Financial advisors’ clients should invest in their next dinner, according to Cornerstone Capital Group, an impact investing firm based in New York City and Denver.
A new investing frontier is opening in “sustainable protein,” which combines environmental, human health and animal welfare issues, and provides an alternative to raising animals to feed the world. “Advances in agricultural technology, changes in human diet, and rising awareness of the environmental destruction caused by factory farming are accelerating the rise of sustainable protein,” Cornerstone said.
In turn, the increasing interest in food alternatives to meat and the environmental destruction it causes is opening investment opportunities, Cornerstone said. Scientists currently are developing cultured or cloned meat, which produces real meat, without raising and killing animals. The ability to make cultured meat as an alternative protein for human consumption will lower greenhouse gas emissions, provide more plentiful and cleaner water, and reduce animal cruelty.
Investment opportunities are growing in alternative proteins, organic foods, new agricultural technologies, sustainably managed farmland, and sustainable fisheries and aquaculture. Sustainable protein investment exists across asset classes in the alternative space and can provide new opportunities for returns, said Cornerstone.
Current trends are taking people away from traditional protein sources. “U.S. per capita consumption of red meat declined 26 percent between 1971 and 2016, reflecting diet-related health concerns and less- or no-meat lifestyles driven by animal welfare and climate change concerns,” the firm said. “Per capita consumption of dairy products also has declined steadily while, at the same time, sales of dairy milk alternatives, such as almond and soy milk, have grown rapidly.”
“Among the impact opportunities in sustainable protein are investments in alternative proteins, organic foods and developers of new agricultural technologies,” according to Cornerstone. “In addition, investments can be made in sustainably managed farmland, and in sustainable fisheries and aquaculture. Public equities and alternatives, such as private equity and venture capital, offer the most robust and direct opportunities for exposure to this investment theme.”
In addition to lifestyle changes and the growth of environmental concerns, animal welfare issues have played a role in how consumers think about animal-based protein. “In a 2017 survey, more than half of U.S. consumers said they were more concerned about farm animal welfare than they had been two years previously,” Cornerstone said. “Shareholder advocacy organizations and campaigns have likely played a significant role in raising awareness of this issue and in engaging with corporations. As a result, animal welfare has become a key focus of companies involved with the issue of animal-based protein.”
The ability to produce artificial muscle tissue, meat, in vitro by mass-culturing stem cells from animals has increased investing possibilities as the techniques improve. For example, Memphis Meats’ cell-culture production process currently takes three to six weeks to produce the end product. Using samples from a range of sources, the company’s scientists isolate cells that have the capacity to renew themselves, and feed them oxygen and nutrients to produce skeletal muscle.