ESG Investing

Meatless Meat Sees Protein Alternatives Flexing Their Financial Muscle


Americans may love their Whoppers and Big Macs, but their attention is increasingly turning to protein alternatives—also known as meatless meat. In an August survey by Piplsay, more than half of those polled had tried a meatless meat or burger option at a fast-food chain. Critically, the vast majority enjoyed the experience.

A wide range of well-documented health, environmental, and ethical benefits have encouraged interest among meat eaters and food producers alike in developing tastier meatless alternatives. Investors are picking up on the trend: both Jeff Bezos and Bill Gates have invested millions in the alternative meat market. Amid this explosive growth, the alternative meat industry is ripe for ESG investors to make an impact.

Embracing a Mushrooming Meat Market

Alternatives to traditional meat products have meat eaters in mind—the food is meant to imitate the texture and taste of the real thing. However, they also boast greater health benefits and a lower environmental impact. Already growing now, the alternative meat market is forecasted to explode. Sales are projected to increase from $4.2 billion in 2020 to $74 billion in the next 10 years and could reach as high as $118 billion by 2030.

Industry trailblazers Beyond Meat and Impossible Burger pioneered the market with their plant-based chicken and burger alternatives. Since then, a bevy of other startups has capitalized on their success. Chicago-based Nature’s Fynd plans to introduce faux breakfast patties made mainly from fungus later this year, with burgers and faux chicken nuggets to follow. Meati Foods, a Boulder-based startup that was germinated in a US Department of Energy entrepreneurship program in 2019, just started the production of its mushroom-based alternatives to chicken, steak, and jerky. Launched in Sydney, Australia, in 2019, Fable Food is preparing to introduce its mushroom-based meat alternatives in the United States by the end of the year. Other startups are working on creating alternative meat foods entirely in a lab. For example, Upside Foods is growing chicken and beef from stem cells.

These companies’ efforts have attracted the attention of A-list investors—Nature’s Fynd raised $158 million from such stars as Jeff Bezos, Bill Gates, and Al Gore—as well as mainstream corporations. Fast-food franchisors including Burger King and Wendy’s have already begun including protein alternatives on the menu. Heavy-hitter food goliaths like Tyson, Smithfield, and Perdue are meanwhile introducing their own faux meat products.

Already growing now, the alternative meat market is forecasted to explode.

Addressing Potential Roadblocks

For all their progress, these startups still face substantial challenges before their products can enter the mainstream. For one thing, there is the matter of price: faux burgers sell for twice the cost of regular beef. The cost stems from a variety of factors, including supply chain issues and the cost of both ingredients and production.

Big beef companies already have significant production capacity and economies of scale, allowing them to sell their protein alternatives at a significantly lower cost. Yet some experts claim that this infrastructure lacks the pricier environmental and labor practices that newcomers use, branding certain meat alternatives as a form of greenwashing that camouflages the meat industry’s real environmental impact.

Navigating Private vs. Public Markets

For ESG investors, most alternative meat investments are in private markets. One new opportunity in the public markets is the VEGN ETF. It tracks the Beyond Investing US Vegan Climate index, which screens large-cap companies for factors such as animal harm and exploitation. Although it owns shares of Beyond Meat, which went public in 2019, 20% of its portfolio includes the stocks of big tech companies. “There aren’t that many publicly traded vegan companies out there where you can actually make up an index,” said Tom Lydon, president of Global Trends Investments.

As the industry continues its expansion, the stage is set to introduce increasing opportunities for investors to impact the trajectory of the meatless meat market.

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