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Industry Voice: Sustainable diets – A new theme on the menu for investors?

The shift towards a more sustainable diet continued throughout 2020, illustrated by a ramp up in targets for emissions and food waste from a number of leading players in the food industry.

Consumer interest in clean and sustainable diets continues to focus on a broad range of issues including food waste, air miles, clean labels, meat free, lab grown meat and organic, amongst others.

Veganism is one such diet and lifestyle choice that is increasingly becoming more commonplace, and its rise in popularity was highlighted by the 500,0001 people who signed up to the Veganuary challenge this year – twice the number who pledged to go vegan for January 2019.

Veganism can also tie in with governments’ plans to reduce carbon emissions, with less meat consumption meaning lower emissions at a national level.

However, while it is a growing trend for consumers, investing in it is far from straightforward.

One of the main problems is a lack of pure play companies in the space. For example, there are only a few vegan-only, direct-to-consumer companies entering the market, and mainstream supermarkets are gaining traction in the sector at the point of sale with their own-brand vegan meals.

While supermarkets offer exposure to vegan products, the impact of vegan food sales on supermarkets’ bottom lines is currently so minute that to class them as vegan stocks would be a gross exaggeration. Nonetheless, there are other options.

Sustainable food stocks

Although there are few pure-play vegan names in listed global equity markets, there are other ways to eat more sustainably and many companies are busy making a positive difference to the outlook for not only food stocks, but also the environment.

One such example is DSM, which operates in the food ingredients market. DSM is working to produce alternative food sources for fish farms, which currently rely on a type of protein called fry to feed them.

DSM uses algae instead of fry to provide better nutrient delivery for their stocks of fish, and this is helping to make fish farms more sustainable going forward.

 

 

 

This post was funded by AXA Investment Managers

 

Disclaimer

This document is for informational purposes only and does not constitute investment research or financial analysis relating to transactions in financial instruments as per MIF Directive (2014/65/EU), nor does it constitute on the part of AXA Investment Managers or its affiliated companies an offer to buy or sell any investments, products or services, and should not be considered as solicitation or investment, legal or tax advice, a recommendation for an investment strategy or a personalized recommendation to buy or sell securities. 

It has been established on the basis of data, projections, forecasts, anticipations and hypothesis which are subjective. Its analysis and conclusions are the expression of an opinion, based on available data at a specific date. 
All information in this document is established on data made public by official providers of economic and market statistics. AXA Investment Managers disclaims any and all liability relating to a decision based on or for reliance on this document. All exhibits included in this document, unless stated otherwise, are as of the publication date of this document. 
Furthermore, due to the subjective nature of these opinions and analysis, these data, projections, forecasts, anticipations, hypothesis, etc. are not necessary used or followed by AXA IM’s portfolio management teams or its affiliates, who may act based on their own opinions. Any reproduction of this information, in whole or in part is, unless otherwise authorised by AXA IM, prohibited. 

Risk Warning

The value of investments, and the income from them, can fall as well as rise and investors may not get back the amount originally invested. 

 

 

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