A new decade is now underway, and investors should be on the lookout for major trends that could lead to breakouts in the investing world. In this article, I will explore two significant global trends that investors can get in on with two exciting TSX-listed stocks.
One is currently struggling, while the other is thriving, but in the long term there is good reason to be optimistic that both can drive big growth in your portfolio in the 2020s.
Consumers turn to plant-based proteins
According to a 2018 report from GlobalData, the number of United States consumers who identify as vegan grew from 1% to 6% between 2014 and 2017. This is a trend that has reared its head across the developed world, and its also being pushed in countries like China. The sale of plant-based alternatives soared in the back half of the previous decade.
National Research Council Canada recently released a report that projected that total protein demand will double to 943.5 million metric tonnes in 2054. At the same time, the market for alternative proteins, which includes plant-based alternatives, is forecasted to post an annual growth rate of 14% by 2024.
A report from the firm Meticulous Research projects that the global plant-based protein market will reach $14.32 billion by 2025, which would represent a CAGR of 8.1% from the period stretching from 2019 to 2025.
This trend has already made its presence felt in the investing world. Beyond Meat, the California-based producer of plant-based meat substitutes, saw its stock soar over 800% from its IPO in May 2019.
Maple Leaf Foods (TSX: MFI) made the intelligent decision to enter this space in the latter half of the previous decade. In early 2017, Maple Leaf acquired Lightlife Foods, a leading manufacturer of plant-based protein foods. Last year, Maple Leaf launched the Lightlife Burger, branded as a direct competitor to the Beyond Meat Burger in domestic markets.
Shares of Maple Leaf have dropped 17% over the past three months as of close on January 22. It fell into technically oversold territory immediately following its third-quarter earnings release.
In the third quarter, Maple Leaf’s Plant Protein Group reported sales growth of 30.1%. I love Maple Leaf’s pivot to this growing segment. It has wrestled with challenging market conditions in other meat markets this year, but investors now have the chance to scoop it up at a low price.
Nutrition and supplements market soaring across the globe
Demographic shifts and rising consumer health awareness is leading to higher sales for the nutrition and supplements market. A 2019 report from Grand View Research projected that the global dietary supplements market would reach US$194.63 billion by 2025. This would represent a CAGR of 7.8% during the forecast period.
When Jamieson Wellness (TSX: JWEL) launched its IPO back in the summer of 2017, CEO Mark Hornick said that the company was well positioned for growth due to demographic shifts. Indeed, baby boomers have grown into an enthusiastic consumer base for supplements. Jamieson is also taking advantage of rising demand in international markets.
Shares of Jamieson have climbed 24% year over year as of close on January 22. In the third quarter, the company reported consolidated revenue growth of 11.2% and adjusted EBITDA growth of 8.6%. Its push into China paid off — Jamieson posted a 23.9% increase in international sales in Q3 2019. Investors can expect to see its fourth-quarter and full-year results for 2019 in late February.
