PlantX’s (CSE: VEGA)(OTCQB: PLTXF) Value Proposition
Innovations in plant-based meat and protein sources, dairy and egg alternatives, cultivated meat and alternative protein fermentation are all on the rise, thanks to rapidly growing investment in the sector. According to the Good Food Institute, in 2021, investment in these types of companies reached $5.1 billion, up by a whopping 61% from 2020’s investment of $3.1 billion. Governments across multiple countries have also been increasing their investments in plant proteins, such as Australia kicking in AU$378 million (US$277.6 million) to transform South Australia into a plant-protein manufacturing powerhouse, Canada committing to $100 million for Canada’s plant-based industry, and the European Union pledging €10 Billion, as part of a larger green transition plan with a focus on plant-based proteins. But it’s the private sector that seems to be moving forward the most innovations, including companies such as Nepra Foods (CSE: NPRA) (OTCQB: NPRFF), Benson Hill, (NYSE: BHIL), Burcon NutraScience (BRCN) (TSX: BU), Oatly (NASDAQ: OTLY), and food giant Tyson Foods, (NYSE: TSN).
GFI Senior Investor Engagement Specialist Sharyn Murray: “The investor community is waking up to the massive social and economic potential of food technology to radically remake our food system. Early trendsetters like Impossible Foods, Beyond Meat, UPSIDE Foods, and Mosa Meat continue to perform well, and there are more and more entrepreneurs who see the potential of alternative proteins to succeed in the marketplace while having a positive global impact on food sustainability and global health.”
This major expansion is being fueled in large part by increasing consumer demand for plant-based alternatives to meat and dairy. Calls from buyers for transparency and ethical practices across the food supply chain are also becoming louder and buoying interest in plant-based options.
Interestingly, rising demand for plant-based foods isn’t a sign that a large percentage of the population is going vegan or vegetarian. Rather, it is indicative of a shift to what’s being called a “flexitarian” diet in which consumers choose animal-based food products, but also opt for more plant-based alternatives. Similar trends in plant-based foods are prevalent among Canadian consumers as well, and restaurants in North America are increasing their plant-based menu offerings to include alternatives to meat and dairy.
Let’s take a look at how to invest in plant-based foods and ways to capitalize on this growing trend as more and more North Americans reduce their meat consumption.
Some plant-based food stocks garnering a lot of investor attention include Beyond Meat (BYND), Tattooed Chef (TTCF) and Ingredion (INGR). In 2019, Los Angeles-based Beyond Meat’s initial public offering heralded the dawn of the plant-based foods era, encouraging investors to take a stake in the meatless market. The company makes plant-based meat substitutes, including burger patties composed primarily of pea protein. In the US and Canada, Beyond Meat’s products can be found in the meat sections of many grocery stores and on the menus of several restaurants.
Tattooed Chef is targeting frozen plant-based foods with pre-prepared organic products that are rich in protein. Founded by CEO Sam Galletti, who has more than three decades of experience in the food industry, the company grows and manufactures the food it sells. Tattooed Chef acquired private-label snack bar maker Belmont Confections in late 2021 for US$18 million, and is set to launch its own branded plant-based snack bars in 2022.
Another venture looking to shake up the $4.5-trillion global wellness economy is PlantX Life (VEGA.CN) and it’s another specialty market that plans to scoop up Amazon-style market share and serve as an ecommerce platform for any plant-based need. PlantX is your one-stop-shop for anything and everything plant-based, from what we eat and what we put on our skin to what we wear and how we decorate our homes. This isn’t just a company, it’s an entire healthy lifestyle ecosystem. And PlantX is ready to capture a huge segment of this booming market. With its own plant-based food products, house plants, cosmetics, décor, pet food, and even its own celebrity chef. You can shop online for just about everything you can imagine that is plant-based, shop in a smart store, order plant-based takeout or find the best places to dine vegan.
The deal flow has been extremely fast-moving. In early September, PlantX closed a $30-million deal with San Diego-based Liv Marketplace to build and operate PlantX’s first brick-and-mortar retail location in California. That confirms a huge push into the United States, with a 4,515-square-foot store that will sell a line of over 5,000 plant-based products. And a lineup of other deals:
– PlantX acquired UK-based Bloombox Club in late September, and it’s now on target to hit $4 million in gross revenue.
– That same month, PlantX cut a series of deals with specialty producers, grocers, and even LA-based celebrity chef Gregg Drusinsky.
– It launched its own glacial water brand in September.
– On October 8th, PlantX jumped into the $38.4-billion North American pet food industry by launching yet another vertical with Kirtana Inc. products.
– Plant-based home meal delivery services started delivering in April and have already hit 10,000 meals.
They don’t hold inventory or maintain expensive warehouses. Ecommerce 2.0 is all about “curation”, not waste. In Canada, PlantX has teamed up with Vancouver-based UpMeals, which has a Grade A kitchen. UpMeals prepares the chef-designed meals from PlantX, making PlantX profitable right out of the gate.PlantX (VEGA.CN) says its plant sales have a 55% profit margin, followed by online food sales at 40% and delivery at 35%.
This isn’t a tech startup that’s attracting investors on sheer growth runways without clear profit potential. This is the tech startup 2.0 generation of ESG-focused ecosystems with tons of verticals for making money.
PlantX Life Inc. (VEGA) will continue to experience growth, with revenue for April 2022 coming in 164% higher than gross revenue for the same month last year, net of wholesale revenue. The Vancouver-based company said it generated gross revenue of $1,744,248 in April, while the cost of goods sold for the month came in at $1,133,761.
Investors are optimistic about the near future of PlantX shares as the stock has broken the falling short-term trend. As shares broke the current resistance point of $0.08 in early May, to a new resistance level of $0.15 has been predicted. The 3 month Moving Average Convergence Divergence (MACD) indicates a recommendation of buy for some analysts.
PlantX Life Inc. shares have a volume of 183,788 on May 30, 2022, and a 52-week range of $0.10 to $1.21. With a market cap of 25.733 million, PlantX shows an opportunity for a steady increase in 2022.
In sum, the plant based sector has witnessed a fair share of volatility over the past 18 months, especially so YTD. However, as consumer demand increases we can expect a parallel rise in capital inflows towards the companies that are providing the underlying goods and services for this market segment. Of the players I mentioned herein, PlantX has assumed a unique platform approach that leverages e-commerce to expedite the growth of its plant-based lifestyle brand. I will be following this company and its sectoral peers moving forward to see how and in what capacity the broader sector bounces back from recent bearish sentiment across the market as a whole.
Disclaimer: This is not financial or investment advice, but rather a reflection of the authors personal opinion.