Studies show that responsible investing is becoming more and more important to people. The good news is that there are plenty of so-called green stocks for people to choose to invest in. And the number continues to grow. Right now UK and US share pickers can get exposure to renewable energy, the recycling industry, electric car manufacturing… The list is huge.
At the moment there are few options for those seeking green stocks that operate in the lab-grown meat sector. However, I think US share Tyson Foods (NYSE: TSN) could be a good way to get exposure to this fast-growing food segment. The food giant is one of several blue chips and venture capital funds that have invested in cultured meat manufacturer Future Meat Technologies.
This cutting-edge food producer just raised $26.8m, in fact, to boost production and accelerate research and development. Investment in the world of lab-produced meat is heating up as the size of its potential customer base becomes more apparent. A recent report by scientific journal Foods suggested that 80% of US and UK citizens would be tempted to try vat-grown meat (half of which said that they were “highly likely” to try it). The upside for Tyson Foods could therefore be huge.
Rewards vs risk
The popularity of vegetarian and vegan diets is soaring for various reasons. Aside from issues surrounding animal welfare, concerns over the quantity of greenhouse gases that livestock herds emit is also turning people off meat. As well, worries over how much water and land that pastoral farming requires compared with what arable farming needs is also causing people to seek more nature-friendly alternatives.
It’s worth remembering that the lab-grown meat industry is still in its infancy. Thus it’s too early to claim that Future Meat Technologies could be on the road to riches. As for Tyson Foods itself, this US share is one of the biggest producers of chicken, pork, and beef on the planet. It could turn out that the business cannibalises its core operations by pushing into the cultured and plant-based meat segments.
A green stock of the future?
Still, in the long term, Tyson’s plan to become a market leader in the lab-grown meat segment could pay off handsomely. Analysts at AT Kearney predicted two years ago that 60% of all meat won’t come from animals by 2040. Instead it will come from the lab bench or be replaced by plant-based alternatives.
I believe the growing popularity of non-meat diets in the wake of Covid-19 could see demand for lab-produced meat grow at an even faster rate, too. Mintel data shows that that 25% of Brits aged between 21 and 30 years now find a vegan diet more appealing than they did prior to Covid-19. Tyson Foods is trying to stay ahead of the curve by dipping its toe in the artificial meat industry. I think it’s a plan that could deliver big shareholder returns in the years ahead.