By Thierry Malleret, economist
In the wellness space, there is a big trend: large multinational food companies are scrambling to respond to fast-changing consumer demand for healthier foods. One way to get a foothold in this rapidly growing segment is to acquire much smaller companies with a strong brand or stellar reputation in the health and wellness sector. Unilever’s recent acquisition of Pukka – the sixth largest organic tea producer - is an example of this. So is Nestlé’s acquisition of Sweet Earth, a Californian producer of frozen and chilled vegetarian and vegan products. Coca Cola and Danone also recently invested in plant-based food (i.e. vegetarian and vegan food).
The point above doesn’t mean that fast and junk foods are on their way out. In middle-income countries in particular, they are doing remarkably well, growing at double-digit rates, and more! (In some countries like Argentina and Ghana, fast food consumption has increased by several hundred per cent over the past five years.)
By contrast, vegetarianism and veganism are a Western phenomenon gaining a lot of traction amongst millennials. If the example of the UK is any guide, the number of vegans is growing exponentially. In the UK, it reached 542,000 in 2016 from a base of 150,000 ten years before. Half of them are under 34. On a global basis, the absolute numbers of vegans are much less impressive than those favouring fast food, but the relative, recent increase is staggering, offering great investment opportunities.