Investors Find Industrial Meat Too Risky, Tell Global Food Companies to Diversify

Demand for animal protein is increasing across the globe and is projected to increase by 70 percent by 2050. Along with demand, increasing the production of factory farmed animals creates an increase in environmental risks. These two factors have investors associated with FAIRR (Farm Animal Investment Risk and Return) and ShareAction highly concerned about the future of protein. These two groups want to "turn up the heat on meat" by outlining the risks and opportunities of reducing demand for animal proteins and developing a larger market for plant-based protein in their new briefing: The Future of Food: The Investment Case for a Protein Shake Up.

The 40 institutional investors behind FAIRR and ShareAction are concerned with the continuing reliance on factory farming because it "is emerging as a high-risk production method linked with significant environmental damage and major public health issues, such as the emergence of antibiotic resistant bacteria and outbreaks of pandemics such as avian flu."

The briefing identifies the six social and environmental risks of factory farming as: greenhouse gas emissions, resource and water use, deforestation, animal welfare, public health and supply chain disruptions (like last year's egg price increase).  

For the release of the briefing, Jeremy Coller, Founder of the FAIRR Initiative and CIO of Coller Capital, said:

"The world's overreliance on factory farmed livestock to feed the growing global demand for protein is a recipe for a financial, social and environmental crisis. Intensive livestock production already has levels of emissions and pollution that are too high, and standards of safety and welfare that are too low. It simply can't cope with the projected increase in global protein demand. Investors want to know if major food companies have a strategy to avoid this protein bubble and to profit from a plant-based protein market set to grow by 8.4% annually over the next five years."

To shake things up, the briefing notes that people can choose to cut back their meat consumption and opt for plant-based proteins and recommends action companies can take to encourage this. In the store, companies can boost the availability and variety of plant-based protein products and increase the visibility and placement of the products. For example, the company behind the Beyond Burger is trying "to reimagine the meat section as the protein section of the store" by placing their plant-based protein burger there. The briefing also suggests that these plant-based protein products be competitively priced, have marketing and education about the benefits of a less-meat diet, and continue to research and develop new products to compete with factory-farmed meats.

With the publication of this briefing, FAIRR and ShareAction have targeted several groups that include Kraft Heinz, Nestle, Unilever, Tesco, Walmart and General Mills to encourage them "to set quantifiable targets for increasing exposure to protein alternatives, publishing a strategy and key milestones to monitor progress." The briefing recommends that these steps be developed into a corporate strategy, available to shareholders, for diversifying away from industrial meat production and into the growing market of plant-based sources of protein.


Image "Beef Cattle Factory Farm" by Socially Responsible Agricultural Project on Flickr used under an Attribution-NonCommercial-NoDerivs 2.0 Generic.