The growth in veganism, be it a trend or a more fundamental shift in our eating habits, has proved itself a tidy earner for several food firms, with others hoping to replicate their success with their own animal-free ranges.
One of the more prominent companies riding the vegan wave (as I struggle to avoid the oft-repeated ‘on a roll’ pun) is FTSE 250 bakery chain Greggs PLC (LON:GRG), which on Tuesday upgraded its profit guidance for the fourth time in five months and saw its share price shoot to an all-time high.
READ: Greggs hits all-time high after fourth profit upgrade in five months
Since announcing the launch of its vegan sausage roll in January, which earned an additional publicity boost thanks to a Twitter outburst by Piers Morgan, the company has enjoyed a surge in customers that have outpaced many of its high-street brethren, with total sales in the first 19 weeks of 2019 jumping 15.1%.
Nobody was waiting for a vegan bloody sausage, you PC-ravaged clowns. https://t.co/QEiqG9qx2G
— Piers Morgan (@piersmorgan) January 2, 2019
Investors have also been feasting on the stock, which has soared 60% since the start of the year, while existing shareholders are anxiously awaiting a special dividend at the firm’s next set of interim results in November.
With the sales and cash ‘rolling’ in, others are hungrily eyeing their own opportunity to take a slice of the growing vegan market.
On Wednesday, the maker of Bisto gravy and OXO stock cubes Premier Foods PLC (LON:PFD) announced it was making its own move into vegan alternatives with plans to launch a new “Plantastic” range of plant-based products in response to their rising popularity.
READ: Premier Foods expects slower first half after Mr Kipling sales boost 2019 profit
Even supermarket giant Tesco PLC (LON:TSCO) is jumping on the bandwagon after launching its own vegan sausage roll in April.
While Gregg’s performance isn’t entirely down to its meat-free sossie roll (it is also reaping the benefits of investment in its other product ranges), the move into the vegan market appears to be have been perfectly timed.
Vegetarianism, the practice of not eating meat, has been around for millennia, however veganism, the avoidance of all meat and animal-based products such as eggs and dairy, has been enjoying a surge in popularity in recent years as more and more people forgo animal products amid concerns over health and the impact of livestock farming on the environment.
According to The Vegan Society, the UK had around 600,000 vegans in 2018, 1.16% of the population, and launched more vegan products than any other country.
This upswing in dietary changes has also fuelled the rise of sectors specialising in animal-free products, with the global meat substitute market alone estimated to grow to over US$6.4bn by 2023 from around US$4.6bn in 2018.
Cash cow(?)
The rising tide of veganism hasn’t escaped investors, who are currently pouring their money into companies developing meat substitutes and other animal-free products.
On 2 May, shares in Beyond Meat Inc (NASDAQ:BYND), a US maker of plant-based meat substitutes made their debut on the Nasdaq and quickly rocketed above the IPO price of US$25. As of close on 13 May the shares are trading at US$69.5, an increase of nearly 180% in less than a fortnight.
That same week, Impossible Foods, a company that makes vegan substitutes for both meat and dairy products, raised US$300mln in a funding round valuing it at around US$2bn.
Beyond’s products have already found their way to the UK, appearing on the shelves of Tesco supermarkets, while Impossible is also poised to become a big player after a successful trial of its meatless ‘Impossible Burger’ by fast food giant Burger King, which is now exploring ways to bring the product to British customers.
With ‘meat-free momentum’ continuing seemingly unabated, one wonders whether this new generation of food sector ‘cash cows’ may find the term increasingly outdated.