The Rise of Functional Food: What Investors Need to Know
Following the COVID-19 pandemic, consumers are looking for new ways to use food as medicine in a bid to help protect them against disease. As a result, the functional food market is booming.
But is it just the buzzword du jour, or a growth market that investors should seriously consider?
The infographic above from Billy Goat Brands (CSE: GOAT) (“GOAT”) breaks down the key points that investors need to know about how the market is structured.
Functional Food: The Basics
To start, let’s explain what functional food means.
Functional food is an umbrella term that describes food that has a positive impact on your health, beyond its basic nutritional value.
Take oatmeal for example. It contains soluble fiber that can help lower cholesterol levels and reduce inflammation. Therefore it is considered to be a food that is functional. Benefits of these foods may include things like:
- Protecting against disease
- Preventing nutrient deficiencies
- Promoting growth and development
Some foods also have nutrients added to them to enhance their nutritional profile, such as milk with added Vitamin D, and therefore provide the same benefits to consumers.
While there is much debate around the official definition of the term functional food, the most important thing to remember is that they are foods that have added benefits—either natural superfoods, or enhanced during the production process.
Let’s dive into the market on a more granular level.
The Anatomy of the Functional Food Market
Given the shift in consumer values, the market for these kinds of foods is expected to see significant growth over the next decade, and is projected to reach $260 billion by 2027—a compound annual growth rate (CAGR) of 8.5%.
Even though the industry is at an early stage of development, several sub-sectors are emerging in the form of different functional food types.
|Fortified||Food or beverages that have added vitamins, minerals, or amino acids.||Fruit juices fortified with Vitamin C, yogurt fortified with Vitamin D, coffee fortified with mushrooms.|
|Enriched||Food or beverages with added nutrients that may have been lost during processing.||Wheat flour enriched with folic acid or iron, pasta enriched with with Vitamin B.|
|Altered||Food or beverages from which a component has been removed, reduced or replaced with another substance with more beneficial effects.||Low fat milk, plant-based meat alternatives.|
|Non-altered||Food or beverages naturally containing increased numbers of nutrients or components.||Whole foods like nuts, seeds, garlic, and tomatoes.|
|Enhanced||Food or beverages which one of the components has been naturally enhanced through special growing conditions, new feed composition, genetic manipulation, or otherwise.||Eggs with increased omega-3 content achieved by altering chicken feed, GMO crops such as pest-resistant corn.|
Altered foods such as plant-based meat alternatives are taking the world by storm and are expected to reach almost $11 billion in 2022 alone.
Invest in the World’s Fastest Growing Functional Food Companies
Billy Goat Brands (CSE: GOAT) offers people a simple way to invest their money into a portfolio of health-conscious, sustainability-focused and ESG-driven companies, such as FunGuys Beverages.
FunGuys Beverages is a Canadian manufacturer and distributor of organic chaga and lion’s mane-infused cold brew coffee products under its consumer-facing brand: KOLD.
The company aims to capture a portion of the functional mushroom market in the U.S. and will be entering the North American market with a sophisticated eCommerce platform.
Learn more about GOAT by clicking this link.
Ranked: Emissions per Capita of the Top 30 U.S. Investor-Owned Utilities
Roughly 25% of all GHG emissions come from electricity production. See how the top 30 IOUs rank by emissions per capita.
Emissions per Capita of the Top 30 U.S. Investor-Owned Utilities
Approximately 25% of all U.S. greenhouse gas emissions (GHG) come from electricity generation.
Subsequently, this means investor-owned utilities (IOUs) will have a crucial role to play around carbon reduction initiatives. This is particularly true for the top 30 IOUs, where almost 75% of utility customers get their electricity from.
This infographic from the National Public Utilities Council ranks the largest IOUs by emissions per capita. By accounting for the varying customer bases they serve, we get a more accurate look at their green energy practices. Here’s how they line up.
Per Capita Rankings
The emissions per capita rankings for the top 30 investor-owned utilities have large disparities from one another.
Totals range from a high of 25.8 tons of CO2 per customer annually to a low of 0.5 tons.
|Utility||Emissions Per Capita (CO2 tons per year)||Total Emissions (M)|
|Berkshire Hathaway Energy||14.0||57.2|
|American Electric Power||9.2||50.9|
|Florida Power and Light||8.0||41.0|
|Portland General Electric||7.6||6.9|
|Pacific Gas and Electric||0.5||2.6|
|Next Era Energy Resources||0||1.1|
PNM Resources data is from 2019, all other data is as of 2020
Let’s start by looking at the higher scoring IOUs.
