7 Vegan Stocks to Buy Now for the Future of Food – InvestorPlace

Posted: October 16, 2020 at 11:55 am


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My investment philosophy is simple. Invest in today, what is going to be big tomorrow. Applied to the food world, this philosophy has one straightforward takeaway: Buy vegan stocks.

For years, Americans have been obsessed with their meat. Steak and potatoes; burgers; hot dogs. These are classic American meals that defined eating throughout the 20th Century. But todays youth view meat-eating through an entirely different lens. They dont see fancy steak dinners and juicy burgers they see lines of cows, packed into hardly livable conditions, emitting tons of methane gas every year and contributing significantly to global warming. All just to produce a piece of meat that is actually pretty bad for your heart and liver.

Because they look at animal-based meat through this entirely different lens, theyve shunned meat-eating.

According to a Utopia survey of 18 to 24 year-olds in Germany, more than half of those surveyed have given up eating meat. Meanwhile, a survey from The Food Institute found that 65% of Generation Z Americans want a more plant-forward diet, while 79% choose to go meatless one or two times a week. And a YouGov poll found that one out of five young people believe that the future of eating is meat-free.

Theyre right.

Plant-based food is the future of eating and over the next decade, the enormous legacy animal-based foods industry is going to be entirely disrupted by emerging plant-based foods companies that are winning over the hearts (and wallets) of young consumers (who, for what its worth, are becoming the driving force of the global consumer economy).

In other words, its time to buy vegan stocks and the best vegan stocks to buy today are:

The first entry on this list of vegan stocks to buy is the most well known vegan stock of them all: Beyond Meat.

The plant-based meat maker is for all intents and purposes the face of the vegan revolution. The companys meat-less burgers, sausages and other meat products are served fresh through various fast food chains like Blaze Pizza, Burger King, Carls Jr and Del Taco and packaged through various grocery stores.

Beyond Meat should be able to leverage its first-movers advantage, strong brand equity and awareness, advanced faux meat construction process, robust production capabilities and widespread fast-food and grocery store distribution to sustain leadership in the vegan meat market over the next several years.

Indeed, I see Beyond Meat as the Tesla (NASDAQ:TSLA) of vegan meat.

To that extent, BYND stock has huge long-term upside potential.

A much smaller name in the vegan revolution, Else Nutrition is specialized on the plant-based food transition in the infant nutrition market.

In August, Else Nutrition brought to market, for the first time ever, a plant-based toddler milk formula, comprised of almonds, buckwheat and tapioca. The Israeli-based company is also in the process of bringing to market a similar plant-based milk formula for newborns and babies (under one years-old).

These two new products should see enormous uptake over the next several years, mostly because the generation of young consumers born post-1995 who are exceptionally plant-forward, are also the generation of consumers that are becoming or will become parents over the next decade.

As they do, these health-conscious parents who are already eating a plant-forward diet, will very likely choose a plant-forward diet for their little ones as well. Else Nutrition presently offers the only plant-based toddler milk formula in the North American market.

Competition will arrive over the next few years. But Else should be able to leverage first-movers advantage, purpose-driven branding and specialization in this space to forever remain an important player in the market meaning that small-cap BABYF stock could soar between now and 2025.

Another food vertical primed for disruption thanks to the vegan revolution is the frozen foods market, and the best way to play this particular disruption is by buying Forum II Merger Corporation, which is a blank-check company that has agreed to acquire Tattooed Chef one of the leaders in the frozen plant-based foods category.

Tattooed Chef specializes in making pre-prepared, plant-based frozen foods that are GMO-free, organic and protein-rich. The companys best sellers include organic acai bowls, cauliflower pizza, Mexican street corn, cauliflower stir-fry, zucchini spirals, organic mac and cheese, so on and so forth.

The companys product portfolio is basically the dream freezer of your typical health-conscious, eco-sensitive, time-constrained Millennial and Gen Z consumer. Its no wonder that as these consumers have become more plant-forward and garnered more purchasing power, Tattooed Chefs sales have soared by 47% in 2018, 77% in 2019 and another 101% so far in 2020.

But this is still just a $400 million company, in the first innings of disrupting the $55 billion U.S. frozen foods markets.

As the market gets veganized over the next five to ten years, FMCI stock will surge higher.

Another way to play the vegan revolution in frozen foods is by buying Maple Leaf Foods.

Maple Leaf is a Canadian packaged foods company with an assortment of frozen and refrigerated meats products under various brands, like Maple Leaf sausages, Scheniders salami plates, or Swifts chicken pot pies.

But, in 2019, Maple Leaf began an all-out blitz into the plant-based food category with two vegan food brands the company acquired back in 2017: Lightlife and Roast Fields.

