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The outlook for the meat industry

 

The outlook for the meat industry

In this week’s video insight Andreas takes a closer look into the meat industry. Research shows that by 2040 vegan meat replacement and cultured meat will take significant share and account for around 60 per cent of total meat consumption. Which companies will be impacted by this?

Please click here to read the full article by ATKearney. 

INVEST WITH MONTGOMERY

Andreas is the joint Portfolio Manager of The Montgomery Fund. Andreas joined from Navigo Partners, a M&A advisory firm in Stockholm, Sweden where he was a Director responsible for origination and execution of Scandinavian projects. Before this, he worked for three years in corporate strategy at Alinta Energy in Sydney.

This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.

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4 Comments

  1. From Greg’s post

    “I think the projections for 2040 cited in this article don’t just need a healthy (?) pinch of salt, they are as unrealistic as the projections for many of the unicorn-type companies that are critically written about on this blog and I think that investment decisions based on these projections are a recipe for severe financial pain”.

    There will certainly be plenty of unicorns out there making fake meat that but that does turn the tide that animal meat is as we know (from animals) it is going into decline (maybe it will take 30 rather than 20 years, who knows but it will still keep marching on) . The implications here are for farming and farming related stocks such as fertilisers and farming tech (what not to invest in rather than what to invest in). I think Andreas is on the right track here and his argument is cogent, measured, well reasoned and he is willing to look at the wider context – no unicorn riding as far as I can see.

  2. Hmm. I’m not so sure about this. As you say, the vegan meat producers are making stuff akin to patties – ie. mince-like material. I don’t know about everyone else but mince-like product makes up maybe 1/6th of our meat consumption in our household, could be less. And we’re solid middle-ish class non-silver-spoon types. The vast majority of the meat we eat is identifiably chicken, beef, lamb or fish, not mince. Mince is made out of the bits of the animal that is of lower value. Now, leaving aside what I eat at home, when I go out to a restaurant, I’m eating eye fillet or porterhouse, or chicken breast or roast lamb, I’m not eating mince. But to get those 20 200gm eye fillets off the cow, there are way, way more kgs of mincemeat also produced. So to get your identifiable cuts – even the ones you turn into stir-fry – you have to cop the junk mince meat whether you like it or not and I don’t imagine it is going to get thrown out. I also don’t think that people are going to want to eat fewer eye fillets or other identifiable cuts just because there is synthetic mystery vegan mince meat equivalent product available.

    So, if people were to stop eating eye fillet, porterhouse, chicken breast and roast lamb and only had the choices of eating mincemeat or the synthetic vegan mincemeat equivalent for ever, then there might be an argument for dwindling animal meat production. But I don’t think that is going to happen. Even bogan Macca’s customers are going to prefer two all beef patties in their Big Macs rather than weird vegan mystery protein patties and if by 2040 someone can prove me wrong then I’ll eat my hat. Sure, there are two sides to any argument but personally, I think the projections for 2040 cited in this article don’t just need a healthy (?) pinch of salt, they are as unrealistic as the projections for many of the unicorn-type companies that are critically written about on this blog and I think that investment decisions based on these projections are a recipe for severe financial pain.

    • Hi Greg and thanks for your thoughts!
      You are right that mince is more of a byproduct that will be produced anyway. This is where the plant based products are initially competing but there is rapid product development going on and the products will get more and more like normal meat over time. The person that they are targeted to is the middle-aged person who is told by his doctor that he needs to eat a bit healthier and that it might be a good idea to switch one or two meals a week to something else.

      Also, the majority of the growth in alternative products by 2040 would come from cultured meat which is basically indistinguishable from traditional meat. The difference will be that with cultured meat, you can grow exactly the type of meat you want with little or no byproducts or waste.

      The article was more aimed at bringing up the risk of investing in traditional meat growing value chain that to propose that investing in the alternatives would be a good idea.

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