The global food sector is in the midst of structural change with a number of significant investment themes building. Consumers around the world are becoming more aware of the animal welfare and environmental sustainability challenges within the global food system, and they are increasingly demanding food that is healthy, sustainable, and cruelty-free.

As a result, demand for alternative meat and plant-based products is accelerating and is expected to grow strongly over the longer term.

As shown in the chart below, global plant-based food sales are expected to grow at 19% p.a. between 2020 and 2030 driven by health, animal welfare, and environmental sustainability.

Plant-based food sales are expected to represent 7.7% of the global protein market in 2030. Dairy and meat substitution will continue to dominate the plant-based food sector as the transition away from traditional products accelerates.

A similar theme is developing in the cultured/cultivated meat sector for similar reasons. As shown in the chart below, global demand for cultured/cultivated meat is expected to grow at 16% p.a. between 2021 and 2028 driven by rising demand for alternative protein sources, cellular technology advancements, and a growing focus on animal welfare and environmental sustainability.

These emerging trends will significantly impact long-term stock performance within the food sector. Prudent investors are positioning their investment portfolios to benefit.

5 stocks positioned to benefit

Here are the top five stocks for investors looking to benefit from the changing face of the food sector:

MeaTech

MeaTech (NASDAQ: MITC) is a global food technology company developing advanced biotechnology and engineering capabilities to produce slaughter-free meat which is delicious, nutritious, and safer than farm-raised meat.

The company’s goal is to develop a replacement for conventional steak by maximizing cell-based content rather than using non-meat ingredients. By developing cultivated meat that better mirrors the characteristics of premium farm-raised steak, MeaTech is positioning itself as a provider for alternative meat products which resemble conventional meat in their taste and nutritional values.

The company recently announced the opening of its US office in California, which will help MeaTech accelerate its go-to-market strategy, enhance its investor relations activities, and will further improve the company’s access to R&D and technical talent.

Archer Daniels Midland

Archer Daniels Midland (NYSE: ADM) is a global leader in transforming agricultural products into food ingredients, fuels, and industrial products. The company is involved in all parts of the global food supply chain, and its mission is to enable nature’s power to improve people’s quality of life. Archer Daniels Midland is a long-term sector leader with solid fundamentals, a strong balance sheet, and a history of paying reliable dividends.