Specifically, in 2019, Maple Leaf created a separate subdivision for those brands called Greenleaf, with its own reporting segment, Plant Protein Group and aggressively upped marketing and advertising spend for those brands, while committing to broader distribution deals and building out a huge 230,000 square foot manufacturing facility in Indiana dedicated entirely to plant-based food processing and packaging.

The results of this plant-based blitz are in the numbers.

In 2019, Maple Leafs newly established Plant Protein Group reported 27% sales growth. So far in 2020, sales are up more than 30%. Of course, this has led to an acceleration in the companys overall growth narrative, where sales have gone from rising 6% over three years between 2015 and 2018, to soaring 13% in one year in 2019.

This growth narrative acceleration will persist for the foreseeable future. As it does, MLFNF stock will keep pushing higher.

Although the consumer-facing brands get all the love and attention in the vegan stocks revolution, this revolution is actually built on the back of something consumers dont see: the complex scientific process of turning plants into faux meat and at the heart of that process is extracting protein from plants.

Think soy protein. Pea protein. Oat protein.

Plant protein extraction is very hard to do. So hard that big companies like Beyond Meat and Impossible Foods outsource it to plant protein suppliers.

So, if youre looking for a picks-and-shovels play on the vegan revolution, plant protein suppliers are your answer, and in this space, the best pick is Burcon NutraScience.

Burcon has been in the plant protein extraction game for over 20 years, and throughout its many years, the company has developed a patented extraction process which produces functionally superior pea and canola proteins. Because of this, the company has signed a big partnership with the worlds largest food and beverage company, Nestle.

In late 2020, the company alongside its JV, Merit Functional Foods will bring online a massive pea and canola protein production facility in Canada. This facility will give Burcon the means and resources to start producing, at scale, plant protein for Nestle.

Thus, over the next several quarters, you will likely see Burcons pea and canola proteins start to appear in Nestle food and drinks. As that happens, tiny BUROF stock could soar, starting what could be a multi-year ramp in the stock as its presence continues to expand across the vegan food markets.

Looking for the next Beyond Meat? The Very Good Food Company could be it.

The Very Good Food Company is an $80 million, relatively unknown Canadian vegan meat company that makes everything from vegan burgers and sausages to taco mix, steak and bacon, and sells those products under The Very Good Butcher brand. Many customers view these products as some of the best vegan meat products in the market, with superior taste and texture compared to even products made by Beyond Meat.

In other words, the Very Good Food Company is a high-quality supplier for vegan meat and maybe even the highest-quality supplier out there.

Unfortunately, the company is supply constrained. They make all of their meat in a 4,000 square foot production facility in Victoria. That means that while the company is killing it on the west coast of Canada, they have limited presence elsewhere.

Thats all changing today.

The company has leveraged enormous growth in 2020 sales are up 226% so far in 2020, including 395% revenue growth last quarter to successfully raise a bunch of capital, which the company has committed to opening up two new production facilities: a 10,000 square foot facility in Vancouver and a 25,000 square foot facility in California.

These new facilities give the company the resources and manufacturing abilities to take what theyve done in Canada, and replicate that success on a bigger level.

If that does happen, tiny VRYYF stock could turn into a multi-bagger.

Last, but not least, on this list of vegan stocks to buy is freshly public Laird Superfood.

In his many years of taking on some of the biggest waves in the world, legendary surfer Laird Hamilton came up with a special, superfood creamer that, when added to his daily coffee, would deliver him sustained and healthy functional energy. That special concoction which includes a mix of coconut, plant-based fats and a mineral-rich, superfood algae called Aquamin has given birth to Lairds own vegan foods company, Laird Superfood.

Laird Superfoods signature product the Original Superfood Creamer has been very well received by the public for its clean label, solid energy-boost and authentic flavor which integrates seamlessly with coffee. Many view it as a refreshing break from the tired, old and often highly processed Nestle creamers that dominate the market.

Thats why Lairds sales have risen 2,200% from 2016 to 2019, and are up another 104% in 2020 alone.

But those sales sit at less than $20 million today, and the creamer market in the U.S. alone measures around $3 billion.

In other words, Lairds hyper-growth narrative is far from over, and over the next several years, this company will sustain 20%-plus revenue growth as the $3 billion creamer market is entirely uprooted by vegan creamers of which, Lairds Superfood Creamer should stand out given its brand, superfood ingredients and affordable price point.

To that extent, LSF stocks looks like a long-term winner.

On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.

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7 Vegan Stocks to Buy Now for the Future of Food - InvestorPlace

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October 16th, 2020 at 11:55 am

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