can produce 37 million pounds of product a year, an increase in production capacity of 2,690%. In March, Very Good broke its own sales record yet again.
However, this has been a difficult year for Very Good, with its stock seemingly in a freefall since January. But the tide might be changing. The company released a statement on Oct. 7 announcing the appointment of Justin Steinback, a global leader in the consumer and packaged goods and food service industries, to its board. A few days later, it announced it would begin trading on Nasdaq on Oct. 13 under the ticker symbol VGFC. And in December, the company reported record sales from its Black Friday and Cyber Monday promotions as well as expanded distribution of its Stuffed Beast into select Canadian supermarket locations.
Very Good is still risky — even speculative, at 82 cents per share — but an investment could pay off for patient, long-term investors as the company ramps up production next year — perhaps by a factor of 27 within three years, according to Seeking Alpha — and continues to expand its retail operation.
Burcon NutraScience Corp. (BRCN)
Companies like Impossible and Beyond Meat get all the fanfare — when you bite into one of their sizzling, surprisingly meaty meatless burgers at a Burger King or TGI Fridays, after all, it’s their name that’s on the menu. But if you’re looking to invest in the science behind the customer-facing finished product, consider a few shares of Burcon NutraScience. The company does the complex and high-tech work of extracting plant protein from raw materials like peas and canola for the production of things like alternative milk and mock meat.
The top brands in the biz rely on Burcon to make the building blocks of their vegan fare — and investors took notice initially. After securing tens of millions of dollars in funding, BRCN caught fire in August 2020 when its 12-month price target jumped from $3 to $4.25. By February 2021, the target was raised again, this time to $6. Despite a stock-price drop-off since then, a Stonegate Capital Partners analysis suggested a midpoint valuation of $6 based on a range of $5 to $7.50, suggesting the stock could be undervalued at its current price of $1.11 as of Dec. 14. The analysis considered Burcon’s production facility expansion, its partnerships with Nestle and Bunge Limited, anticipated growth in the plant-based protein market and Burcon’s leadership in developing plant proteins.
Maple Leaf Foods (MLFNF)
Yet another Canadian company that’s way ahead of the curve is Maple Leaf Foods, which is a big player in the packaged grocery store segment of the vegan industry.
In 2019, it began a massive expansion with the creation of a division called Greenleaf Foods, which it developed to accommodate the brands it was gobbling up. These include Field Roast Grain Meat Co. and Lightlife, its plant-based protein brands. At the same time, it began building a massive new manufacturing facility. That facility — located stateside in Indiana — is now just one part of a larger expansion that Maple Leaf will complete by 2022.
In March, Simply Wall St reported that insiders were buying up large chunks of MLFNF, which is usually a good sign for a company’s stock. However, following two quarters of disappointing sales, the company announced on Nov. 4 that it would review its plant-based division. Sales in that division were down 6.6% in the third quarter of 2021 and 20.7% in Q2, Food Dive reported. The stock closed up 3.4% on Nov. 5.
The earnings challenges likely aren’t confined to Maple Leaf. “We are seeing a marked slowdown in the plant-based protein category performance which may suggest systemic change in the extremely high growth rates expected by the industry,” said Michael H. McCain, president and CEO of Maple Leaf Foods, as reported by Meat+Poultry on Nov. 5.
Keep in mind that Maple Leaf Foods also offers meat-based products, so its portfolio of brands is not comprised only of those that offer plant-based products. Its frozen and refrigerated foods, which include meat-based offerings such as pot pies, sausages and deli meats, are marketed under names like Schneiders and Swift.
Analysts rate Maple Leaf stock betwen a “buy” and “strong buy” with an average price target of $39.86 based on a low of $30, which nearly equals the current $29.70 share price, and a high of $45.
Else Nutrition (BABYF)
Anyone looking to get in on a specialized niche within the larger vegan industry might consider buying a few shares of Else Nutrition, a smaller company that deals specifically in vegan infant food. Based in Israel, Else Nutrition makes a plant-milk formula for babies that is currently undergoing regulatory procedures, plus a formula for toddlers and a nutritional product suitable for children of any age.
