April 2023 FoodTech: Plant Based is Out, Cultivated Meat is In

1 พ.ค. 2023Over the past month, comparative market performance has shown a clear shift in investor sentiment towards the alternative protein sector. While plant-based meat has been on the rise in recent years, the latest data suggests that investors are now more bearish on the sector compared to cultivated meat.

Cultivated meat, also known as lab-grown meat, has seen a surge in investor interest in recent months. This is due to its potential to disrupt the traditional meat industry and provide a more sustainable and ethical alternative to conventional animal farming. Moreover, advancements in technology and production processes have made cultivated meat more scalable and cost-effective, making it an attractive investment opportunity.

Now lets take a look at the chart. Using SPY's +5% performance and KROP (ag/foodtech ETF) -3% performance as baselines (average of ~+1%), we see a clear divergence between the gains enjoyed by cultivated meat players and the losses from their plant-based peers. ANIC.L, a London-based investment fund into cellAg ventures worldwide, is a mainstay of the nascent space and is +5% over the past month, roughly on par with SPY. The wild horse here is STKH, Israel based and NASDAQ traded, which has seen 20% gains on the heels of a high-profile visit to their premises by the Israeli Prime Minister. Potentially hinting at public sector subsidies or support, the event provided a windfall for STKH and helped realize a bullish momentum reversal.

Conversely, leading plant-based companies have witnessed double digit losses. BYND is down 16% over the past month as a result of disappointing earnings. Similarly BABY, a TSX-listed manufacturer of plant-based baby formulas, is down even more at -18%.

This divergence between the performance of cultivated meat versus plant based equities points to a deeper trend. Whereas 2021 was considered the boom year for the plant-based industry, it has since come crashing down to earth following sky-high COVID-era valuations. Meanwhile, cultivated meat and cellular agriculture is gathering steam as it attracts investment inflows and shareholder attention. So to make a long story short, I'm ST bullish on cultivated meat, ST bearish on plant based, and overall optimistic about the direction of the food tech space as a whole.