How we consume and think about meat is changing. A few years ago, committed carnivores would have found it incomprehensible that there could ever be an animal-friendly alternative to a Big Mac. Yet only this year McDonalds [MCD] launched the McPlant to serve a growing hunger for meat-free alternatives.
Agronomics [ANIC.L] is an investment firm aiming to capitalise on this shift. The company specialises in cellular agriculture, which includes lab-grown cultivated meat, providing seed capital for startups in the agtech sector.
AIM-listed Agronomics share price isn’t exactly expensive, which could make it a good option for investors looking to invest in this growing field.
Why should investors care about Agronomics?
Cultivated meat is grown from cells in laboratory settings and removes the need to raise and slaughter animals. This is a potentially lucrative market: analysts from McKinsey estimate that the synthetic meat sector could be worth as much as $25bn by 2030.
Estimated value of cultivated meat market by 2030
Agronomics is expanding aggressively, which could mean that despite rising competition from the likes of Beyond Meat [BYND], it’s resilient enough to succeed. Agronomics recently upped its stake in Chinese cultivated meat company CellX by $2m, having made its first investment back in 2020 for a modest $50,000. The firm has also acquired a substantial stake in Gelter, which specialises in developing bioactive ingredients to replace animal-derived proteins in the cosmetic, food and drinks industries.
Agronomics is even backing the meat-free pet food market by teaming up with Roslin Technologies to produce pet food derived from cultivated meat.
How is Agronomics share price performing?
Shares in Agronomics are down 16.62% this year, having closed Friday 13 May at 18.76p. However, the stock has gained momentum since 7 March when it hit an intraday low of 13p. Agronomics share price hit a 52-week high of 34.4p in November last year.
Financially, Agronomics seems to be heading in the right direction. For the six months ending 31 December, profits before tax came in at £2.52m, up from a £1.45m loss in the same period the previous year. Basic profits per share were 0.33p, up from a 0.62p loss per share. Revenue substantially improved at £3.5m, up from £479,010 the year before.
The agtech sector continues to expand
Today the agtech sector is getting serious attention from financial institutions. BlackRock has recently launched the iShares Emergent Food and AgTech Multisector ETF [IVEG], which tracks companies involved in agricultural technology and innovative solutions for sustainable food supply.
Driving this is public taste, which has steadily shifted away from animals to synthetic products. According to a Ipsos Mori survey, the number of vegans in the UK quadrupled from 150,000 in 2014 to 600,000 in 2019. A separate Ipsos Mori survey revealed that 46% of people between 16 and 75 in Britain were considering reducing their intake of animal products in 2022. Agronomics is itself bullish on the investment coming into the agtech sector.
“[In 2021] $1bn was raised by cultivated meat companies alone, and $1.4bn by fermentation companies, seeing the largest amount of capital raised in any single year,” Agronomics said in its interim statement.
For investors, Agronomics’ current share price could be worth tucking into if the growth in agtech turns into a megatrend as the world becomes less dependent on animal products.