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Investment Trends: Will Huge Growth In Plant Based Food Boost Penny Stocks?

Penny Stocks
  • Major institutions and investors have tapped the plant based food industry, boosting the trend expectations
  • PlantX (PLTXF:OTC US) SEO analysis reveals strong exposure to a number of top plant food brands
  • Industry predicted to grow 30X between 2019 and 2027

The demand for plant-based foods is set to drive enormous growth over the next 10 years. According to numerous reports, it is growing rapidly: the plant-based market size is predicted to top $162 billion worldwide by as soon as 2027.

It may well be that some of the best penny stocks to buy would be companies in the plant based food industry that were overlooked by early moving institutional investors – and that the maturity of these stocks, if running in tandem with the market, might be reached between 2023 and 2025.

Trend entering a critical growth phase?

If you’re unsure how mainstream plant-based food or alternative meat products are, look no further than Leonardo DiCaprio investing in sustainable food tech – and Bill Gates, a firm believer in plant based food, who is buying up farmland rapidly in the U.S.

This unprecedented switch towards consuming more plant-based foods has opened up value in stocks that are right for the picking and several plant based stocks that are seen as penny stocks right now may rise substantially if these companies are managed well and the trend materializes.

The conscious decision made by billions of humans to eat more fruits and vegetables and less meat has been steered by major influencers such as the World Economic Forum (WEF), governments and hedge funds. The shift to reduce livestock farming in favor of growing more fruits and vegetables in certain countries is driven largely by incentivizing farmers to make a radical switch into what the ‘crop’ of the present and future will be.

As the effects of climate change became more tangible, it’s interesting to note how environmental, social and governance (ESG) investing has moved over towards likely profitable investments and not only to appease investors’ moral compasses.

Is PlantX Ahead Of The Curve?

Entrepreneur Sean Dollinger is a player in the plant-based arena that has intimate knowledge of whether the shift to alternate proteins is a fad or the real deal. Dollinger is the founder of PlantX (PLTXF:OTC US), an online marketplace for consumers looking for alternatives to animal-based products. Recently, a well known banker, Luigi Wewege made reference to the strategic advantages of PlantX. This led me to dig into their ecommerce strategy some more.

How PlantX tapped into the growth of top brands and 5000+ products:

The genius of what Dollinger has done shows up in a bit of research on his SEO. You see, investors put money into new brands, boost their demand through advertising – and then search demand on the web increases for new brands. Some food brands are growing at an astronomical pace and Dollinger made sure that PlantX gets a piece of the action from all those brands as well as their category keywords:

Dollinger sports over 20 years experience in the ecommerce space, and argues that the trend has been in the making for a long time. He seems to have turned PlantX into the equivalent of a plant based ETF: giving exposure to top plant based food brands, as well as top channels – since PlantX is targeting both Google Search (through owned sites), along with marketplaces like Amazon and Walmart.

In her own words, Alex Hoffman the CMO of PlantX said: “We provide value both in terms of ranking for generic product terms and branded terms. That will create a compounded effect which will grow our community substantially. We are finally there with our website and the onboarding of 5000+ products – which is really exciting.”

In other words, when the top 25 brands reach their potential and quadruple in search demand, the PlantX website will already be there, ready to start a new relationship with consumers who will become part of their customer experience.

Strategic Brilliance In The Plant Based Food Market?

If you consider that Tesla did not have other revenue streams until it could sell it’s own cars – which is hard work and high risk. On the other hand, players like PlantX and Amazon are different: They are market places that firstly ride on the popularity of other brands and then build their owned brands. PlantX, for example, keeps acquiring new owned brands where it has a higher margin – all of this on top of selling other brands that are popular.

Numerous other stocks exist in this space, for example Else Nutrition (BABYF), Maple Leaf Foods Inc. (MLFNF), Beyond Meat ( NASDAQ:BYND ) and Tattooed Chef Inc (NASDAQ: TTCF). Some have already started to go mainstream and have seen their first corrections. The irony is all of the aforementioned products – can be purchased on the PlantX website, giving the investor an element of ETF style exposure.

Five Factors Driving the Unprecedented Growth in the Plant-based Food Market

1. Hangover from the pandemic on global meat market 

It became apparent during the global pandemic that farming traditional livestock methods were unsustainable according to research. This resulted in the price of beef skyrocketing, even overtaking inflation to force consumers to find an alternative to traditional protein sources. 

2. Russia’s invasion of Ukraine and the effect on exports

The world was caught off guard by the impact Russia’s invasion of Ukraine had on feeding livestock. Both countries export grain to different markets, and Ukraine’s agreement with Spain to supply pig feed was severely restricted. Experts say the only way to mitigate the reliance on animal feed from Russia and Ukraine is to shift towards plant-based foods. It’s simply unsustainable for consumers to pay exorbitant prices for meat due to suppliers not able to meet the demand. 

3. Pro plant-based messaging and rhetoric from Influential players

It’s clear that the world’s reliance on animal-based food was hit to the core by several factors that are largely out of their control. Institutions like the WEF and influential hedge funds are duty bound to calm fears and putting their voices behind a change to more plant-based items can certainly be seen as an economic factor, but the health and sustainability benefits are difficult to ignore.   

4. More investors and brands are trying to stay ahead of the trend 

The spotlight on plant-based companies such as Beyond Meat, PlantX and Tattooed Chef has seen injections of investment for these plant-based food companies to scale their operations. It remains to be seen which of the players may offer shareholders value and growth.

Companies like PlantX, which offers door-to-door delivery is an interesting case study as they have captured a market ahead of traditional large ecommerce retailers like Amazon. What’s interesting is that the customer base will stay loyal and support the early disruptors who have experienced seamless transactions with them for a number of years. 

5. Big institutional investors are driving the trend with a lot of money

Plant-based companies simply won’t replace traditional meat producers, but the data and growth timeline suggests this is merely not a fad. Besides plant-based diets being healthier, farming and buying meat is likely to continue to be affected by macro economic factors that saw its price increase dramatically.

Several hedge funds, such as the Massachusetts Financial Services, Wellington Management Co. LLP and Goldman Sachs, Baillie Gifford & Co and Massachusetts Financial Services have invested in various plant-based companies.

Final Take

On your way to researching the best stocks for 2023 to 2025 some interesting trends may arise. Many would argue that right now, the plant-based food industry may be ripe for the picking. This assumes the companies you choose to invest in, are managed well and the trend continues in the same vein it has in the past five years. It’s vital to provide a textured narrative, to color in between the lines and focus on the trends of plant-based investing.

One might consider the traditional heavyweights of meat producers who invested heavily in plant-based protein as a growth strategy for their businesses. That’s a great indication of how the traditional players in the space dominated by meat-protein producers see the investment potential of plant-based foods. There’s almost a perfect storm for this sector to have every reason to continue to grow and expand to colossal proportions. Some penny stocks may crash and die, some may reach their full potential and produce astronomical wealth – hopefully you will be part of the latter camp. Stay cool headed and do your research.

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