Trends Watch: Vegan Investing

EisnerAmper’s Trends Watch is a weekly entry to our Alternative Investments Intelligence blog, featuring the views and insights of executives from alternative investment firms. If you’re interested in being featured, please contact Elana Margulies-Snyderman.  

This week, Elana talks with Claire Smith, CEO, Beyond Investing.

What is your outlook for vegan investing?

When I talk about vegan investing, I talk about it across a broad spectrum, which is not just about investing in vegan products and/or services, but also about providing access to a continuum of investment adhering to vegan criteria ideally across large-cap to small-cap to start-up and seed investments.

Therefore, one aspect of vegan investment is that we see capital migrating away from companies in the large-cap space whose activities are incompatible with a vegan philosophy and capital moving instead into small- and mid-cap stocks that have alternative solutions. People are actively seeking exposures in plant-based food -- just as they are investing in renewable energy, as an alternative to fossil fuel.  

In addition, vegan investing means realizing that consumers are seeking out more sustainable products. Companies are creating products never seen before, from materials never previously used, and manufacturing more efficiently with fewer inputs and with less waste.

Further down the scale towards venture capital, it is not just transformative but disruptive as well as you move into these companies. We expect these disruptive technologies to create and deliver not only vegan proteins, but also lipids, vitamins, minerals, antioxidants. In a way, this is recomposing and optimizing the food system. Hence, vegan investing a lot more expansive than just putting money into some new type of vegan product.

In what areas, both geographically and demographically, is vegan investing becoming more prominent?

In terms of the plant-based movement, there are certain centers around the world where the trend is most prevalent. In the U.S., not too surprisingly it’s the coastal cities, Chicago, and maybe some places where there are a few more technology firms. In Canada, it is Toronto and there is a strong movement in British Columbia. In Europe, the U.K. is strongly moving forward as well as the Nordics, Holland, Germany and Switzerland. In Asia, it’s in Hong Kong and Singapore, areas where there are a lot of ex-pats; Australia, specifically Melbourne and Sydney; and to some extent New Zealand. These are the places where you see many more new vegan products hitting the shelves.

Meanwhile, in terms of demographics, it is most pertinent amongst millennials. Everywhere in the world, it is the younger generation who are leading this change. The percentages of the people who are going vegan are much higher amongst people under 35-years-old than those over 35 -- and even higher for people sub-25, so people who are teenagers, late teens and early 20s are an even stronger force in this. This is reflecting a number of things, particularly a consciousness around animals. All of these millennials have grown up looking at social media and saw posts about the animal rights movement, and that stuck in people’s minds.

Of course the climate is another big instigation as well and the youth climate movement is really pulling the rest of the political system behind it.

What area of vegan investing is most popular?

This year we see a big trend in the food service sector. Food services are a real catalyst because if you go into a supermarket, you go to the same aisles, the same shelf and pick the things you are used to picking -- whereas you can go into a restaurant, see something on the menu, and just give it a try without making a massive commitment. So people are trying things and because of branding of these products on menus, they are able to find them in the supermarket. The brands that have done this -- such as Beyond Meat and Impossible Foods, for example -- have been able to get a huge global following.

What keeps you up at night?

I just feel a great urgency to roll things out and get funding to these vegan companies. I feel as if I’m a bottleneck in terms of my vegan impact investing in what I can do because of limited time and resources. I know there is interest, I know there is demand; what keeps me up at night is the pressure to scale up my own business in the way that is needed.