Whole Foods and Costco under fire
A report entitled ‘Plant-based profits’, backed by a coalition of 57 large investors that manage 2.4 trillion USD, has urged global food companies and retailers to diversify their offerings to include plant-based proteins, a market expected to be worth 5.2bn USD within two years. The coalition was coordinated by the Farm Animal Investment Risk and Return (FAIRR) initiative, which was founded by private equity veteran Jeremy Coller, who is a vegetarian and animal welfare advocate.
FAIRR’s analysis of 16 multinational companies found that Costco and Whole Foods were failing to give investors enough information on the topic. Despite having made strides in providing meat replacement products, Whole Foods was the only multinational company contacted by investors that did not respond at all, while Costco, which has a large footprint from its meat sales, was singled out by investors for “failing to recognize protein diversification as a material issue”.
Rosie Wardle, of FAIRR, said that “business as usual is not an option” when it comes to the meat and meat product industry, as intensive livestock production comes under pressure to address concerns about its impact on the environment, animal welfare, antibiotic use and the impact of farming on local communities. Whole Foods and Costco did not respond to requests for comment.
Investors are not only concerned about the risks of food companies relying on animal proteins but they also want to know how firms are capitalising on demand for alternative proteins. Health concerns are also leading many consumers to demand alternatives to animal proteins, as more people opt for “flexitarian” diets, where they mostly eat plant-based foods and occasionally eat meat.
In the US, 39pc of Americans are actively trying to incorporate more plant-based foods into their diets, and millennials are driving this shift, with 30pc eating meat alternatives every day, while 50pc eat meat alternatives a few times a week, the report said. In the UK roughly 2pc of the population, or 1.2 million people, are vegetarian, while vegans make up less than 1pc of the population, according to the Government’s National Diet and Nutrition Survey.
Start ups offering meat alternatives have been gaining traction with venture capital and mainstream investors. Impossible Foods is the most highly funded and has raised at least $258m since it was founded in 2013 from investors including Singapore's sovereign wealth fund Temasek. Food producers Tyson Foods and Cargill have also backed fundraising rounds for other alternative protein companies.
Source: The Telegraph