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BeyondMeat’s big NASDAQ listing: Is it a harbinger of the end for factory farming?

10 May 2019

Article

It can take generations to change human habits, practices and beliefs: But change can occur suddenly when tipping points are reached

WRITTEN BY: ANDREW CANTER

There is a growing cognisance amongst investors of the wider social and environmental consequences of their investment decisions.  For example, a tipping point has been reached as regards global warming: Not only is capital being allocated towards cleaner energy and transport, but capital is also being intentionally shunted away from carbon-emitting industries and products.  

People’s cars are close to their hearts, but people’s food is very close to their stomachs!  There is an increasing flow of information, research and commentary about the raw immorality and environmental impact of factory farming; the blatant inefficiencies of growing animals for consumption; and the health effects of an animal-fueled diet.  But there is a counter-revolution in the form of a well-organised, well-funded and well-connected food industry, which speaks directly to what people want to hear, and reinforces their old choices and habits (e.g. “you need protein to survive”).  Indeed, the agri-industry lobby can legitimately argue that they’ve produced much more meat, at a much lower cost, for many more people, than ever before (while deflecting mention of the adverse consequences).  

“In economics, things take longer to happen than you think they will, and then they happen faster than you thought they could.”  - Rudiger Dornbusch

The enormously successful NASDAQ introduction for plant-based meat maker BeyondMeat (+163% on its first trading day) is sure to draw in additional investment capital to the industry.  Indeed, science, technology and capital fuels investment, which ultimately allows for products, distribution and economies of scale. 

However, without a true cost-advantage to the consumer, the meat-substitute business won’t break through the barrier of human habit and agri-industry opposition.  As a corollary, we have known for decades that wind and solar power are clean alternatives to fossil fuels, and that global warming is occurring: But only recently has such energy become price-competitive with fossil fuels, and thus the financial (and political) world has reached the tipping point to begin to phase out polluting power (which will still take decades to complete). 

For consumers, plant-based meat competes head-on with real meat – which is considered the ‘premium’ product.  Consumers are likely to willfully ignore the (well known) adverse consequences of factory farming (as they have for decades) until they are able to pay less for the plant-based meat than for animal protein.  However, when the meat-substitute industry reaches the scale and efficiency for prices to come down – to be truly price-competitive – we may achieve a tipping point for consumers and governments: We may finally see the ratcheting down of factory farming.