How to invest in the clean meat industry?
by Marc T. Romero Business Consultant, MarketingWritten by
Clean Meat News Australia
In this
article, we will look at a number of ways how investors can gain exposure to
the clean meat industry which is expected to grow over ten fold in the next
half a decade.
In a
previous article, we discussed the massive growth opportunity of the clean meat
industry, which is still in its infant stage. However, identifying an investment
opportunity or a high growth sector won’t get investors anywhere. Rather,
investors should identify and analyze the ways and means to invest in such a
high growth sector.
Are there any listed companies to
invest in?
There are
no publicly traded companies who focus on producing clean meat.
However, a
close analysis of a few publicly traded companies reveals that there are in
fact companies who have invested millions of dollars in the clean meat
industry, and these companies will take-off in value as soon as the clean meat
industry becomes commercialized and mass production hit the markets.
Tyson Foods
is the world’s second largest processor and distributor of meat products, and
the company has made significant investments in the cultured meat space. In
2018, Tyson Foods acquired a minority stake in one of the leading cultured meat
producing companies; Memphis Meats. Memphis Meats successfully produced a
labgrown meatball back in 2016, but one of the significant problems faced by
the company at present is reducing their costs, and this is where Tyson Foods
can come and play a huge role in advising Memphis Meats on how to scale up to
reduce costs.
Memphis
Meats is not the only significant investment Tyson Foods made in the cultured
meat industry. Over the last couple of years, Tyson acquired a meaningful stake
in Beyond Meat which
focuses on producing plant-based meat substitutes. Beyond Meat’s burgers have
already gained traction in the U.S., and is becoming a sensation as the world
shifts to a more planet friendly stance in consuming food.
In 2018,
Tyson Foods announced an
investment in Future Meat Technologies, which is an Israel based biotechnology
company with a focus on producing cultured meat. All these investments
committed by Tyson Foods are ground-breaking investments, and investors should
not take Tyson’s scale lightly. Working with Tyson Foods, these start-up
companies are gaining access to advance technologies and deep pockets, which
should expedite the process of bringing cultured meat to supermarkets.
There’s
virtually no doubt that the cultured meat industry is poised to grow for many
years to come, and when this happens, I believe Tyson Foods will be at the
forefront of the clean meat industry with investments worth well over a billion
dollars in this industry. Investing in Tyson Foods provides investors with
direct exposure to the growing clean meat industry, and I believe this is one
of the best ways to invest in this growing sector.
The company
management of Tyson has repeatedly confirmed their plans to invest more in the
clean meat industry, and this should provide an even greater exposure to
investors who chose to invest in Tyson to gain exposure to the clean meat
industry.
Tyson Foods
is listed on the New York Stock Exchange and currently trades at $69 per share.
Even though
there are no pure-play clean meat stocks to invest in at the moment, there are
a number of listed companies who are working with clean meat processing
companies to develop the relevant technologies required to disrupt the food
processing industry for good.
Understandably,
these companies who are working with clean meat processing companies will gain
substantially from the growth of the cultured meat industry, and investors
should consider adding a stake from these companies to their portfolios to gain
exposure into the growing cultured meat industry.
Company name |
Stock code
and market |
Line of work |
Agilent
Technologies |
A(NYSE) |
Gene
synthesis for acellular cultures andcell lines |
Amyris |
AMRS
(NASDAQ) |
Acellular
cultured flavors |
Archer
Daniels Midland Venture Capital |
ADM (NYSE) |
Develop and commercialize
animal-free proteins |
Bell Food
Group |
BELL (SWX) |
Investments
in clean meat processing companies including Mosa Meat |
Neto Group |
NTO (TLV) |
Investments
in clean meat processing companies including Future Meat Technologies |
These are
some of the listed companies that are working hand-in-hand with clean meat
processing companies to commercialize the industry, and we expect many hightech
companies to partner with clean meat processing companies to drive the industry
forward in the future. Investors should better keep an eye on these companies
and other listed companies that might want to take part in shaping the clean
meat industry. Investing in such companies is the best and only way to gain
exposure to this industry through listed investments.
Private equity investments remain
the most popular way to invest in the clean meat industry
In the
early stages of an industry, it’s common to see that many investments in the
industry are carried out as private equity transactions, and the same goes true
for the clean meat industry as well. The absolute majority of investment
opportunities available in the clean meat industry can be found in the private
equity marketplace.