With the youngest generation born after 1995 now having children or about to have children, the floodgates of the baby food market are about to open to the most vegan-friendly generation in history. In an effort to get ahead of the competition, Else recently signed a distribution agreement with Imperial Distributors of Worcester, Massachusetts. Perhaps even better, Else announced on Oct. 4 that it has been approved for the Kroger Ship e-commerce service, which allows consumers to purchase Else products on both Kroger.com and Vitacost.com.
Else announced in early December that it will establish a dedicated U.S. office and operations to meet growing demand. The new U.S. headquarters, based near Columbus, Ohio, has a full-time staff of five, which the company expects to double in 2022.
The company saw online sales increase 27% in the third quarter of 2021 compared to the previous quarter and 77% compared to the first quarter. In addition, Else received conditional approval to list its stock on the Toronto Stock Exchange, and it has been invited by Amazon to launch an account that would allow it to sell products on all of Amazon’s European marketplaces. Also last quarter, Else products had been listed at more than 1,200 natural food and grocery stores, and it successfully had listed its products on Walmart.com and on Kroger’s online platforms.
Oatly, which calls itself the world’s original and largest oat drink company, makes oat-based dairy alternatives that won the praises and — and investments — of celebrities like Oprah Winfrey and Jay-Z, who purchased minority stakes before the company went public earlier this year. It’s products include oatmilk, frozen desserts, “oatgurt” and soft serve. Although Oatly is relatively new in the U.S., it has operated in Sweden for over 25 years, and it recently opened a facility in China. Oatly products are available in more than 20 countries worldwide.
At its May initial public offering, Oatly priced shares at $17, raising $1.4 billion, CNBC reported. Share prices gained over the few weeks following the IPO but have declined fairly steadily since then. However, there’s no indication the company is down for the count. In its earnings report for the third quarter of 2020, Oatly reported record quarterly revenue of $171.1 million, an increase of 49% compared to the same quarter last year. Over nine months, it saw a 54% increase in revenue, to $457.3 million.
Oatly has a consensus “buy” rating from analysts surveyed by Yahoo Finance, with 13 out of 16 analysts rating it a “buy” or “strong buy.” The average price target of $15.42 suggests the stock has plenty of room to grow from its current price of $8.11.
US Vegan Climate ETF (VEGN)
Picking individual stocks is a risky venture that few people are qualified to do with any success over the long term. Giants like Warren Buffett have advised against it for decades. This is particularly true in emerging industries, where brands come and go rather quickly.
Exchange-traded funds let you buy into a collection of stocks with a similar theme with the purchase of a single share that can be bought and sold on the open market just like any stock. Since they’re not actively managed like mutual funds, ETFs are as cheap as they are accessible.
ETFs provide instant diversification and remove the guesswork for investors who are interested in an industry or sector, but who are too unfamiliar with that industry to be confident in their choices. Exciting niche industries like biotech, alternative energy and blockchain all have their own ETFs, and on Sept. 10, 2019, the vegan world joined the club. That day, Beyond Investing launched the world’s first vegan-themed ETF, which also caters to environmentalists — the US Vegan Climate ETF, which trades under the aptly named ticker symbol VEGN.
Instead of randomly picking a single vegan stock — or two or three — that sound like they might be good bets, consider VEGN. The purchase of a single share gives you a little sliver of each of the stocks that represent shares of companies that meet the ETF’s standards of ethical and humane treatment of animals and the earth. What’s more, VEGN thus far has remained unaffected by the volatility seen in many of the individual stocks. Other than a March 2020 dip signaling the beginning of pandemic shutdowns, share prices have risen steadily, gaining 24.89% so far this year.
Keep in Mind
These are just a few examples — there are many ways to invest in the meatless movement beyond just the hot stocks of the day. Vegan commodities include things like oats, wheat and soy as raw materials, for example. You could also invest in a company like Tyson Foods, which is not a dedicated meatless company — far from it — but one that is growing its already impressive line of vegan offerings.
Daria Uhlig contributed to the reporting for this article.
Data was compiled between Dec. 14 and Dec. 15, 2021, and is subject to change.