Veganism is a way of living which seeks to exclude all forms of exploitation and cruelty to animals for food, clothing or any other purpose s. According to University of Oxford Martin School, a global switch to plant-based diets could save up to 8m lives by 2050, lead to healthcare-related savings, reduce greenhouse gas emission by 2/3, and avoided climate damage of estimated USD1.5tn. In the local space, we applaud Nestle’s (SELL, TP: RM98.17) venture into the vegan future with its plant-based solution factory in Shah Alam. Berjaya Food (BUY, TP: RM2.48) now serving vegan customers with “Sala”, a vegan Tex-Mex inspired restaurant. InNature the retailer of beauty care items made from natural ingredients is one of the companies in Malaysia that received an ESG accreditation from B Corporations, an independent ESG auditing firm.

What is vegan? Food is a necessity part of our daily lives but at the same time, it is a major contributor to environmental issues. Veganism is a way of living which seeks to exclude, as far as possible and practicable, all forms of exploitation of and cruelty to animals for food, clothing or any other purpose.

Environmental and health impact of food. Animal agriculture contributes to 65% of global nitrous oxide emissions, 35-40% of methane emissions, and 9% of carbon dioxide emissions. These chemicals are considered the three principal greenhouse gasses involved in climate change. According to University of Oxford Martin School, a global switch to plant-based diets could save up to 8m lives by 2050, lead to healthcare-related savings, reduce greenhouse gas emission by 2/3, and avoided climate damage of estimated USD1.5tn. Most popular reason for choosing to be vegan is also often tied to the health benefit. According to the WHO and the World Cancer Research Fund, health conditions such as cardiovascular disease, obesity, hypertension, cancer, and type 2 diabetes are more likely to be observed in meat eaters.

Future of vegan. Experts have pointed out to technology and the increase of lab grown, plant-based alternative meats such as the “bleeding” vegan burger to be the future of eating habits. ATKeanery researches into the ways meat alternatives will disrupt the food industries and project that by 2040, only 40% of the global population will consume meat and forecast the plant-based meat industry may reach 35% of the USD1.8tn meat markets.

Vegan in investment lens. Vegan Climate Index, is the world’s first vegan-friendly and climate-conscious ETF that was launched on the NYSE in Sept 2019. Beyond Meat is the world’s first plant-based meat company to go public in May 2019. Its headline-grabbing IPO with its shares soared 163% on its first day of trading, is just one instance of how vegan alternatives are poised to grab market share and reshape the food industry. Oatly, listed in Nasdaq in May 2021 undoubtedly enjoying the lead position in non-dairy milk alternatives market, with the popular Oat milk offering while capitalizing on the consumer trend away from dairy.

Where are our local players in this space? As the biggest F&B manufacture in Malaysia, we applaud Nestle’s (SELL, TP: RM107.25) venture into the vegan future with its plant-based solution factory under the brand name Harvest Gourmet. Berjaya Food (BUY, TP: RM2.69) now serving vegan customers with “Sala”, a vegan Texas Mexican inspired restaurant. We reckon that these will boost Bfood’s diverse offerings with the growing health consciousness among the urbanites. InNature, a main market listed company since 2020, is a leading regional retailer of cosmetics and personal care products carrying The Body Shop (TBS) and Natura brands. We gather that InNature is one of the few companies in Malaysia that received an ESG accreditation from B Corporations, a global independent ESG auditing firm.

Source: Hong Leong Investment Bank Research - 6 Oct 2021