vegan

Vegan

From coconut coffee creamers and dairy-free yogurt to veggie burgers, the market for plant-based, natural foods and beverages are outpacing total food and beverage sales overall. 

According to SPINS’ 2019 State of the Natural Industry, the market for natural food and beverage products is growing at 5.0% compared to that of total food and beverages growing at 1.7% year-over-year.

While the growth is astounding, it’s not necessarily surprising. 

If you’ve been to the grocery store recently, you know that plant-based products are no longer limited to one aisle and aren’t marketed to just one specific type of consumer. Plant-based products are everywhere and stores are asking all shoppers to try them. 

In other words, you don’t have to be a strict vegan to buy the latest brand of oat milk or plant butter.  

And, more and more consumers are trying the plant-based versions of more traditional products, knowingly or unknowingly adopting a flexible vegetarian status known “flexitarian.”

The term flexitarian was coined in 2009 by registered dietitian Dawn Jackson Blatner who promoted eating more plants and less meat overall, or rather, being vegetarian most of the time. The diet is geared to promote overall health while not totally depriving followers of animal-based products.  

Because of the lax guidelines that allow for mostly eating more veggies that the diet promotes, consumers are increasingly adopting it in one form or another—and eating more vegan products than ever.  

Consider the success story of Beyond Meat, the plant-based burger company whose stocks skyrocketed after going public in May 2019, up 213% by November. According to UBS investment, Beyond Meat’s sales could reach $1.8 billion by 2025.

Who is buying Beyond Meat’s plant-based burgers? It’s not just vegans, but meat eaters, too. 

As the number of vegans (including those with part-time buy-in) is on the rise, so is the unprecedented demand for plant-based products in grocery stores, restaurants, and beyond.

What is Veganism?

Vegetarian diets typically eliminate meat and fish but allow for the consumption of eggs and dairy. Veganism is much more restrictive, eliminating all items of animal origin, including any food made with animal flesh, dairy products, eggs, or honey. The authentic Vegan lifestyle goes further, extending beyond food consumption to everything from textiles to clothing and cosmetics.

Generally, veganism offers three primary features: (1) additional curtailment of animal mistreatment and slaughter, (2) reduction of certain health risks, and (3) decrease of environmental footprint. 

That’s right, it’s good for the environment. 

Beyond being healthy for our bodies, veganism is promoted as a tool to combat climate change. Raising meat requires a massive use of grain and water. After slaughter, farmed animals are processed, transported, and stored, requiring the consumption of even more energy. Plant-based options tend to be more environmentally friendly. 

The number of people choosing to live a vegan lifestyle worldwide is on the rise.  In the United States, the demographic has grown by 600 percent between 2014 and 2018, from 4 million to 20 million people. The vegan population in the UK similarly quadrupled between 2014 and 2018.

This growth of veganism in conjunction with non- or sometimes-vegan consumers who buy plant-based foods for health and environmental reasons means a fast-growing market and more investment opportunities than ever. 

Why Invest in Veganism?

Vegan products are a $7.1 billion market, growing at a rate of 10.1%. The plant-based meat market alone is anticipated to be valued at $27.9 billion by 2025 globally. 

The market for other plant-based dairy alternatives, like cheese and milk, are also growing at unprecedented rates. Milk alternatives include soy milk, almond milk, rice milk, oat milk, coconut milk, and flaxseed milk. According to a recent study, the global dairy alternatives market is expected to grow, reaching $26.86 billion by 2023. 

Alternatives to traditional butter exist as well. The US plant-based butter industry is valued at $198 million and growing. Between 2017 and 2019, sales of plant-based butter increased 15%, growing faster than the sales of traditional butter.

And these trends are going mainstream. In addition to niche plant-based butter brands like Milkadamia and Miyoko, Country Crock debuted its “Plant Butter” made with olive oil, avocado oil, and almond oil in September 2019. Non-dairy yogurts made with almonds, cashews, or coconut are also on the rise. 

This phenomenon isn’t just on grocery store shelves, but in restaurants, too. White Castle offers the Impossible Sliders, Burger King offers the Impossible Whopper, and Carl’s Jr.’s offers the charbroiled Beyond Famous Star. 

And, Wall Street is taking notice the sales of plant-based products. Beyond Investing introduced the US Vegan Climate ETF, listed on the New York Stock Exchange under the ticker VEGN, in fall 2019. The ETF excludes oil-related stocks as well as meat-centric companies. 

Vegans are passionate about the environment and their health. And, no matter what degree of vegan one is, they are willing to pay the cash for the burger that’s just as good or maybe even better than the meat alternative. 

In other words, plant-based products are here to stay, and varieties and consumer buy-in are sure to grow.

How to Invest in Veganism

But getting involved in a market segment as large and diverse as veganism — which impacts everything from food & beverage, to personal care, clothing and more — isn’t as straightforward as it sounds. But, by investing in mutual funds and ETFs that offer exposure to veganism as a whole, investors can spread their impact out to all of the companies that are working in this sector. A search on Magnifi suggests there are a number of ways for investors to get involved in veganism this way.

Magnifi is changing the way we shop for investments, with the world’s first semantic search engine for finance that helps users discover, compare and buy investment products such as ETFs, mutual funds and stocks. Try it for yourself today. 

This blog is sponsored by Magnifi. The information and data are as of the publish date unless otherwise noted and subject to change. This material is provided for informational purposes only and should not be construed as individualized investment advice or an offer or solicitation to buy or sell securities tailored to your needs. This information covers investment and market activity, industry or sector trends, or other broad-based economic or market conditions and should not be construed as investment research or advice. Investors are urged to consult with their financial advisors before buying or selling any securities. Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. Past performance is no guarantee of future results. This content may not be reproduced or distributed to any person in whole or in part without the prior written consent of Magnifi. [As a technology company, Magnifi provides access to tools and will be compensated for providing such access. Magnifi does not provide broker-dealer, custodian, investment advice or related investment services.]