More often
than not, many investors believe that it takes them a fortune to be a private
equity investor, and that doors to private companies would only be open to high
profile investors. This is often not the case when it comes to emerging
technologies, and in fact most emerging companies welcome investments from all
types of investors subject to regulatory approvals.
Mosa Meat,
one of the disruptive and leading clean meat producing companies in the world
is open for new investments, and the company has made this clear on their
corporate website. Any investor who is interested in investing in Mosa Meat can
directly contact the
company through their website, and this provides investors with the
ability to invest in a growing company at the start-up stage.
The good
thing about investing in Mosa Meat is that it doesn’t take you a fortune to
invest in this high growth company. Mosa Meat categorizes investments into two
segments.
1. Investments
over €10,000 ($18,500 AUD)
2. Investments
below €10,000 ($18,500 AUD)
Apart from
investing directly in a company, investors can opt-in to invest in a portfolio
of clean meat processing companies via venture capital funds. New Crop Capital
is a classic example of such a fund, and the fund opened for investors back in
late 2016. Even though the fund is currently closed for investments, we believe
this venture capital fund will come up with more open-ended funds to focus on
the growing clean meat industry in the near future.
New Crop
Capital’s portfolio includes
stakes in almost all the cultured meat processing companies in the world
including Memphis Meat, Mosa Meat, and many more.
Stray Dog
Capital is another venture capital investment fund that specializes investing
in companies that are bound to make a significant impact to the clean meat
industry and other animal friendly industries such as plant based meat. The portfolio of
investments includes Beyond Meat, Aleph Farms, Geltor, Mosa Meat, and
SuperMeat.
VegInvest
is also a fund that needs to be monitored by investors to identify any
investment opportunity with this fund in the future, as this venture capital
firm focuses on the same theme followed by many other socially responsible
investment funds: investing in industries that will save lives.
Historically,
venture capital investors have been keen on investing in disruptive industries,
and we believe the commercialization of clean meat products will attract many
venture capital investors to this industry. One other important thing that
needs to be understood by investors is that higher venture capital investments
in the current period results in higher publicly listed clean meat processing
companies in the future, as IPOs are one of the primary exit methods of venture
capital investors.
Are there any Exchange Traded Funds
to invest in?
Over the
last decade, the appeal of Exchange Traded Funds (ETFS) has increased
tremendously, and these funds are considered one of the most cost-effective
ways to invest in any sector or market. As such, it’s an important
consideration for investors to check whether there are ETFs with a focus on
cultured meat and alternative meat solutions.
Unfortunately,
there are no ETFs with an exclusive focus on the clean meat industry at the
moment, but investors need to focus on some providers of ETFs who are likely to
introduce a clean meat industry based investment fund in the near future.
The U.S. Vegan
Climate Index managed and marketed by Beyond Advisors focuses on
identifying investment opportunities that are socially responsible.
The
investment objective of this fund is to address the concerns of vegans, animal
lovers, and environmentalists. Even though the fund currently has not invested
in the clean meat industry, we believe investors should keep a close eye on
funds like this as there is every possibility of such a fund investing in the
clean meat industry.
Future investment opportunities
Even though
the number of options available to invest in the clean meat industry is
limited, investors should not lose hope or heart at this point in time. Often,
it takes several years for prominent investment management firms to come up
with mutual funds, ETFs, and other investment vehicles to allow investors to
invest in a developing segment, and this is true for the clean meat industry as
well.
The future
outlook for investors is certainly promising, and we expect many start-ups to
gain traction and trade publicly on various stock exchanges.
For
example, Beyond Meat backed by Tyson Foods has gained traction for many years
with its trademark vegan meat burgers, and the company filed
documents for an Initial Public Offering (IPO) in 2018. When listed,
Beyond Meat would be the first pure-play alternative meat processing company to
ever hit the public markets, and we believe this will provide a massive boost
to the alternative meat processing industry including the cultured meat
industry.
As the
industry grows and matures, we expect billions of dollars to flow into this
industry, and massive investment opportunities will be created for investors.
Investors who identify growth prospects in this industry should go ahead and
make investments at this very early stage, and this will pave the way for such
investors to earn very attractive returns on their investments.
For more
information about this emerging industry please visit the Clean Meat News Australia website.
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Created on Jul 8th 2019 00:23. Viewed 277 times.