November 3, 2020

By Lynda Kiernan, Global AgInvesting Media

Natural Order Acquisition, a Massachusetts-based special purpose acquisition company (SPAC) focused on sustainable plant-based foods and beverages, is looking to out-do Beyond Meat’s $240 million IPO of last year. 

Paperwork was filed with the SEC to launch the SPAC with the goal of raising $287.5 million through an IPO for the purpose of acquiring another plant-based food or alternative protein company, which it will then bring public. 

Leading Natural Order is Italian entrepreneur and company chairman Sebastiano Castiglioni, who is also a partner with Blue Horizon Group, one of the initial investors in Beyond Meat, and founder and director of plant-based investment fund Dismatrix. The C-Suite also includes CEO and director Paresh Patel, who launched India and Massachusetts-based Sandstone Investments in 2014, and CFO Marc Volpe, the former CFO of Quantopian, a fintech asset manager.

Planning to list on the Nasdaq under the symbol NOACU, Natural Order Acquisition is targeting disruptors of the animal protein-based and food industries working to provide alternatives to traditional fresh and packaged animal-based meats, dairy, or seafood products. When looking at what has already played out in the category, it’s a solid plan.

Beyond Meat launched last year on the Nasdaq under the symbol BYND at $25 per share, and driven by investor interest and overarching market demand, the company saw its share price jump from $25 to $65 in one day, and by 250 percent in two weeks. Today, as of November 3, 2020, the company’s share price stands at $146.35, with an enterprise valuation of $8.74 billion. 

And given the state of the market and forecasts for consumer trends, it appears there will continue to be potential for growth and returns in the space.

Alternative protein sources have been increasingly on the radar of both consumers and investors. Global protein consumption is expected to climb at a CAGR of 1.7 percent, reaching 943 million tons by 2054, according to Lux Research. Over this same time period, alternative protein sources are forecast to command up to one-third of the protein market as they fill the void created by slowing growth in meat and seafood production. It is perhaps this – more than specific companies – that investors are betting on. 

If the recent history of the non-dairy milk industry offers any lessons it is this – the entire category was considered a niche until the arrival and market penetration of almond milk, which drove the category to quickly account for nearly 15 percent of total dairy sales. 

If similar metrics are applied to the alternative meat industry, analysts are forecasting that it has the potential to account for 15 percent of the $270 billion market over the coming 10 years to reach a value of $41 billion. 

There is also vast nascent potential for plant-based cheese. The dairy-free category has been at the tip of the spear for the plant-based dietary shift, however, vegan cheese has proven particularly difficult to formulate – thanks to the challenge of replicating casein – the protein that gives cheese all those characteristics that humans love. But for those that break through the casein issue, it would give them a decided advantage in the vegan cheese market that is estimated to be valued at $2.5 billion by the end of this year. 

Perhaps more than long-term macro trends, however, it’s the timing that may drive a plant-based SPAC to success right now. Adam Bergman, managing director, Eco Capital explores this in his recent article COVID-19 Is a Silver Lining For Plant-Based Protein, published by GAI News in May of this year, saying, “For most new technologies, including those in the food & ag sectors, one of the hardest things to do is move from early adoption to mass market consumption. However, COVID-19 is providing an unexpected boost to the plant-based protein sector.”

“Of course, the lack of animal protein and higher prices might end up only being a short-term issue, but the impact on protein consumption patterns could be significant and longer lasting as consumers, faced with limited animal protein options, begin purchasing plant-based protein varieties, even if reluctantly at first. For alternative-protein industry leaders Beyond Meat and Impossible Foods, and lesser known brands trying to attract new consumers, this could be their opportunity to go more mainstream and land in the carts of the majority of U.S. consumers that have yet to try plant-based proteins.”

– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, and HighQuest Group’s Oilseed & Grain News. She is also a contributor to the GAI Gazette. She can be reached at lkiernan@globalaginvesting.com.