TransAlta emits 25.8 tons of CO2 emissions per customer, the largest of any utility on a per capita basis. Altogether, the company’s 630,000 customers emit 16.3 million metric tons. On a recent earnings call, its management discussed clear intent to phase out coal and grow their renewables mix by doubling their renewables fleet. And so far it appears they’ve been making good on their promise, having shut down the Canadian Highvale coal mine recently.
Vistra had the highest total emissions at 97 million tons of CO2 per year and is almost exclusively a coal and gas generator. However, the company announced plans for 60% reductions in CO2 emissions by 2030 and is striving to be carbon neutral by 2050. As the highest total emitter, this transition would make a noticeable impact on total utility emissions if successful.
Currently, based on their 4.3 million customers, Vistra sees per capita emissions of 22.4 tons a year. The utility is a key electricity provider for Texas, ad here’s how their electricity mix compares to that of the state as a whole:
|Energy Source||Vistra||State of Texas|
Despite their ambitious green energy pledges, for now only 1% of Vistra’s electricity comes from renewables compared to 24% for Texas, where wind energy is prospering.
Based on those scores, the average customer from some of the highest emitting utility groups emit about the same as a customer from each of the bottom seven, who clearly have greener energy practices. Let’s take a closer look at emissions for some of the bottom scoring entities.
Utilities With The Greenest Energy Practices
Groups with the lowest carbon emission scores are in many ways leaders on the path towards a greener future.
Exelon emits only 3.8 tons of CO2 emissions per capita annually and is one of the top clean power generators across the Americas. In the last decade they’ve reduced their GHG emissions by 18 million metric tons, and have recently teamed up with the state of Illinois through the Clean Energy Jobs Act. Through this, Exelon will receive $700 million in subsidies as it phases out coal and gas plants to meet 2030 and 2045 targets.
Consolidated Edison serves nearly 4 million customers with a large chunk coming from New York state. Altogether, they emit 1.6 tons of CO2 emissions per capita from their electricity generation.
The utility group is making notable strides towards a sustainable future by expanding its renewable projects and testing higher capacity limits. In addition, they are often praised for their financial management and carry the title of dividend aristocrat, having increased their dividend for 47 years and counting. In fact, this is the longest out of any utility company in the S&P 500.
A Sustainable Tomorrow
Altogether, utilities will have a pivotal role to play in decarbonization efforts. This is particularly true for the top 30 U.S. IOUs, who collectively serve 60 million Americans, or one-fifth of the U.S. population.
Ultimately, this means a unique moment for utilities is emerging. As the transition toward cleaner energy continues and various groups push to achieve their goals, all eyes will be on utilities to deliver.
The National Public Utilities Council is the go-to resource to learn how utilities can lead in the path towards decarbonization.
The Road to Decarbonization: How Asphalt is Affecting the Planet
The U.S. alone generates ∼12 million tons of asphalt shingles tear-off waste and installation scrap every year and more than 90% of it is dumped into landfills.
The Road to Decarbonization: How Asphalt is Affecting the Planet
Asphalt, also known as bitumen, has various applications in the modern economy, with annual demand reaching 110 million tons globally.
Until the 20th century, natural asphalt made from decomposed plants accounted for the majority of asphalt production. Today, most asphalt is refined from crude oil.
This graphic, sponsored by Northstar Clean Technologies, shows how new technologies to reuse and recycle asphalt can help protect the environment.
The Impact of Climate Change
Pollution from vehicles is expected to decline as electric vehicles replace internal combustion engines.
But pollution from asphalt could actually increase in the next decades because of rising temperatures in some parts of the Earth. When subjected to extreme temperatures, asphalt releases harmful greenhouse gases (GHG) into the atmosphere.
|Emissions from Road Construction (Source)||CO2 equivalent (%)|
|Excavators and Haulers||16%|
Asphalt paved surfaces and roofs make up approximately 45% and 20% of surfaces in U.S. cities, respectively. Furthermore, 75% of single-family detached homes in Canada and the U.S. have asphalt shingles on their roofs.
Reducing the Environmental Impact of Asphalt
Similar to roads, asphalt shingles have oil as the primary component, which is especially harmful to the environment.
Shingles do not decompose or biodegrade. The U.S. alone generates ∼12 million tons of asphalt shingles tear-off waste and installation scrap every year and more than 90% of it is dumped into landfills, the equivalent of 20 million barrels of oil.
But most of it can be reused, rather than taking up valuable landfill space.
Using technology, the primary components in shingles can be repurposed into liquid asphalt, aggregate, and fiber, for use in road construction, embankments, and new shingles.
Providing the construction industry with clean, sustainable processing solutions is also a big business opportunity. Canada alone is a $1.3 billion market for recovering and reprocessing shingles.
Northstar Clean Technologies is the only public company that repurposes 99% of asphalt shingles components that otherwise go to landfills.
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