Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our content.
Investing in vegan stocks
It’s a socially responsible investment in a growing niche, but can it stand the test of time?
Vegan and plant-based companies may be of special interest to the investor looking to add some socially conscious investments to their portfolio. But many of these companies are young, untested and facing an uncertain future.
What are vegan stocks?
Vegan stocks are stocks from companies that market to vegans. Most of these companies are food manufacturers that specialize in vegan-friendly and plant-based products.
The vegan diet excludes meat, dairy products, eggs and all other ingredients derived from animals. Dietary staples include fruits, vegetables, legumes and whole grains. Publicly traded companies that exclude animal products from their offerings may be considered vegan stocks.
Why invest in vegan stocks?
A growing number of companies are qualifying as socially responsible, and more and more people are becoming interested in veganism. A 2018 report published by Statista showed that there are around 850,000 people in Canada who identify as vegan and 2.3 million who identify as vegetarian. Forbes reports that, from 2014 to 2017, the number of vegans in the US grew from 1% to 6%.
The global plant-based meat market — a hearty component of many vegan diets — was worth USD $12.1 billion in 2019 and is forecasted to reach USD $74.2 billion by 2027, according to a report from Meticulous Research.
In a 2018 market research survey, around 53% of Canadians said they eat meat alternatives with 18% claiming to eat meat alternatives several times a week. And with the Plant Based Food Association reporting that 29% of Americans now identify as flexitarians — shoppers aiming to cut back on animal-based food products — the plant-based food market is well-positioned to grow at a healthy rate.
Vegan stocks attract investors who want to back the companies and causes they truly care about. Whether you’re a vegan, vegetarian, flexitarian or simply want to support companies that refrain from selling animal products, vegan stocks are one way to introduce socially responsible investments into your portfolio.
What unique risks do vegan companies face?
The risks facing vegan stocks are the same risks that face many new, rapidly evolving industries: instability.
This portion of the global food market is still small, to say the least. And while it’s definitely growing, it hasn’t proven itself long term. Many companies that specialize in vegan and plant-based products are startups.
And startups are an inherently risky investment. There’s no guarantee these newer companies will stand the test of time, especially considering how the coronavirus pandemic has affected the way we dine.
Beyond Meat — one of the biggest players in plant-based meat — sells half its products to restaurants. And a number of its competitors are in the same boat. In light of the pandemic, restaurants simply aren’t seeing the same numbers of patrons, even considering the shift toward takeout, pickup and delivery options.
There’s no telling how the pandemic will affect the restaurant industry long-term. And with such a large cut of plant-based company sales going to restaurants, these companies will undoubtedly be affected.
Veganism has begun to take root in American dietary trends, but these companies may be too new for the experienced investor to gamble on.
If you’re ready to add some socially conscious stocks to your portfolio, you have a few options. Some companies in this list (like Beyond Meat) only produce vegan products. Others companies lean heavily towards vegan products but may also produce some non-vegan products (like Tofutti, which uses egg whites in its Mintz’s Blintzes crepes). Research companies carefully before buying any stocks to make sure you’re comfortable with your investments.
To purchase international stocks, you’ll need to open an international stock trading account.
- Else Nutrition Holdings Inc. (TSXV: BABY)
- Burcon NutraScience Corporation (TSX: BU)
- Beyond Meat, Inc. (NasdaqGS: BYND)
- Nabati Foods Global Inc. (filed a prospectus on March 23, 2021, plans to go public on the CSE although the exact date of the IPO is unknown)
- Otsuka Holdings Co., Ltd. (owns Daiya foods) (OTC Markets: OTSKF)
- Tofutti Brands, Inc. (OTC Markets: TOFB)
- Tattooed Chef, Inc. (NasdaqCM: TTCF)
- United Natural Foods, Inc. (NYSE: UNFI)
What ETFs track vegan companies?
Investors looking for a vegan-focused ETF may be pleasantly surprised to discover the U.S. Vegan Climate ETF (NYSEArca: VEGN): the first publicly traded fund to focus on vegan investments.
The U.S. Vegan Climate ETF holds over $53 million in assets and has an expense ratio of 0.60%. It’s a socially responsible fund that primarily filters out companies involved in animal products, testing, farming and animals used for sports or entertainment purposes. But the fund also exempts companies that:
- Extract, refine or produce fossil fuels
- Consume fossil fuels for energy
- Have a significant carbon footprint
- Have a history of environmental habitat destruction
- Produce tobacco
- Produce armaments and products designed for military or defense use
- Have a history of human rights abuses
As of May 2021, the US Vegan Climate ETF (NYSEArca: VEGN) held 284 companies, including Apple, Microsoft, Tesla and UnitedHealth Group Incorporated.
Compare trading platforms
Before you can invest, you’ll need a brokerage account. Explore your platform options below.
For those ready to add some plant-based investments to their portfolio, vegan stocks represent an investment opportunity on the rise and gaining momentum. But most companies in this industry have plenty more ground to cover before they can be considered a stable investment.
Review your platform options across multiple providers to find the brokerage account that meets your needs.
Frequently asked questions
Are Beyond Meat products vegan?
Yes, Beyond Meat products are 100% vegan-friendly. Check out our guide to investing in Beyond Meat if you’re interested in backing this company.
How can something be considered a vegan stock even if they sell animal products?
Vegan pure plays — companies that exclusively offer vegan products — are rare. In fact, most of the U.S. Vegan Climate ETF’s top 10 holdings are tech companies that don’t offer vegan products: like Intel, AT&T and Microsoft. A stock can be considered a vegan stock if it offers vegan or plant-based products or if it offers products that don’t exploit animals.
But be careful: Some companies considered to be a vegan investment offering plant-based foods may also manufacture meat products. If you follow strict ethical investment guidelines, carefully research companies’ products and processes before buying any stocks.
What is veganism and how does it work?
Veganism is a lifestyle characterized by the exclusion of animal products from material purchases and food consumption. Veganism aims to limit animal cruelty and the environmental impact of animal exploitation.
More on investing
Learn how to strategically find and invest in booming companies.Read more…
The stop-loss order can help you avoid big losses on your currency holdings.Read more…
Looking to buy into big data companies? Check out this list of stocks.Read more…
Looking to buy into the bus transportation industry? Check out this list of stocks.Read more…
Looking to buy into the asset management industry? Check out this list of stocks.Read more…
Looking to buy into the assisted living industry? Check out this list of stocks.Read more…
More guides on Finder
Investing in your 40s: 8 ways to prepare for retirement
How to invest for retirement: 8 ways to safeguard your portfolio.
How to invest $1 million
Here are the top 5 ways you should invest $1 million.
Investing strategy: How growth stocks can make you money
Learn how to strategically find and invest in booming companies.
6 places to find investment advice
Tips for beginning investors and high net-worth individuals alike.
Investing in healthcare AI stocks
Looking to buy into the healthcare AI industry? Check out these stocks and ETFs, and learn more about how to invest.
Investing in materials stocks
Explore the benefits and risks of investing in raw materials.
How to invest in the trendiest tech of CES 2021
From air taxis to smart glasses, here’s how to back some of the hottest CES tech.
What should you invest in during a recession?
Find out which investments are likely to continue to perform while there’s a recession.
Find out how mutual funds work
Get exposure to a wide variety of securities and benefit from professional management expertise with this common investment vehicle.
The effects of controversies on stock prices
How can a single event affect the value of a company? Our graphs reveal the impact.
Ask an Expert
You must be logged in to post a comment.