Gap Inc

Gap (GPS)

A mainstay of malls and shopping centers across the U.S. in the 1990s, Gap Inc. (GPS) is today a clothing and accessories retailer with operations around the world. Founded as a jeans shop in San Francisco in 1969, Gap today sells a wide variety of products for men, women and children, including sportswear, activewear, and more.

The company’s six primary divisions include retail outlets The Gap, upscale store Banana Republic, discount retailer Old Navy, fitness wear brand Athleta, curated fashion site Intermix, and Hill City, a maker of performance menswear. 

As of 2018, Gap’s revenue was $16.6 billion and it was the largest specialty retailer in the U.S. It currently operates more than 3,700 stores worldwide, more than 60% of which are in North America.

Rationale

The most direct way to gain exposure to Gap is to buy its listed shares, of course, but its participation in the extremely competitive retail and fashion markets might make many reconsider that approach. Companies like GPS have to stay ahead of the constantly shifting trends in fashion in order to remain competitive in the marketplace. What’s more, Gap’s reliance on mall and shopping center locations puts it at risk as consumer choice moves away from brick and mortar shopping to more online purchases.

However, for investors interested in gaining exposure to the retail and consumer spending sector, rather than buying GPS shares themselves should consider buying funds that provide exposure to Gap and other similar firms. After all, the return drivers that will benefit GPS might also benefit other similar tech firms. As investment management is gradually moving to the construction of portfolios using ETFs and mutual funds in addition to single stocks, investors would do well to consider gain exposure to firms like Gap through these types of funds.

Investing in GPS

A search on Magnifi suggests that investors can gain access to GPS via a number of different funds and ETFs, including those shown below. 

Magnifi is changing the way we shop for investments, with the world’s first semantic search engine for finance that helps users discover, compare and buy investment products such as ETFs, mutual funds and stocks. Try it for yourself today.

This blog is sponsored by Magnifi. The information and data are as of the publish date unless otherwise noted and subject to change. This material is provided for informational purposes only and should not be construed as individualized investment advice or an offer or solicitation to buy or sell securities tailored to your needs. This information covers investment and market activity, industry or sector trends, or other broad-based economic or market conditions and should not be construed as investment research or advice. Investors are urged to consult with their financial advisors before buying or selling any securities. Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. Past performance is no guarantee of future results. This content may not be reproduced or distributed to any person in whole or in part without the prior written consent of Magnifi. [As a technology company, Magnifi provides access to tools and will be compensated for providing such access. Magnifi does not provide broker-dealer, custodian, investment advice or related investment services.]      

 

 

 


Lululemon (LULU)

Who knew that selling yoga pants could be so lucrative? Chip Wilson, the founder of Canadian athleticwear retailer Lululemon Athleta (LULU) certainly did when he started the company out of his Vancouver apartment in 1998. In part, LULU arrived at just the right time. In the early 2000s, yoga was on an upswing, and between 2012 and 2016 the number of Americans doing yoga grew by 50%. Today, 1/3 of all Americans has tried it at least one, and the population of over-50 practitioners has tripled since 2015.

Lululemon designs and sells a wide variety of athletic wear, having expanded beyond its core product of yoga pants. Today the inventory in its 460 stores includes tops, casual pants, shorts, sweaters, jackets, undergarments, accessories, yoga mats, water bottles, shoes and more.

In 2018, Lululemon reported revenue of $3.29 billion, up from just $358 million a decade earlier.

Rationale 

A direct way to gain exposure to Lululemon is to buy the listed shares. But that can be a risky approach, given LULU’s focus on the consumer market. It’s fair to believe that Chip Wilson caught lightning in a bottle with the explosive growth of the yoga market shortly after he launched the company, but Lululemon’s breakneck growth since then has largely been predicated on new store openings and reaching out to new potential customers. However, fashion trends can change rapidly, and the population of customers who have not yet tried yoga or purchased from Lululemon is shrinking, reducing its future growth potential.

A solution that can dampen some of that volatility is to buy funds that provide exposure to Lululemon and other similar firms, rather than LULU shares themselves. After all, the return drivers that will benefit Lululemon might also benefit other similar firms in sporting goods, athleticwear, and footwear. As investment management is gradually moving to the construction of portfolios using ETFs and mutual funds in addition to single stocks, investors would do well to consider gain exposure to firms like LULU through these types of funds.

Investing in LULU

A search on Magnifi suggests that investors can gain access to LULU via a number of different funds and ETFs, including those shown below. 

Magnifi is changing the way we shop for investments, with the world’s first semantic search engine for finance that helps users discover, compare and buy investment products such as ETFs, mutual funds and stocks. Try it for yourself today.

This blog is sponsored by Magnifi. The information and data are as of the publish date unless otherwise noted and subject to change. This material is provided for informational purposes only and should not be construed as individualized investment advice or an offer or solicitation to buy or sell securities tailored to your needs. This information covers investment and market activity, industry or sector trends, or other broad-based economic or market conditions and should not be construed as investment research or advice. Investors are urged to consult with their financial advisors before buying or selling any securities. Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. Past performance is no guarantee of future results. This content may not be reproduced or distributed to any person in whole or in part without the prior written consent of Magnifi. [As a technology company, Magnifi provides access to tools and will be compensated for providing such access. Magnifi does not provide broker-dealer, custodian, investment advice or related investment services.]