• Market Crumbs

Could Fake Meat Really Become A Bigger Market Than Electric Vehicles?

Image via Shutterstock

The share of the population that follows a vegetarian or vegan diet is unlikely to ever make up the majority. It's estimated only about 3% of the U.S. population is vegetarian. In Europe, the percentage ranges from 2% to 10%. India, the world's second-most populous country, counts about 40% of its population as vegetarian.

Regardless, alternatives to meat, often called "fake meat," are becoming increasingly commonplace. Some of the largest fast-food chains have either introduced or are testing these alternatives. Burger King and Dunkin' have already added meat alternative items to their menus. McDonald's, the world's largest restaurant chain by revenue, has been slower to enter the market but has finally begun testing the P.L.T. (Plant, Lettuce, Tomato) sandwich.

So with such a small percentage of the population following a vegetarian diet, why are so many restaurants rushing to add meat alternatives to their menus? Like any corporation, it all comes down to profits.

According to Barclay's, the meat industry is a $1.4 trillion global market. They believe meat alternatives could rise from a current share of 1% to 10% by 2029. They went as far as saying "that there is a bigger market opportunity for plant-based (and maybe even lab-grown) protein than was projected for electric vehicles ten years ago."

Barclay's cites three main drivers for the increasing popularity of meat alternatives. Consumers are cognizant of inhumane treatment and the slaughtering of animals, which causes some to not want to consume meat. Barclay's believes a second driving factor is health and wellness. High blood cholesterol and heart diseases as a result of red meat consumption as well as concerns over the use of antibiotics and hormones on animals may influence consumers. Finally, the environmental impact of eating meat may lead to consumers' decision to switch to meat alternatives. For example, Barclay's notes cattle produce more greenhouse gas (GHG) emissions than cars.

While the health benefits and environmental impact of eating meat compared to not eating meat are well beyond the scope of this post, some of the largest corporations believe they can't ignore this segment any longer.

Earlier this year, investors went hog wild for anything that had to do with fake meat. Beyond Meat rose 163% on its first day of trading, the best IPO in nearly two decades. The stock ultimately rose more than 500% before subsequently crashing more than 65%. The success of Beyond Meat even led investors to bid shares of privately held Impossible Meat on the secondary market to a valuation as high as $5 billion, more than double its last funding round.

It remains to be seen how consumers will adapt to a rapidly expanding variety of meat alternative options. Either way, it appears the world's largest restaurant chains and corporations in the food industry are set on continuing to roll out these items.

Leftover Crumbs

  • Will the next 1,000 points be higher or lower? The Dow Jones Industrial Average crossed, and closed, above 28,000 for the first time ever Friday on "hopes of a trade deal." The Dow has now gained 4,677 points so far this year, which is good for a return of 20%. The close above 28,000 comes 47 years and 1 day after the Dow first closed above 1,000, which was on November 14, 1972.

  • This may not end well. Video-sharing app TikTok, which has become one of the most popular apps in the U.S., has surpassed 1.5 billion downloads globally. TikTok has more than 614 million downloads this year, surpassing both Instagram and Facebook. The U.S. has the third-largest number of downloads globally with 123 million, behind India and China. Despite TikTok's increasing popularity, critics worry the Chinese government may have the ability to access the app's data. U.S. Senators Charles Schumer and Tom Cotton even wrote a letter to the acting director of national intelligence to investigate if the app could pose "national security risks" to the U.S.

  • There's no inflation. Hulu is increasing the price of its Hulu + Live TV service by 20%, from $44.99 to $54.99. Hulu emailed subscribers on Friday to let them know the changes would go into effect on December 18. This is now the second price hike for the service so far this year. Hulu raised prices from $39.99 to $44.99 in January. Luckily for the Federal Reserve, which insists on keeping rates low because its members can't find inflation, streaming services are not included in their calculations.

  • This may become a weekly thing. After selling more than a half a billion dollars' worth of Uber shares, Uber co-founder and former CEO Travis Kalanick dumped another $167 million worth of Uber stock last week. His total payday since the 180-day restriction on insiders and early investors sales ended is now more than $700 million. According to the filings, he still owns more than 71 million Uber shares, meaning he has plenty more to sell should he choose to.

  • Thanks, but no thanks. After approaching the much larger Hewlett Packard about an acquisition, Xerox's offer has officially been rejected by HP's board. Xerox had offered HP, which is more than three times its size in terms of market capitalization, $22 per share, consisting of 77% cash and 23% stock. "In reaching this determination, the Board also considered the highly conditional and uncertain nature of the proposal, including the potential impact of outsized debt levels on the combined company’s stock," HP's board wrote to Xerox's CEO.