This is the third part in a series on investments for the future – sectors that will grow to become major industries and should provide strong returns along the way. The first parts looked at clean energy and artificial intelligence. We will also look at water security and ageing populations.
What the world eats – and how it is produced – is changing dramatically. From the rise of online supermarket shopping to the growth of healthy eating and veganism, the evolution of food and nutrition is a trend that has caught the eye of investors.
Investing in something as specific as food is known as “thematic” or “trend” investing. This is a way to get exposure to a niche area that is expected to expand significantly over time.
Investing in food trends is the subject of the third part of our series on trend investing. Telegraph Money studies the outlook for the sector, the most exciting areas of innovation and the best ways to invest.
Cash in on changing consumer tastes
Dietary changes in the developed and emerging worlds have become an investment opportunity. Hans Peter Portner of Pictet, the Swiss asset manager, said that when people moved into the middle classes they tended to eat more meat. This leads to greater pressure on land resources but also to new markets for food products.
“This trend can’t continue sustainably, so we try to invest in companies that are contributing to greater efficiency and less waste, from farm to fork,” Mr Portner said. The £465m Pictet Nutrition fund owns Zoetis, the world’s largest producer of medicine and vaccinations for pets and livestock. Its share price has risen by 66pc in the past year.
Jeneiv Shah, who manages the £400m Sarasin Food & Agriculture Opportunities fund, said there was huge growth in demand for healthy eating products in the developed world, while consumers in China were eating more and more dairy products.
His fund has a stake in Mowi, the world’s largest farmed salmon producer, and China Mengniu Dairy, which sells premium dairy products in China. Its largest position is in Ocado, the British food delivery group, which uses robotics and artificial intelligence to process and deliver food orders. It also sells its technology to other supermarkets.
“It has begun to sign international deals, such as with Kruger, the largest food retailer in America,” said Mr Shah. Its share price has risen by 50pc in the past year.