The Kingdom of Saudi Arabia may not be the first place that comes to mind when you think about vegan diets, but the son of one of the country's most influential investors is betting big that plant-based meats will become the norm globally in just a few years.
Prince Khaled bin Alwaleed, an avowed vegan and the founder and chief executive of KBW Ventures, told CNBC Tuesday that the companies he invests in have to be capable of generating revenue — but they need to have a positive impact on the world as well.
"We're really focused on companies that solve problems that the world is going through right now — one of biggest problems we're facing right now is global warming," bin Alwaleed told CNBC's Hadley Gamble at the annual Milken Conference in Abu Dhabi. "The third-most impactful industry is the animal agriculture industry. And we have to find a better way to source protein for people."
Prince Khaled's father is Prince Alwaleed bin Talal, the Saudi billionaire investor and chairman of Kingdom Holding, who has often been described as Saudi Arabia's Warren Buffett. The 41-year-old Prince Khaled's work — investing in companies like Beyond Meat, biotech start-up TurtleTree Labs and animal-free Bond Pet Foods — comes at a time of rising popularity for vegan and plant-based diets around the world. Alternative meat companies like Los Angeles-based Beyond Meat are grabbing headlines and generating shareholder returns.
"The taste plays a number one role for me — if it doesn't taste good, nobody's going to buy it," bin Alwaleed said, when asked what makes a company worthy of investment. "But more importantly if it tastes the same or better, if it costs the same or even less, if it has no or very little impact on the environment compared to traditional agriculture, then people are going to flock to it."
"And this is what we're seeing — slowly but surely, what's going to happen with Beyond Meat etc., what's going to happen with (Californian cell-based meat company) Memphis Meats and others, their price point is going to go dramatically down — and I'm betting that Beyond Meat will be cheaper than traditional meat by 2025."
Beyond Meat, which specializes in plant-based meat burgers, has partnered with Subway, KFC, Del Taco, Dunkin' Brands and more. With a current market cap of $7.5 billion, its stock price is up 60% year to date, and as of Tuesday has rocketed 376% since it first listed on the Nasdaq in May 2019.
Bin Alwaleed admitted that there are still a few years ahead before plant-based products reach the price point of traditional meat, but was confident that innovation and scale would bring costs down over time. "These companies are definitely working on solving these problems, but the issue is they're going to take a little while to actually make that happen," he said.
Retail sales of plant-based foods in the U.S. have grown by 11% in the last year, making it $4.5 billion industry, according to the Plant-Based Food Association (PBFA).
Veganism in the U.S., while still adhered to by a relatively tiny minority of the population, is on the rise — in 2014, only 1% of American consumers claimed to be vegan, increasing to 6% in 2017. While it may sound small, it's still a 600% increase in just three years.
The trend has also grown among celebrities and athletes including Miley Cyrus, Natalie Portman, Beyonce, Ellen DeGeneres, Venus Williams and Alex Honnold.