The global population is expected to reach 9.7 billion by 2050, and with it, the demand for food and beverage products will grow. This creates opportunities for ingredient makers to provide the value-added inputs needed to meet demand. For example, ingredients are used to improve the taste, texture, and shelf life of food products. They are also used to make bread rise, to curdle milk, and to break down starches in fruits and vegetables. Ingredients can enhance product quality, reduce environmental impacts, improve safety, and lead to significant cost savings.
Source: FAO. 2018. The future of food and agriculture – Alternative pathways to 2050. Rome.
Our investment process emphasizes high-quality companies with track records of profitability and continued growth potential. Ingredient companies have tended to have strong financial performance, with high profit margins and stable revenue streams—providing an attractive hunting ground for our approach.
Headquartered in Ireland, Kerry Group develops ingredients that food companies need to be competitive and mitigate risk. Kerry stands out as a global leader in the ingredients space because of its unparalleled breadth of technologies and its holistic approach to innovation. Kerry has led the industry transformation into a total solutions supplier. The company now provides ingredients for the entire product spectrum and its collaborative partner model cultivates a customer ecosystem that gives Kerry a head start on the competition and locks in long-term demand. Also, the company has a large group of scientists targeting changing consumer behavior. As a result, Kerry is at the forefront of secular growth trends, including sustainable and plant-based foods, local food production, food waste reduction initiatives, and healthy living.
Source: Kerry Group, www.kerry.com, “CAGNY 2023 Conference, Inspiring Food, Nourishing Life.” Nutritional reach by consumer. * Reduction versus 2017 baseline (Scope 1 and 2 carbon reduction).
About the authors
Jim Madden, CFA; Tony Tursich, CFA; and Beth Williamson manage the Calamos sustainable equities suite, including Calamos Antetokounmpo Global Sustainable Equities ETF (SROI) and Calamos Antetokounmpo Sustainable Equities Fund (SROIX), as well as separately managed portfolios. Our team has been at the forefront of sustainable investing since 1997 and launched one of the first fossil-fuel-free funds in the United States. Prior to Calamos Investments, Jim, Tony, and Beth were portfolio managers for the Trillium ESG Global Equity Fund Retail (PORTX).
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