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plant-based food is making a killing

The market is becoming increasingly crowded as consumers are concerned about the health and environmental impact of their diets

AB’s () stellar debut last week was a sign that the plant-based trend is much more than a fad, although experts say it will be another few decades before it takes over animal-derived products.

Nonetheless, more and more companies are joining this crowded market, which is becoming increasingly competitive and more attractive for investors. There’s even a dedicated cruelty-free fund, US Vegan Climate ETF (NYSE:VEGN).

READ: Oatly soars on first day of listing

Brands are tapping into the new opportunity as nearly half of the world’s consumers are cutting their intake of animal-based products without following a strict vegan diet, according to Euromonitor.

Big household names have been relatively fast in joining the trend, with Nestlé launching its pea-based drink Wunda earlier this month.

Paris-listed owns the Alpro range, while Chobani, which makes yoghurt and oat-based milk, is planning to join the stock market later this year, with the Wall Street Journal reporting a mooted US$7-10bn IPO.

There’s also a plethora of smaller ventures, such as Sproud, which makes milk from yellow split peas, Califia Farms, which has oat and almond drinks, and vegan ice cream maker Booja Booja.

() has made vegan versions of its Magnum, Ben & Jerry’s and Swedish Glace ice cream and is also selling Hellmann’s vegan mayonnaise and meat alternatives through The Vegetarian Butcher, including vegan chicken nuggets with Burger King.

Remaining in London, Agronomics Limited () invests in businesses focused on cultivated meat and alternative proteins while Hilton Food Group plc () holds a 50% stake in Dalco Food, a Dutch company focusing on vegan and vegetarian meat substitutes.

Other big players in the faux meat space are burger producers Impossible Foods and (), as well as protein maker ().

According to analysts at Barclays, there are three main reasons why consumers are changing their taste: concerns over animal welfare, sustainability and health and wellness.

Over the next year or so, the bank reckons that companies will have increasing potential to promote healthy products as COVID-19 speeds up wellness trends.

People are also becoming more interested in learning the ‘behind the scenes’ of ingredients, supply chain and nutrients to understand if what they are eating is healthy for them and the environment – for instance, cattle emit methane at high levels and they are considered heavy polluters.

In all this, taste and price must remain relevant so companies should provide healthy and guilt-free choices that can be afforded even in times of economic crisis.

“The perception of naturalness is also a relevant decision factor for consumers,” Barclays commented.

“While alternative meats are generally looking to create profitable and sustainable food options to solve the long-term problem of food availability and environmental challenges that lie ahead, it is crucial that they do so while answering to what consumers today are demanding to satisfy their cravings and nutritional needs in the short term.”

The faux meat market is expected to rocket to US$140bn over the next ten years, as producers capture 10% of the US$1.4 trillion global industry, Barclays said.

The plant-based meat and dairy market is expected to be worth €7.5bn in Europe alone by 2025, according to ING Economics, compared to €4.4bn in 2019.

The economists said that the price, taste and availability are not yet on par with animal-derived products, but with the current level of investment and innovation in the food industry and the supply chain we’ll get there in the next four years.

“Plant-based alternatives draw a lot of attention, but the hard numbers show that the dominant role of meat and dairy in European diets is far from over, despite the momentum behind various plant-based market…

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