Farmers of corn, soybeans, and other related crops might be having a hard time as terrible weather has all but ruined this year’s planting season. With the prospect of a poor quality, low quantity harvest coming up on the horizon, prices for various agricultural commodities have skyrocketed.
However, the demand for one particular commodity, yellow peas, have jumped due to entirely different reasons, mainly thanks to the surging popularity of plant-based meat alternatives.
Beyond Meat (NASDAQ: BYND), which went public earlier in May and saw its shares skyrocket is one of the many companies in this space that are pushing demand for peas.
Alongside other food giants such as U.S. Tyson (NYSE: TSN) and Switzerland-based Nestle, food companies are turning to protein from yellow peas as the main ingredient for plant-based meat alternatives.
For these companies, the main problem lies in securing a consistent supply of pea protein, as the rush to introduce new products has led to a scramble for suppliers of the commodity. Yellow peas, which come from the same family alongside chickpeas, lentils, and soybeans, have become the main protein source for food companies as many consumers are moving away from soybeans.
While soy is the most abundant and cheapest source of plant-based protein on the market, it also can be an allergen. In addition to being abundant in plant estrogen, the fact soy is often genetically modified in the U.S. has led consumers to move away from it as a source of protein.
“There’s been a consumer desire for having proteins that are ‘clean label’, meaning non-GMO and in some cases organic,” said Tyler Lorenzen earlier last week, chief executive of Puris, the largest US producer of peas. “We’ve seen exponential growth.” Pea-consumption has grown significantly, almost doubling to 275,000 tonnes annual in comparison to 2015, with many expects expecting demand to increase by a further 30 percent this year.
In response to rising prices and a lack of supply, major pea producers around the world are ramping up production. A report from Statistics Canada estimated that acreage in Canada’s canola belt will instead be diverted to pea cultivation.
Already the world’s top producer of peas, Canada will see around 4.3 million acres dedicated to this crop, up from the 3.6 million acres seeded in the previous year, with yellow peas accounting for over 80 percent of the total area.
As for these alternative-food producers, many are warning that a lack of peas could be one of their biggest problems going forward. Ethan Brown, CEO of Beyond Meat, told analysts in the company’s first earnings call back in June that finding new sources is among his top priorities.
What this means for investors is that pea-producing companies and start-ups are in the best position they’ve ever been in. As demand continues to surge, sales for these producers are expected to make exponential leaps in the year to come.
Beyond Meat Company Profile
Beyond Meat Inc is a food company based in the United States. It offers a portfolio of revolutionary plant-based meats. The company has developed three core plant-based product platforms including beef, pork and poultry. Its flagship product is The Beyond Burger, is designed to look, cook and taste like traditional ground beef.
It generates revenues primarily from sales of its products, including The Beyond Burger, Beyond Sausage, Beyond Chicken and other plant-based meat products. Its customers include mainstream grocery, mass merchandiser and natural retailers, as well as restaurants and other foodservice outlets mainly in the United States. – Warrior Trading News
